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Exhibit 10(d)
FRANCHISE OFFERING CIRCULAR
FOR FULL-SERVICE RESTAURANT
[Logo] Pizzeria Uno Corporation
Suite L-100
32 Loockerman Square
Dover, Delaware 19901
100 Charles Park Road
West Roxbury, Massachusetts 02132-4985
(617) 323-9200
The franchise will operate a casual theme pizza restaurant.
The initial unit franchise fee is $30,000 and the initial development
fee is $10,000 for each restaurant to be developed. You must pay both of these
fees. The estimated initial investment (3 months) for a single restaurant ranges
from $923,500 to $1,929,500.
Risk factors:
1. THE FRANCHISE AGREEMENT PERMITS THE FRANCHISEE TO ARBITRATE
ONLY AT A MUTUALLY AGREED LOCATION. OUT OF STATE ARBITRATION
MAY FORCE YOU TO ACCEPT A LESS FAVORABLE SETTLEMENT FOR
DISPUTES. IT MAY ALSO COST MORE TO ARBITRATE WITH US IN OTHER
THAN YOUR HOME STATE. STATE FRANCHISE REGISTRATION AND
RELATIONSHIP LAWS MAY AFFECT THE ENFORCEABILITY OF CHOICE OF
VENUE PROVISIONS (SEE UNIFORM UFOC ADDENDUM AND STATE
AMENDMENTS TO THE FRANCHISE AGREEMENT).
2. THE FRANCHISE AGREEMENT AND DEVELOPMENT AGREEMENT STATE THAT
MASSACHUSETTS LAW GOVERNS THE AGREEMENTS, AND THIS LAW MAY NOT
PROVIDE THE SAME PROTECTIONS AND BENEFITS AS LOCAL LAW. YOU
MAY WANT TO COMPARE THESE LAWS. STATE FRANCHISE REGISTRATION
AND RELATIONSHIP LAWS OFTEN PROVIDE THAT CHOICE OF LAW
PROVISIONS ARE VOID OR SUPERSEDED TO THE EXTENT THAT CHOICE OF
A DIFFERENT STATE'S LAW WOULD DENY A FRANCHISEE OR DEVELOPER
THE PROTECTIONS IT WOULD BE ENTITLED TO UNDER LOCAL LAW. YOU
SHOULD INVESTIGATE WHETHER YOUR PURCHASE OF THE FRANCHISE
FALLS UNDER THE JURISDICTION OF A STATE FRANCHISE REGISTRATION
OR RELATIONSHIP LAW (SEE UNIFORM UFOC ADDENDUM AND STATE
AMENDMENTS TO THE FRANCHISE AGREEMENT AND THE DEVELOPMENT
AGREEMENT).
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3. THERE MAY BE OTHER RISKS CONCERNING THIS FRANCHISE.
Information comparing franchisors is available. Call the state
administrators listed in Attachment E or your public library for sources of
information.
Registration of this franchise by a state does not mean that the state
recommends it or has verified the information in this offering circular. If you
learn that anything in the offering circular is untrue, contact the Federal
Trade Commission and the applicable state authority listed in Attachment E.
Effective Date: December 22, 1995. This Offering Circular may be
registered in certain states which require the pre-sale registration of
franchise offerings. The effective date in those states in which this offering
is registered is listed on a Uniform Franchise Offering Circular Addendum
following this page.
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PIZZERIA UNO CORPORATION
INFORMATION FOR PROSPECTIVE FRANCHISEES REQUIRED
BY THE FEDERAL TRADE COMMISSION
To protect you, we've required your Franchisor to give you this information. We
haven't checked it and don't know if it's correct. It should help you make up
your mind. Study it carefully. While it includes some information about your
contract, don't rely on it alone to understand your contract. Read all of your
contract carefully. Buying a franchise is a complicated investment. Take your
time to decide. If possible, show your contract and this information to an
advisor, like a lawyer or an accountant. If you find anything you think may be
wrong or anything important that has been left out, you should let us know about
it. It may be against the law.
There may also be laws about franchising in your state. Ask your state agencies
about them.
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580
Date of Issuance: December 22, 1995
Control No.____________________
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PIZZERIA UNO CORPORATION
UNIFORM UFOC ADDENDUM
The following states have statutes which may supersede the Franchise
Agreement, the Development Agreement, and other related agreements in your
relationship with us. These statutes may affect the enforceability of provisions
in the agreements relating to termination; transfer; renewal; covenants not to
compete; choice of law; jurisdiction; venue selection; execution of waivers and
releases of claims under the statutes; injunctive relief; waiver of rights to
jury trial; punitive and liquidated damages, and other remedies; arbitration;
and discrimination between franchisees: Ark. Code Ann. Section 4-72-201 Michie
1993); Cal. Corp. code Sections 31000 - 31516 (West 1994); Cal. Bus. & Prof.
Code Sections 20000 - 20043 (West 1994); Conn. Gen. Stat. Section 42-133e
(1994); Del. Code Ann. tit. 6 Section 2552 (1993) Haw. Rev. Stat. Section 482E-1
- - 482E-12 (1993); Ill. Rev. Stat. ch. 815 para. 705/1 - 705/44 (1994); Ind. Code
Sections 1 - 51 (1994); Ind. Code Ann. Section 23-2-2.7 (West. 1994); Iowa Code
Section 523H.1 - 523H.17 (1994); Md. Code Ann., Bus. Reg. Sections 14-201 -
14-233 (1994); Mich. Comp. Laws Sections 445.1501 - 445.1545 (1994); Minn. Stat.
Sections 8OC.01 - 8OC.22 (1994); Minn. Stat. Sections 80C.01 - 80C.14 (1994);
Miss. Code Ann. Section 75-24-51 (1993) Mo. Ann. Stat. Section 407.400 (Vernon
1994); Neb. Rev. Stat. Section 87-401 (1993); N.J. Stat. Ann. Section 56:10-1
(West 1994); N.Y. Gen. Bus. Law Sections 680 - 695 (1994); N.D. Cent. Code
Section 51-19-01 (1993); Or. Rev. Stat. Sections 650.005 - 650.085; R.I. Gen.
Laws Sections 19-28.1-1 - 19-28.1-34 (1993); S.D. Codified Laws Ann. Sections
37-5A-1 - 37-5A-87 (1994); Tex. Rev. Civ. Stat. Ann. art. 16.01 (1994); Va. Code
Ann. Sections 13.1-557 - 13.1-574; Wa. Rev. Code Sections 19.100.010 -
19.100.940 (1994); Wis. Stat. Sections 553.01 - 553.78 (1994); Wis. Stat.
Sections 135.01 - 135.07 (1984). These and other states may have fair practice
laws and other civil statutes affecting contracts. There may also be state and
federal court decisions that affect the enforcement of provisions in the
Franchise Agreement, the Development Agreement, and other related agreements.
A provision in the Franchise Agreement and the Development Agreement
which terminates these agreements upon your bankruptcy may not be enforceable
under Title 11, United States Code Section 101.
This Offering Circular is registered, on file or exempt from
registration in the following states with franchise registration and disclosure
laws:
California Effective date: March 28, 1995, as amended
Hawaii Effective date: October 2, 1995, as amended
Indiana Effective date: February 15, 1995, as amended
Maryland Effective date: April 4, 1995, as amended
Michigan Effective date: March 16, 1995, as amended October 25, 1995
Minnesota Effective date: March 30, 1995, as amended
New York Effective date: April 12, 1995, as amended
North Dakota Effective date: March 29, 1995, as amended
Rhode Island Effective date: April 17, 1995, as amended
South Dakota Effective date: May 11, 1995, as amended
Texas Effective date: January 3, 1989, as amended
Virginia Effective date: May 8, 1995, as amended November 9, 1995
Washington Effective date: March 11, 1995, as amended
Wisconsin Effective date: April 7, 1995, as amended
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ADDENDUM FOR THE STATE OF HAWAII
THESE FRANCHISES WILL BE/HAVE BEEN FILED UNDER THE FRANCHISE INVESTMENT LAW OF
THE STATE OF HAWAII. FILING DOES NOT CONSTITUTE APPROVAL, RECOMMENDATION OR
ENDORSEMENT BY THE DIRECTOR OF COMMERCE AND CONSUMER AFFAIRS OR A FINDING BY THE
DIRECTOR OF COMMERCE AND CONSUMER AFFAIRS THAT THE INFORMATION PROVIDED HEREIN
IS TRUE, COMPLETE AND NOT MISLEADING.
THE FRANCHISE INVESTMENT LAW MAKES IT UNLAWFUL TO OFFER OR SELL ANY FRANCHISE IN
THIS STATE WITHOUT FIRST PROVIDING TO THE PROSPECTIVE FRANCHISEE, OR
SUBFRANCHISOR, AT LEAST SEVEN DAYS PRIOR TO THE EXECUTION BY THE PROSPECTIVE
FRANCHISEE, OF ANY BINDING FRANCHISE OR OTHER AGREEMENT, OR AT LEAST SEVEN DAYS
PRIOR TO THE PAYMENT OF ANY CONSIDERATION BY THE FRANCHISE, OR SUBFRANCHISOR,
WHICHEVER OCCURS FIRST, A COPY OF THE OFFERING CIRCULAR, TOGETHER WITH A COPY OF
ALL PROPOSED AGREEMENTS RELATING TO THE SALE OF THE FRANCHISE.
THIS OFFERING CIRCULAR CONTAINS A SUMMARY ONLY OF CERTAIN MATERIAL PROVISIONS OF
THE FRANCHISE AGREEMENT. THE CONTRACT OR AGREEMENT SHOULD BE REFERRED TO FOR A
STATEMENT OF ALL RIGHTS, CONDITIONS RESTRICTIONS AND OBLIGATIONS OF BOTH THE
FRANCHISOR AND THE FRANCHISEE.
Registered agent in the state authorized to receive service of process is
listed in Attachment A.
SUPPLEMENTAL INFORMATION PAGE FOR
PIZZERIA UNO CORPORATION
REQUIRED BY THIS STATE
1. Registration Information
A. This proposed filing is not effective or exempt from
registration in any state.
B. This proposed filing is or will shortly be on file in
California, Hawaii, Illinois, Indiana, Maryland,
Michigan, Minnesota, New York, North Dakota, Rhode
Island, South Dakota, Virginia, Washington and Wisconsin.
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C. No states have refused, by order or otherwise, to
register these franchises.
D. No states have revoked or suspended the right to offer
these franchises.
E. The registration of these franchises has not been
withdrawn in any state.
2. Source of Funds for Establishing New Franchises
Franchisor estimates that it costs approximately $25,000 to perform its
obligations in connection with establishing each franchisee. These expenses are
covered by general operating revenues which include income from royalties and
franchise fees. Production of advertising materials, menus and certain
marketing expenses are covered by the Business Coop Fee.
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ADDENDUM TO PIZZERIA UNO CORPORATION
OFFERING CIRCULAR
FOR THE STATE OF MICHIGAN
THE STATE OF MICHIGAN PROHIBITS CERTAIN UNFAIR PROVISIONS THAT ARE
SOMETIMES IN FRANCHISE DOCUMENTS. IF ANY OF THE FOLLOWING PROVISIONS ARE IN
THESE FRANCHISE DOCUMENTS, THE PROVISIONS ARE VOID AND CANNOT BE ENFORCED
AGAINST YOU:
(A) A PROHIBITION ON THE RIGHT OF A FRANCHISEE TO JOIN AN ASSOCIATION
OF FRANCHISEES.
(B) A REQUIREMENT THAT A FRANCHISEE ASSENT TO A RELEASE, ASSIGNMENT,
NOVATION, WAIVER, OR ESTOPPEL WHICH DEPRIVES A FRANCHISEE OF RIGHT AND
PROTECTIONS PROVIDED IN THIS ACT. THIS SHALL NOT PRECLUDE A FRANCHISEE, AFTER
ENTERING INTO A FRANCHISE AGREEMENT, FROM SETTLING ANY AND ALL CLAIMS.
(C) A PROVISION THAT PERMITS A FRANCHISOR TO TERMINATE A FRANCHISE
PRIOR TO THE EXPIRATION OF ITS TERM EXCEPT FOR GOOD CAUSE. GOOD CAUSE SHALL
INCLUDE THE FAILURE OF THE FRANCHISEE TO COMPLY WITH ANY LAWFUL PROVISION OF THE
FRANCHISE AGREEMENT AND TO CURE SUCH FAILURE AFTER BEING GIVEN WRITTEN NOTICE
THEREOF AND A REASONABLE OPPORTUNITY, WHICH IN NO EVENT NEED BE MORE THAN 30
DAYS, TO CURE SUCH FAILURE.
(D) A PROVISION THAT PERMITS A FRANCHISOR TO REFUSE TO RENEW A
FRANCHISE WITHOUT FAIRLY COMPENSATING THE FRANCHISEE BY REPURCHASE OR OTHER
MEANS FOR THE FAIR MARKET VALUE AT THE TIME OF EXPIRATION, OF THE FRANCHISEE'S
INVENTORY, SUPPLIES, EQUIPMENT, FIXTURES, AND FURNISHINGS. PERSONALIZED
MATERIALS WHICH HAVE NO VALUE TO THE FRANCHISOR AND INVENTORY, SUPPLIES,
EQUIPMENT, FIXTURES, AND FURNISHINGS NOT REASONABLY REQUIRED IN THE CONDUCT OF
THE FRANCHISE BUSINESS ARE NOT SUBJECT TO COMPENSATION. THIS SUBSECTION APPLIES
ONLY IF: (i) THE TERM OF THE FRANCHISE IS LESS THAN 5 YEARS; AND (ii) THE
FRANCHISEE IS PROHIBITED BY THE FRANCHISE OR OTHER AGREEMENT FROM CONTINUING TO
CONDUCT SUBSTANTIALLY THE SAME BUSINESS UNDER ANOTHER TRADEMARK, SERVICE MARK,
TRADE NAME, LOGOTYPE, ADVERTISING, OR OTHER COMMERCIAL SYMBOL IN THE SAME AREA
SUBSEQUENT TO THE EXPIRATION OF THE FRANCHISE OR THE FRANCHISEE DOES NOT RECEIVE
AT LEAST 6 MONTHS ADVANCE NOTICE OF THE FRANCHISOR'S INTENT NOT TO RENEW THE
FRANCHISE.
(E) A PROVISION THAT PERMITS THE FRANCHISOR TO REFUSE TO RENEW A
FRANCHISE ON TERMS GENERALLY AVAILABLE TO OTHER FRANCHISEES OF THE SAME CLASS OR
TYPE UNDER SIMILAR CIRCUMSTANCES. THIS SECTION DOES NOT REQUIRE A RENEWAL
PROVISION.
(F) A PROVISION REQUIRING THAT ARBITRATION OR LITIGATION BE CONDUCTED
OUTSIDE THIS STATE. THIS SHALL NOT PRECLUDE THE FRANCHISEE FROM ENTERING INTO AN
AGREEMENT, AT THE TIME OF ARBITRATION, TO CONDUCT ARBITRATION AT A LOCATION
OUTSIDE THIS STATE.
(G) A PROVISION WHICH PERMITS A FRANCHISOR TO REFUSE TO PERMIT A
TRANSFER OF OWNERSHIP OF A FRANCHISE, EXCEPT FOR GOOD CAUSE. THIS SUBDIVISION
DOES NOT PREVENT A FRANCHISOR FROM EXERCISING A RIGHT OF FIRST REFUSAL TO
PURCHASE THE FRANCHISE. GOOD CAUSE SHALL INCLUDE, BUT IS NOT LIMITED TO:
(i) THE FAILURE OF THE PROPOSED TRANSFEREE TO MEET THE FRANCHISOR'S
THEN CURRENT REASONABLE QUALIFICATIONS OR STANDARDS.
(ii) THE FACT THAT THE PROPOSED TRANSFEREE IS A COMPETITOR OF THE
FRANCHISOR OR SUBFRANCHISOR.
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(iii) THE UNWILLINGNESS OF THE PROPOSED TRANSFEREE TO AGREE IN
WRITING TO COMPLY WITH ALL LAWFUL OBLIGATIONS.
(iv) THE FAILURE OF THE FRANCHISEE OR PROPOSED TRANSFEREE TO PAY
ANY SUMS OWING TO THE FRANCHISOR OR TO CURE ANY DEFAULT IN THE FRANCHISE
AGREEMENT EXISTING AT THE TIME OF THE PROPOSED TRANSFER.
(H) A PROVISION THAT REQUIRES THE FRANCHISEE TO RESELL TO THE
FRANCHISOR ITEMS THAT ARE NOT UNIQUELY IDENTIFIED WITH THE FRANCHISOR. THIS
SUBDIVISION DOES NOT PROHIBIT A PROVISION THAT GRANTS TO A FRANCHISOR A RIGHT OF
FIRST REFUSAL TO PURCHASE THE ASSETS OF A FRANCHISE ON THE SAME TERMS AND
CONDITIONS AS A BONA FIDE THIRD PARTY WILLING AND ABLE TO PURCHASE THOSE ASSETS,
NOR DOES THIS SUBDIVISION PROHIBIT A PROVISION THAT GRANTS THE FRANCHISOR THE
RIGHT TO ACQUIRE THE ASSETS OF A FRANCHISE FOR THE MARKET OR APPRAISED VALUE OF
SUCH ASSETS IF THE FRANCHISEE HAS BREACHED THE LAWFUL PROVISIONS OF THE
FRANCHISE AGREEMENT AND HAS FAILED TO CURE THE BREACH IN THE MANNER PROVIDED IN
SUBDIVISION (C).
(I) A PROVISION WHICH PERMITS THE FRANCHISOR TO DIRECTLY OR INDIRECTLY
CONVEY, ASSIGN, OR OTHERWISE TRANSFER ITS OBLIGATIONS TO FULFILL CONTRACTUAL
OBLIGATIONS TO THE FRANCHISEE UNLESS PROVISION HAS BEEN MADE FOR PROVIDING THE
REQUIRED CONTRACTUAL SERVICES.
THE FACT THAT THERE IS A NOTICE OF THIS OFFERING ON FILE WITH THE
ATTORNEY GENERAL DOES NOT CONSTITUTE APPROVAL, RECOMMENDATION, OR ENDORSEMENT
BY THE ATTORNEY GENERAL.
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PIZZERIA UNO CORPORATION
OFFERING CIRCULAR
TABLE OF CONTENTS
Page
----
ITEM 1 THE FRANCHISOR, ITS PREDECESSORS AND AFFILIATES............ 1
ITEM 2 BUSINESS EXPERIENCE........................................ 3
ITEM 3 LITIGATION................................................. 5
ITEM 4 BANKRUPTCY................................................. 6
ITEM 5 INITIAL FRANCHISE FEE...................................... 6
ITEM 6 OTHER FEES................................................. 7
ITEM 7 INITIAL INVESTMENT......................................... 9
ITEM 8 RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES........... 11
ITEM 9 FRANCHISEE'S OBLIGATIONS................................... 14
ITEM 10 FINANCING.................................................. 15
ITEM 11 FRANCHISOR'S OBLIGATIONS................................... 16
ITEM 12 TERRITORY.................................................. 24
ITEM 13 TRADEMARKS................................................. 27
ITEM 14 PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION............ 29
ITEM 15 OBLIGATIONS TO PARTICIPATE IN THE
ACTUAL OPERATION OF THE FRANCHISE BUSINESS................. 31
ITEM 16 RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL............... 32
ITEM 17 RENEWAL, TERMINATION, TRANSFER AND DISPUTE
RESOLUTION................................................. 33
ITEM 18 PUBLIC FIGURES............................................. 34
ITEM 19 EARNINGS CLAIMS............................................ 34
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ITEM 20 FRANCHISED OUTLETS......................................... 40
ITEM 21 FINANCIAL STATEMENTS....................................... 49
ITEM 22 CONTRACTS.................................................. 50
ITEM 23 RECEIPT.................................................... 51
ATTACHMENTS
A. Agents for Service of Process
B. Table of Contents for Manuals
C. Financial Statements
D. Contracts
E. State Administrators
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ITEM 1
THE FRANCHISOR, ITS PREDECESSORS AND AFFILIATES
The Franchisor
Pizzeria Uno Corporation ("we" or "us") was incorporated in the State
of Delaware on September 29, 1989 and maintains its principal place of business
at Suite L-100, 32 Loockerman Square, Dover, Delaware 19901, and an
administrative office at 100 Charles Park Road, West Roxbury, Massachusetts
02132-4985. We conduct business under our corporate name only.
Since our incorporation, we have offered franchises for the
establishment and operation of casual theme pizza restaurants. Although we do
not own or operate these restaurants, as described below, our affiliates do so.
We have not offered franchises in any other line of business, but we do offer
franchises for "Takeries" which are smaller quick-service versions of Pizzeria
Uno restaurants. Our agents for service of process are listed in Attachment A.
Our Predecessors and Affiliates
From October 3, 1979 until our incorporation in Delaware on September
29, 1989, Pizzeria Uno Corporation operated as a Massachusetts corporation ("our
Predecessor"). For the purpose of changing its state of incorporation, our
Predecessor formed a wholly owned Delaware subsidiary on September 29, 1989,
called Pizzeria Uno Delaware Corporation ("Uno Delaware"). On that same date,
our Predecessor merged into Uno Delaware and Uno Delaware changed its name to
Pizzeria Uno Corporation. Until the merger, when it ceased to exist, our
Predecessor maintained its offices at 100 Charles Park Road, West Roxbury,
Massachusetts 02132-4985. Our Predecessor has not conducted a casual theme pizza
restaurant business.
We are a wholly owned subsidiary of URC Holding Company, Inc., a
Delaware corporation. URC Holding Company, Inc. is the sole, wholly owned
subsidiary of Uno Restaurant Corporation, a Delaware corporation.
From January 1980 through September 29, 1989, our Predecessor offered
franchises for the establishment and operation of casual theme pizza
restaurants. As of September 30, 1995, our affiliates and our Predecessor's
affiliates operate 78 casual theme pizza restaurants (see Item 20). 77 of these
restaurants operate under the mark "Uno" and one operates under the mark "Due."
In addition, some of these restaurants are smaller, limited-service versions of
Uno Restaurants, known as "Takeries." The Takeries are further described in Item
12. Our affiliates have offered licenses for the establishment of Uno bakeries
located in supermarkets (17 units) and movie theaters (16 units), and we have
offered a license for one Uno slice shop (an abridged version of an Uno
Restaurant which is designed to operate in airport terminals and within food
courts for tollways and major thoroughfares). Our affiliates also own
restaurants that operate under concepts other than the System (as defined
below), and sell refrigerated and frozen consumer foods to commercial customers.
(See Item 12.) Our Predecessor and affiliates do not offer franchises or
licenses in any other line
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of business or provide products or services to our franchisees. Our Predecessor
has not offered franchises in any other line of business and has not owned or
operated casual theme pizza restaurants.
The Franchise Offered
We will offer to individuals, partnerships and corporations ("you") a
franchise agreement (the "Franchise Agreement") which grants you the right to
establish and operate one casual theme pizza restaurant (the "Franchised
Business") at a location approved by us (the "Outlet Location"). We do not
engage in any other business activities.
As a result of the expenditure of time, skill, effort, and money, we
have developed a distinctive system (the "System") relating to the
establishment, operation, marketing and promotion of food service facilities
featuring "Chicago Style" deep dish pizza and other products. The distinguishing
characteristics of the System include distinctive exterior and interior designs,
decors, color schemes, and furnishings, secret recipes and special menu items,
uniform standards, specifications, procedures and inspections for operations;
quality and uniformity of products and services offered; procedures for
inventory, management and financial control; training and assistance; and
advertising and promotional programs; all of which we may change, improve, and
further develop. The Franchised Business must also utilize certain of our
trademarks, service marks, trade names, trade secrets, logotypes, commercial
symbols, patents, copyrights, and all related practices, procedures, methods,
devices, techniques, designs, and trade dress now or later adopted by us for use
in connection with the System, as they may be modified by us (the "Intellectual
Properties").
The Franchised Business will offer food and beverage items primarily
for on-premises consumption. The restaurant will occupy approximately 5,000 to
7,000 square feet and seat approximately 150-205 customers. It will offer
alcoholic and non-alcoholic beverages and a full line of menu items.
We will also offer to you a development agreement (the "Development
Agreement") which grants you the right to establish and operate one or more
Franchised Businesses, in accordance with a development schedule (the
"Development Schedule"). You must sign the Development Agreement regardless of
the number of Franchised Businesses you wish to establish and operate. Each
Franchised Business developed under a Development Agreement must be located
within a geographic area described in the Development Agreement (the
"Development Area") and at an Outlet Location, and must be established and
operated under a separate Franchise Agreement.
The services and products offered by you will be sold primarily,
although not exclusively, to the general public. The market for restaurant
services is highly developed. Uno brand restaurants will be in competition with
other businesses providing similar pizza products and casual theme services,
including a large number of national, regional, and local restaurants.
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Industry-Specific Regulations
The restaurant/bar industry is regulated on the Federal, state, and
local levels. The preparation and handling of food is federally regulated by the
Pure Food and Drugs Act of 1906; the Federal Food, Drug, and Cosmetic Act; and
by rules and policies of the Food and Drug Administration. State requirements
relating to food safety typically pertain to sanitation and handling. Local
inspectors may also enforce sanitation and handling rules created on the state
and/or local level. Many state and local authorities also regulate the sale of
alcoholic beverages, and all restaurants must be licensed for such sale. The
location of a restaurant/bar may also be affected by a variety of state and
local zoning, use and planning regulations.
There may be other laws, rules, or regulations which affect the
Franchised Business, including zoning, minimum wage, and labor laws. We
recommend that you consult with your attorney for an understanding of them.
ITEM 2
BUSINESS EXPERIENCE
For purposes of this Item 2 only, references to "us" and "we" refer to our
Predecessor for periods prior to September 29, 1989.
Robert M. Brown: Senior Vice President - Finance, Treasurer, and Director
Mr. Brown has served as our Senior Vice President - Finance since February 1990,
and our Treasurer since October 1988, and Director since March 1987. From March
1987 to February 1990, he served as our Vice President-Finance. Mr. Brown has
also served as Senior Vice President - Finance, Chief Financial Officer,
Treasurer, and Director of Uno Restaurant Corporation since October 1988.
John O. Cunningham: Vice President, General Counsel, and Secretary
Mr. Cunningham has served as our and our Predecessor's Vice President since June
1994. Since February 1994 he has also served as our and our Predecessor's
General Counsel and Secretary. From January 1993 to January 1994, he was a
self-employed attorney in Dallas, Texas and Boston, Massachusetts. From June
1988 to January 1993, Mr. Cunningham served as General Counsel and Secretary of
Chief Auto Parts, Inc., located in Dallas, Texas.
Alan Fox: President (Uno Foods Inc.); Senior Vice President, Purchasing (Uno
Restaurant Corporation)
Since May 1990, Mr. Fox has served as President of Uno Foods Inc. (a
wholly-owned subsidiary of URC Holding Company) and since October 1990, he has
served as Senior Vice President - Purchasing, of Uno Restaurant Corporation. Mr.
Fox served as Senior Vice President - Purchasing and Development of Uno
Restaurant Corporation from August 1989 to October 1990.
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Donald H. Friedman: Vice President - Franchise Operations
Mr. Friedman has served as our Vice President - Franchise Operations for both us
and Uno Restaurant Corporation since December 1993. From October 1992 to
December 1993 he served as our Director - Franchise Operations. From November
1991 to September 1992, he was our Franchise Field Services Representative. From
April 1988 to October 1991, Mr. Friedman served as Area Supervisor for Uno
Restaurant Corporation.
William A. Gallucci: Senior Vice President - Franchising
Mr. Gallucci has served as Senior Vice President - Franchising since October
1994. From August 1988 to September 1994 he was Senior Vice President Operations
of Uno Restaurant Corporation. Prior thereto, he served as Vice
President-Operations of Uno Restaurant Corporation, beginning October 1986.
Thomas W. Gathers: Senior Vice President - Human Resources and Training (Uno
Restaurant Corporation)
Mr. Gathers has served as Uno Restaurant Corporation's Senior Vice President -
Human Resources and Training since August 1990. From June 1981 to August 1990,
he was Manager of Training and Development for General Mills Restaurant Group,
Inc., located in Orlando, Florida.
Alan LaBatte: Vice President - Information Systems (Uno Restaurant Corporation)
Mr. LaBatte has served as Uno Restaurant Corporation's Vice President -
Information Systems since March 1994. From March 1991 to March 1994, Mr. LaBatte
was Director Information Services of Uno Restaurant Corporation. From February
1984 to March 1991, Mr. LaBatte served as Project Manager - Information Systems
for DeMoulas Supermarkets, Inc., located in Tewksbury, Massachusetts.
Eugene I. Lee: Senior Vice President-Operations
Mr. Lee has served as Senior Vice President of Operations for Uno Restaurant
Corporation since October 1994, when he assumed responsibility for all company
store operations. From September 1992 to September 1994, Mr. Lee was Vice
President-Company Operations. From June 1991 to August 1992, Mr. Lee was
Regional Director of Operations for Uno Restaurant Corporation, responsible for
the New York City, Washington, D.C. and Baltimore markets. From July 1990 to May
1991, Mr. Lee was the General Manager of Pizzeria Uno restaurant in Framingham,
Massachusetts.
Damon M. Liever: Senior Vice President - Marketing and Business Development
Mr. Liever has served as our Senior Vice President - Marketing and Business
Development since January 1994. Since March 1993, he has also served as Vice
President-Marketing of Uno Restaurant Corporation From March 1993 to January
1994, Mr. Liever was our Vice President. From September 1991 to February 1993,
he served as Vice President-Marketing
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for Unigate Restaurants, located in Dallas, Texas. From June 1982 to September
1991, Mr. Liever served in various marketing positions with the Pepsico system,
including positions with Frito-Lay, from June 1982 to June 1988, and Taco Bell,
from June 1988 to September 1991.
Craig S. Miller: President and Director
Mr. Miller joined us in June 1984, was elected a Vice President in February
1985, has been a Director since October 1, 1985, and has been our President
since October 1, 1986. Mr. Miller also has been President, Chief Operating
Officer, and a Director of Uno Restaurant Corporation since October 1986.
Diane Schupak: Senior Vice President-Sales and Director of Purchasing (Uno Foods
Inc.)
Ms. Schupak has served as Vice President-Sales and Director of Purchasing for
Uno Foods Inc., our affiliate, since May 1993. From August 1985 to May 1993, she
was National Sales/Operations Manager for Kraft Food Service, located in
Deerfield, Illinois.
Aaron D. Spencer: Director
Mr. Spencer has been a member of our Board of Directors since 1979. From 1979 to
October 1986, Mr. Spencer also served as our President. Mr. Spencer has also
served as Chairman and Chief Executive Officer of Uno Restaurant Corporation
since October 1986.
ITEM 3
LITIGATION
Our Predecessor was named as a defendant in an action entitled Pizzeria
Uno of Madison, Inc. v. Pizzeria Uno Corporation, brought in United States
District Court for the Western District of Wisconsin on August 10, 1989 (Case
No. 89-C-07395). The plaintiff alleged that our Predecessor, among other things,
violated the Wisconsin Fair Dealership Law by (a) substantially changing the
competitive circumstances of a dealership which it claims to have entered into
with our Predecessor and (b) our Predecessor's alleged failure to provide notice
of the change. The plaintiff sought compensation in an amount that was not
definitively alleged in the lawsuit. Our Predecessor denied the existence of an
agreement and filed a counterclaim against the plaintiff for contractual
interference. The case was settled by an agreement dated November 29, 1989. The
settlement agreement provided for, among other things, a mutual release of all
claims and dismissal of the suit. In accordance with the settlement agreement,
the plaintiff subsequently applied for and was granted an area franchise
agreement for a limited area in Wisconsin.
Other than this one action, no litigation is required to be disclosed
in the Offering Circular.
-5-
16
ITEM 4
BANKRUPTCY
No person previously identified in Items 1 or 2 of this offering
circular has been involved as a debtor in proceedings under the U.S. Bankruptcy
Code, or a comparable foreign bankruptcy law, required to be disclosed in this
Item.
ITEM 5
INITIAL FRANCHISE FEE
You must pay to us a unit franchise fee of $30,000, at the time you
sign the Franchise Agreement. The unit franchise fee is not refundable, and is
uniform for all franchisees.
You must also sign a Development Agreement and pay to us, when you sign
the Agreement, an amount equal to $10,000 for each Uno restaurant described in
the Development Schedule. This fee is not refundable, and is uniform for all
developers. Signing a Development Agreement will not alter your payment
obligations under any Franchise Agreement (i.e., the development fee will not be
applied to any unit franchise fees).
We may also offer to purchase on your behalf equipment, fixtures,
lighting, or furnishings in order to enable you to capture certain volume
discounts which we have negotiated or are able to negotiate, before you open the
Franchised Business. We are not obligated to do so. We have offered an initial
equipment package which includes furniture, fixtures, and decor/memorabilia for
approximately $250,000 to $400,000, and we impose an administrative mark-up of
5% on ovens and 10% on all other furniture, fixtures and equipment items. We
have also offered design services for a fee of approximately $3,000 to $8,000.
Since franchisees are not required to purchase these items from us, the minimum
total payments made to us for these items by a franchisee is $0. Except as
described above, we cannot estimate the range of these charges to
pre-operational franchisees during our last fiscal year.
-6-
17
ITEM 6
OTHER FEES
NAME OF FEE AMOUNT DUE DATE REMARKS
=======================================================================================================================
Continuing License 5% of Gross Revenues Payable monthly Gross Revenues
Fee or (during the first five on or before the includes all monies
years) a percentage 25th day of the and receipts derived
determined by our next month. from products or
variable royalty plan services sold at the
(whichever is lower), Franchised Business
but not less than or at special events.
$1,000 per month.(1) It does not include
sales taxes, certain
other taxes, and
certain other items.
- -----------------------------------------------------------------------------------------------------------------------
Business Coop Fee(2) Up to 1% of Gross Same as
Revenues. Continuing
License Fee.
- -----------------------------------------------------------------------------------------------------------------------
Minimum Local 2% of Gross Annually You must spend at
Advertising Expense Revenues. least 2% of Gross
- -----------------------------------------------------------------------------------------------------------------------
Revenues annually on
local advertising,
public relations,
and promotions of
your choice.
- -----------------------------------------------------------------------------------------------------------------------
Transfer Fee $2,000 Upon Assignment
- -----------------------------------------------------------------------------------------------------------------------
System Wide Media Up to 1% of Gross Same as Contributions will
Fund Fee(3) Revenue Continuing offset minimum local
License Fee advertising expense
requirements. See
Item 11.
- -----------------------------------------------------------------------------------------------------------------------
Advertising Association As determined by As determined by Contributions will
Fees Association Association offset minimum local
advertising expense
requirements. See
Item 11.
- -----------------------------------------------------------------------------------------------------------------------
-7-
18
- -----------------------------------------------------------------------------------------------------------------------
Audit Cost of the audit and Upon demand Payable only if audit
the next follow-up shows
audit. understatement of at
least 2%.
- -----------------------------------------------------------------------------------------------------------------------
Late Payment Fee Up to 1/2% of amount Upon demand
overdue, per month.
=======================================================================================================================
(1) The variable royalty plan enables an eligible franchisee to lower the
percentage rate of the Continuing License Fee during the first five years
following the opening of its business. The plan accomplishes this by identifying
the franchisee's total investment in the Franchised Business, then dividing the
Franchised Business' annual gross sales by the total investment, and then
multiplying that result by the royalty rate required under the Franchise
Agreement. For a detailed description of the formula, see Exhibit C of the
Franchise Agreement, which is attached to this Offering Circular.
In those states which require the payment of minimum wages to servers
(without allowing for a tip credit that would enable the employer to pay wages
below the minimum wage) we allow our franchisees, through an internal policy
statement (which may be amended or revoked without prior notice), to pay a
continuing license fee of only 4% of Gross Revenues.
(2) The Business Coop Fee covers your share of advertising, marketing, training
and inspection costs that we incur for the benefit of the System. These costs
include the following: salaries for people who are dedicated to ad development,
marketing and production support; assessments for administrative costs and
overhead for such people; costs for marketing, advertising, and production
activities; training films; inspections; and related functions. (See Section 8.1
of the Franchise Agreement)
(3) The System Wide Media Fund has not yet been implemented, but is designed to
facilitate media market spending in a way that benefits the System on a local,
regional or national basis through cooperative purchasing of print, radio or
television media. (See Section 8.8 of the Franchise Agreement and Item 11 of
this Offering Circular).
* * *
All fees, except certain Minimum Local Advertising Expenses, are
imposed, collected by, and paid to us. All fees are non-refundable.
The chart above applies to the Franchise Agreement only. There are no
other fees required by the Development Agreement. As of the date of this
Offering Circular, there are no advertising cooperatives or associations, and we
have not established a system wide media fund.
-8-
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ITEM 7
INITIAL INVESTMENT
METHOD OF TO WHOM
COST OR EXPENSE AMOUNT PAYMENT WHEN DUE PAID
- -----------------------------------------------------------------------------------------------------------------------
Unit Franchise Fee $30,000 Lump Sum At Signing of Us
Franchise
Agreement
- -----------------------------------------------------------------------------------------------------------------------
Initial Development $10,000 Lump Sum At Signing of Us
Fee Development
Agreement
- -----------------------------------------------------------------------------------------------------------------------
Leasehold $400,000 to As Arranged As Arranged Contractor
Improvements $900,000
- -----------------------------------------------------------------------------------------------------------------------
Furniture, Fixtures $275,000 to As Arranged As Arranged Suppliers
and Equipment (1) $400,000
- -----------------------------------------------------------------------------------------------------------------------
Initial Inventory $15,000 to $25,000 As Arranged As Arranged Suppliers
(Food, Paper,
Beverages)
- -----------------------------------------------------------------------------------------------------------------------
Point of Sale $41,000 to $49,000 As Arranged As Arranged Suppliers
Computer Hardware
and Software
- -----------------------------------------------------------------------------------------------------------------------
Pre-Opening Salaries $10,000 to $25,000 As Arranged As Arranged Suppliers
Travel, Lodging,
Meals
- -----------------------------------------------------------------------------------------------------------------------
Supplies (stationery, $10,000 to $20,000 As Arranged As Arranged Suppliers
business cards, etc.)
(for 3 months)
- -----------------------------------------------------------------------------------------------------------------------
Business Permits $7,000 to Lump Sum As Arranged Licensing
$15,000 Authorities
- -----------------------------------------------------------------------------------------------------------------------
Liquor License(2) $1,500 to $200,000 Lump Sum As Arranged Licensing
Authorities
- -----------------------------------------------------------------------------------------------------------------------
Insurance deposits $12,000 to Lump Sum As Arranged Insurers
and Premiums (for $30,000
first year)
- -----------------------------------------------------------------------------------------------------------------------
Architect Fees $10,000 to $40,000 As Arranged As Arranged Architect
- -----------------------------------------------------------------------------------------------------------------------
Other Professional $2,500 to $8,000 As Arranged As Arranged Attorneys,
Fees Accountants, etc.
- -----------------------------------------------------------------------------------------------------------------------
Land Lease(3) $15,000 to $40,000 Lump Sum Monthly Landlord
- -----------------------------------------------------------------------------------------------------------------------
-9-
20
METHOD OF TO WHOM
COST OR EXPENSE AMOUNT PAYMENT WHEN DUE PAID
- -----------------------------------------------------------------------------------------------------------------------
Utility Deposits $500 to $7,500 Lump Sum Monthly Utility Companies
- -----------------------------------------------------------------------------------------------------------------------
Advertising and $4,000 to $10,000 As Arranged As Arranged Suppliers,
Promotion Media, etc.
- -----------------------------------------------------------------------------------------------------------------------
Additional Funds (3 $80,000 to $120,000 As Incurred As Incurred Employees,
months)(4) Suppliers
- -----------------------------------------------------------------------------------------------------------------------
Total $923,500 to
$1,929,500
=======================================================================================================================
Note #1. The furniture, fixtures and equipment will vary, depending
upon the size and seating capacity of the Franchised Business, and your decor
preferences. We reserve the right to require a standard interior decor style,
but prefer that the Franchised Business reflect the location, market, and your
tastes within certain parameters prescribed and approved by us. We recommend our
prototype design for "pad locations" that do not have a building already on
them. We may charge an administrative mark-up for furniture, fixtures and
equipment ordered through us (see Item 8). The range of fees we might earn
(i.e., our mark-up) for such ordering would range from zero, if no items are
ordered through us, up to $40,000 if all items were ordered from us for a very
large restaurant with all new equipment.
Note #2. Liquor licenses range widely in cost. This variation reflects
the fact that some states issue only a limited number of new liquor licenses
each year, or none at all, and it may therefore be necessary to purchase an
existing license at its fair market value, which amount may be substantial.
Note #3. If you do not already own suitable restaurant space, the
premises must be purchased or leased. We anticipate that most franchisees will
lease the premises. We require a restaurant space of from 5,500 to 6,350 square
feet. We prefer that you lease or purchase a lot of approximately 1 1/2 acres
that is 150 feet or more wide. The cost of purchasing land will vary, depending
upon location and other factors, and cannot be accurately projected by us.
Note #4. This represents your initial start up expenses. These expenses
include payroll costs. These figures are estimates and we cannot guarantee that
you will not have additional expenses starting the business. Your costs will
depend on factors such as: how much you follow our methods and procedures; your
management skill, experience and business acumen; local economic conditions; the
prevailing wage rate; competition and the sales level reached during the initial
period.
To our knowledge, the costs or expenses described above are not
refundable.
As described in Item 10, we have arranged for STI Credit Corporation
a/k/a Sun Trust Credit, as successor to Stephens Diversified Leasing, Inc.
("STI") to offer financing for
-10-
21
the establishment of Uno restaurants. STI will offer financing for up to 75% of
the total cost of a qualified franchisee's assets in the Franchised Business,
exclusive of the unit franchise fee. The annual percentage rate of interest,
which may be subject to change, is currently 3% over the New York Prime, as
quoted by the Wall Street Journal, and the term of the financing is five to
eight years.
We anticipate that your expenses under the Development Agreement will
be primarily as described in the chart above, multiplied by the number of units
in the Development Schedule.
ITEM 8
RESTRICTIONS ON SOURCES
OF PRODUCTS AND SERVICES
In order to facilitate preparation, accuracy and inspection of records,
as well as customer service, you must purchase and fully utilize our designated
computer hardware and software systems for point of sale information and
controls. A description of these systems appears at Item 11.
You must install and, at all times during the term of the Franchise
Agreement, maintain an outdoor sign in a prominent location in accordance with
our sign specifications, or as approved, in writing, by us, unless prohibited
from doing so by applicable laws and regulations. You must also advertise, at
all times, in the classified or yellow pages of the local telephone directory
under the listing of "Restaurants" or "Pizza" using mats approved, in advance,
by us. Advertising programs and requirements are further described in Item 11.
You must remodel or upgrade your Franchised Business in accordance with
our standards for restaurants operating within the System. You will bear the
entire cost of doing so, and of adding equipment and altering the premises.
Procedures and restrictions regarding site selection, leases, and construction
appear at Item 11.
Only signs and menuboards, advertising and promotional material,
equipment, supplies, uniforms, paper goods, packaging, furnishings, fixtures,
food items, recipes, and food ingredients which meet our standards and
specifications (as established from time to time) for the System may be used at
or in connection with the Franchised Business.
Equipment, signs, menuboards, supplies, and other items must be added,
eliminated, substituted, and/or modified at the Franchised Business as soon as
practicable, in accordance with changes in our specifications and requirements.
No alterations to the premises of the Franchised Business materially
affecting the image of the Franchised Business may be made, except at our
written request or with our prior written approval, and any such alterations
must strictly conform to specifications and requirements established or approved
by us.
-11-
22
You may purchase directly, from any approved manufacturer, the
equipment, paper goods, and other products required for the Franchised Business.
As to certain proprietary food and seasoning products, we reserve the right to
approve only one manufacturer, not affiliated with us, and have done so for
manufacturers of tomato sauce and dough. We have also designated certain
beverage brands.
We will promptly furnish to you, upon your written request, the then
current standards and specifications applicable to any equipment, supplies,
trademarked paper goods, or other products required by us, provided that we will
not be obligated to disclose any of our trade secrets. In addition, we will
promptly furnish to you, upon your written request, the names and addresses of
all manufacturers, currently approved by us, from whom such equipment, supplies,
trademarked paper goods, and other products may be purchased.
If you desire to purchase the required products from a manufacturer not
then approved by us, you must provide us with all information regarding the
manufacturer which we reasonably request, and, upon our request, the
manufacturer must provide us with samples of its products. Any tests required by
us to determine whether the products meet our standards and specifications will
be performed by or under our direction or supervision, but at the cost of the
manufacturer. Upon the completion of any tests and any other procedures required
by us, we will determine whether the goods are of sufficient quality, and
whether the manufacturer possesses adequate capacity and facilities to supply
your needs in the quantities, at the times, and with the reliability requisite
to an efficient operation. We then will advise you and the manufacturer promptly
as to whether the manufacturer has been approved as a source of supply of the
products involved, and of the basis for our decision. We will not be required to
approve sources of equipment, paper goods, or other products which do not meet
our standards and specifications.
We may review the quality of the equipment, supplies, paper goods, and
other products produced or supplied by approved manufacturers (and their
capacity and facilities), and will have the right to monitor the production,
use, and ultimate disposition of items bearing our Intellectual Properties. On
the basis of this review and monitoring, we may remove manufacturers from the
list of approved sources. If we do so, we will promptly advise you.
Our specifications for products are generally issued through written
communications and are available to franchisees and approved suppliers. To
obtain approval of a product, you must submit a written request and provide
additional information which we may request. We often test products at
restaurants owned by our affiliates as part of our evaluation. We do not impose
a fee for product approval requests and generally process requests from between
one day to three months after we receive them.
We may offer to purchase kitchen equipment, fixtures, lighting, and
furnishings on your behalf in order to enable you to capture certain volume
discounts which we have negotiated or are able to negotiate. We impose a 5% to
10% administrative mark-up on these items if they are ordered through us. We are
an approved distributor of ovens. Otherwise, neither we nor our affiliates are
approved suppliers of goods or services.
-12-
23
Throughout the term of the Franchise Agreement, you must maintain:
(a) Workmen's Compensation insurance, in amounts prescribed by law;
(b) Fire, lightning, extended coverage, vandalism and malicious
mischief, and sprinkler leakage insurance on the premises of the
Franchised Business and all fixtures, equipment, supplies, and
other property used in the operation of the Franchised Business,
for not less than 80% of cash value, except that an appropriate
deductible clause will be permitted;
(c) Comprehensive general liability (including liability relating to
the serving of alcoholic beverages) insurance and product
liability insurance coverage in amounts and upon terms as may be
customary for restaurant businesses located in the Territory (as
defined in Item 12), these amounts not to be less than one
million dollars per occurrence, insuring both you and us (as an
additional insured party) against all claims, suits,
obligations, liabilities, and damages, including attorneys'
fees, based upon or arising out of actual or alleged personal
injuries and/or property damage relating to the use or condition
of the premises of the Franchised Business;
(d) Additional insurance as may be required by the terms of any
lease for the premises of the Franchised Business; and
(e) Business interruption insurance sufficient to pay rent and other
monthly obligations, such as the Continuing License Fee, in the
event of a catastrophe.
The obligations described above will not be limited in any way by
reason of any insurance which we may maintain.
All required insurance policies must be with responsible companies with
a rating by Moody's or A.M. Best of A grade or better qualified to do business
and in good standing in the state where the Franchised Business is located, and
must be in a form reasonably satisfactory to us. Prior to opening for business,
you must furnish to us certificates, issued by each of your insurers, indicating
that all premiums due have been paid, that all required insurance is in full
force and effect, and that the insurance will not be terminated or changed
without at least 30 days prior written notice from the insurer to us. These
insurance policies must also name us as additional insured. New certificates
evidencing renewal must be furnished at least 30 days prior to the date of
expiration of each policy. Within five business days of any request by us, you
must deliver a complete copy of each insurance policy to us.
If you fail to obtain or maintain adequate insurance, we, at our
election, may obtain and maintain insurance for you and in your name. Within
five business days of our written request, you must furnish all information
necessary to obtain and maintain the insurance, and must pay all costs of the
insurance.
During our last fiscal year our revenues for all required purchases and
leases (i.e., the 5%-10% mark-up described above) were approximately $20,000.
This represents .0002%
-13-
24
of our total revenues and does not appear as a separate revenue line on our most
recent profit and loss statement. Except as described above, we do not derive
any revenue from our franchisees' purchases or leases from third parties. To the
extent we are offered rebates from suppliers, these rebates are remitted to our
franchisees.
We estimate that the required purchases described above will represent
20% of all the purchases necessary to establish an Uno restaurant, and 20% of
all purchases necessary to operate an Uno restaurant.
As of the date of this Offering Circular, there are no purchasing or
distribution cooperatives. However, as described above, we offer franchisees the
benefit of our volume purchasing abilities.
We do not provide material benefits to franchisees based upon their use
of designated or approved sources.
ITEM 9
FRANCHISEE'S OBLIGATIONS
THIS TABLE LISTS YOUR PRINCIPAL OBLIGATIONS UNDER THE FRANCHISE AND
OTHER AGREEMENTS. IT WILL HELP YOU FIND MORE DETAILED INFORMATION ABOUT YOUR
OBLIGATIONS IN THESE AGREEMENTS AND IN OTHER ITEMS OF THIS OFFERING CIRCULAR.
=======================================================================================================================
ITEM IN OFFERING
OBLIGATION SECTION IN AGREEMENT CIRCULAR
- -----------------------------------------------------------------------------------------------------------------------
Site selection and acquisition/lease Section 10 of Franchise Agreement, Items 6 and 11
Section B of Development Agreement
- -----------------------------------------------------------------------------------------------------------------------
Pre-opening purchases/leases Section 14 of Franchise Agreement Item 8
- -----------------------------------------------------------------------------------------------------------------------
Site development and other pre-opening Section 10 of Franchise Agreement, Items 6, 7 and 11
requirements Section B of Development Agreement
- -----------------------------------------------------------------------------------------------------------------------
Initial and ongoing training Section 13.2(b) of Franchise Agreement Items 6, 7 and 11
- -----------------------------------------------------------------------------------------------------------------------
Opening Section 10 of Franchise Agreement, Item 11
Section B of Development Agreement
- -----------------------------------------------------------------------------------------------------------------------
Fees Sections 5, 7 and 8 of Franchise Items 5 and 6
Agreement, Section C of the Development
Agreement
- -----------------------------------------------------------------------------------------------------------------------
Compliance with standards and Sections 12 and 13 of Franchise Item 11
policies/Manuals Agreement
- -----------------------------------------------------------------------------------------------------------------------
Trademarks and proprietary information Section 16 of Franchise Agreement Items 13 and 14
- -----------------------------------------------------------------------------------------------------------------------
Restrictions on products/services offered Section 13.2 of Franchise Agreement Item 16
- -----------------------------------------------------------------------------------------------------------------------
Warranty and customer service requirements Section 13.2(r) of Franchise Agreement Item 16
- -----------------------------------------------------------------------------------------------------------------------
Territorial development and sales quotas Section B of Development Agreement Item 12
- -----------------------------------------------------------------------------------------------------------------------
-14-
25
=======================================================================================================================
ITEM IN OFFERING
OBLIGATION SECTION IN AGREEMENT CIRCULAR
- -----------------------------------------------------------------------------------------------------------------------
Ongoing product/service purchases Section 14 of Franchise Agreement Item 8
- -----------------------------------------------------------------------------------------------------------------------
Maintenance, appearance and remodeling Sections 11 and 13 of Franchise N/A
requirements Agreement
- -----------------------------------------------------------------------------------------------------------------------
Insurance Section 15 of Franchise Agreement Items 6 and 8
- -----------------------------------------------------------------------------------------------------------------------
Advertising Section 8 of Franchise Agreement Items 6 and 11
- -----------------------------------------------------------------------------------------------------------------------
Indemnification Section 15 of Franchise Agreement Items 6
- -----------------------------------------------------------------------------------------------------------------------
Owner's participation/management/staffing Section 13 of Franchise Agreement Items 11 and 15
- -----------------------------------------------------------------------------------------------------------------------
Records and reports Sections 7 of Franchise Agreement Item 6
- -----------------------------------------------------------------------------------------------------------------------
Inspections and audits Sections 13.4 and 7.2 of Franchise Items 6 and 11
Agreement
- -----------------------------------------------------------------------------------------------------------------------
Transfer Section 20 of Franchise Agreement, Item 17
Section D(1)(d) of the Development
Agreement
- -----------------------------------------------------------------------------------------------------------------------
Renewal or Extension of Rights Section 4 of Franchise Agreement Item 17
- -----------------------------------------------------------------------------------------------------------------------
Post-termination obligations Section 19 of Franchise Agreement, Item 17
Section D(2) of the Development
Agreement
- -----------------------------------------------------------------------------------------------------------------------
Noncompetition covenants Section 18 of Franchise Agreement Item 17
- -----------------------------------------------------------------------------------------------------------------------
Dispute resolution Sections 24.7 and 24.8 of Franchise Item 17
Agreement
=======================================================================================================================
ITEM 10
FINANCING
Except as described below, we do not offer direct or indirect financing
for franchisees or developers, nor do we guarantee notes, leases, or other
obligations for franchisees or developers.
We have arranged for STI Credit Corporation a/k/a Sun Trust Credit, as
successor to Stephens Diversified Leasing, Inc., a third party lender which is
not affiliated with us ("STI") to offer financing for the establishment of
Pizzeria Uno restaurants. STI offers financing for up to 75% of the total cost
of a qualified franchisee's assets in the Franchised Business, exclusive of the
unit franchisee fee. STI currently charges an annual percentage rate as of
December 31, 1995, of interest of 3% over New York Prime, as quoted by the Wall
Street Journal. This rate is subject to change. The loan will be secured by a
first priority security interest in all accounts receivable, contract rights,
inventory, machinery, equipment, furniture, fixtures, and certain other assets.
The term of the financing is five to eight years. STI will require that you (or
if a corporation or partnership will execute the Franchise Agreement, that the
shareholders and partners) guarantee the financing. The financing may be
prepaid, but you will be required to pay a prepayment fee of 2.5% of the
remaining principal balance. Your potential liabilities upon default of the
financing include
-15-
26
an accelerated obligation to pay the entire amount due and an obligation to pay
all costs of collection, including attorney's fees. These terms are included in
the Promissory Note, which is attached, along with other financing documents, to
Item 22 of this Offering Circular. You will note that the attached financing
documents reflect STI's predecessor's name of Stephens Diversified Leasing,
Inc.. They will soon be updated by STI. We may guarantee the financing with STI.
We do not have any past or present practice or intent to sell, assign,
or discount to a third party, all or part of the financing arrangement, but
reserve the right to do so. Neither we nor our affiliates receive payments for
the placement of financing with STI or any other lender.
ITEM 11
FRANCHISOR'S OBLIGATIONS
Except as listed below, we need not provide any assistance to you.
Pre-Opening Obligations
Prior to the opening of the Franchised Business to the public, we are
required by the Franchise Agreement to provide the following services to you.
The Development Agreement does not require us to provide any services to you:
We will offer to you such initial services as we deem necessary or
advisable in connection with furthering your business and the System,
and in connection with protecting our Intellectual Properties and
goodwill, all within our sole and absolute discretion. The initial
services may include assistance in restaurant layout, design, and
equipment specification; on-site assistance with respect to pre-opening
activities; furnishing the Manuals, as defined in Item 14; providing
operating advice and training at our designated location (which may be
an operating outlet); and recommending accounting and business
procedures which we believe may be of value. We may, upon advance
notice, make reasonable charges for services provided to any franchisee
or group of franchisees on an optional basis. We may offer certain
products for sale to you for use in your operations, but are not bound
to do so, except for ensuring (subject to causes or conditions beyond
our control) a source for items which incorporate our trade secrets and
are essential for the operation of the Franchised Business.
(Franchise Agreement Section 9)
Continuing Obligations
After the opening of the Franchised Business to the public, we are
required by the Franchise Agreement to provide the following services to you.
The Development Agreement does not require us to provide any services to you:
-16-
27
We will offer to you such continuing services as we deem necessary or
advisable in connection with furthering your business and the System,
and in connection with protecting our Intellectual Properties and
goodwill, all within our sole and absolute discretion. The continuing
services may include on-site assistance with respect to opening
activities; furnishing updates to the Manual and recipes; providing
operating advice and training on a continuing basis through our
representatives; further refinement of products and equipment, and
engineering research and development which, in our opinion, may be
beneficial to your operations; recommending accounting and business
procedures which we believe may be of value; and scheduling and holding
local, regional, and national meetings and seminars for the advancement
and dissemination of methods in processing and marketing Approved
Products. We may, upon advance notice, make reasonable charges for
services provided to any franchisee or group of franchisees on an
optional basis. We may offer certain products for sale to you for use
in your operations, but are not bound to do so, except for ensuring
(subject to causes or conditions beyond our control) a source for items
which incorporate our trade secrets and are essential for the operation
of the Franchised Business. (Franchise Agreement Section 9)
* * *
Advertising Programs
Advertising Associations (Franchise Agreement Section 8.2)
We have the right, in our discretion, to designate any geographical
area (e.g., an area of dominant influence or "ADI") as a region for purposes of
establishing an advertising association ("Association"). An Association may be
composed of one or more Uno restaurants operated by us and/or one or more Uno
restaurants operated by you or another of our franchisees. If an Association has
been established for the geographic area in which the Franchised Business is
located at the time you commence business, you must immediately execute the
documentation we require and become a member of the Association. If an
Association applicable to the Franchised Business is established at any later
time, you must execute the documentation we require (no specific form of
governing documents currently exists) and become a member of the Association no
later than 30 days after the date on which the Association commences operation
as provided below:
(a) Each Association must be organized and governed in a form
and manner, and must commence operation on a date we approve in advance and in
writing.
(i) Each Association must be organized for the
purposes of, and all contributions to the Association and any earnings on those
contributions must be used exclusively to meet any and all costs for,
maintaining, directing and preparing advertising and/or promotional activities
(including, among other things, the cost of preparing and conducting television,
radio, magazine and newspaper advertising campaigns, direct mail and outdoor
billboard advertising; marketing surveys and other public relations activities;
employing advertising agencies; and providing promotional brochures and other
marketing
-17-
28
materials to the outlets operated under the System) in connection with regional
advertising. These monies may also be used to defray our reasonable
administrative costs and overhead as we may incur in activities reasonably
related to the administration or direction of the Association or related to any
advertising program conducted by or on behalf of the Association. The
Association is operated solely as a conduit for the collection and expenditure
of advertising contributions for the purposes stated in the Franchise Agreement.
(ii) No advertising or promotional plans or materials
may be used by an Association or furnished to its members without our prior
approval. All such plans and materials must be submitted to us in accordance
with the procedures in the Franchise Agreement.
(iii) You must contribute to the Association an
amount prescribed by the Association, at the times and in the manner prescribed
by the Association, and must submit to the Association and to us other
statements or reports as may be required by us or by the Association with our
prior written approval.
(b) We, in our sole discretion, may grant to any franchisee,
an exemption for any length of time from the requirement of membership in an
Association, upon written request from the franchisee stating reasons supporting
the exemption. Our decision concerning the request for exemption will be final.
At present there are no local advertising associations. Member
franchisees' required contributions to the associations will be determined by a
vote of the members. We or someone we designate will be responsible for
administration of the associations. The associations must prepare annual or
periodic financial statements, which will be available for your review. We have
the power to require associations to be formed (subject to the above), changed,
dissolved, or merged.
Any action or advertising programs undertaken by any Association will
not diminish your obligations to pay the Business Coop Fee, but any expenditures
for these actions or programs will count toward Minimum Local Advertising
Expense obligations described in Item 6, above. (Franchise Agreement Section
8.3)
System Wide Media Fund (Franchise Agreement Section 8.8)
We also reserve the right to assess you for contributions to a system
wide media fund which will be designed to facilitate media market spending in a
way that benefits the System through cooperative purchasing of media (the
"System Wide Media Fund"). The System Wide Media Fund can be implemented on
either a local, regional, or national basis. This assessment, if made, will be
included in the calculation of your Minimum Local Advertising Expense. We have
not, as of the date of this offering, circular established this Fund.
Advertising for the System Wide Media Fund may be prepared by our in-house
advertising department or an advertising agency. Upon our establishment of the
System Wide Media Fund, your obligations will be as follows:
-18-
29
(a) On the 25th day of each month during the term of the
Agreement, you must contribute an amount we designate, but not more than 1% of
your Gross Revenues for the preceding month.
(b) We, or our designee, will maintain and administer the
System Wide Media Fund as follows:
(i) We will oversee all advertising and promotional
programs with sole discretion to approve or disapprove the creative concepts,
materials and media used in these programs, and the placement and allocation of
them. The System Wide Media Fund is intended to maximize general public
recognition and acceptance of the Intellectual Properties for the benefit of the
System on a local, regional or national basis.
(ii) The System Wide Media Fund, all contribution to
it, and any earnings on it will be used exclusively by us to purchase radio,
television or print media on a local, regional or national basis.
(iii) You must contribute to the System Wide Media
Fund by separate check made payable to the System Wide Media Fund. All sums paid
by you to the System Wide Media Fund will be maintained in an account separate
from our other monies and will not be used to defray any of our expenses, except
for costs incurred for media that benefits any part of the System. The System
Wide Media Fund and its earnings will not otherwise inure to our benefit. We or
our designee will maintain separate bookkeeping accounts for the System Wide
Media Fund.
(iv) It is anticipated that all contributions to and
earnings of the System Wide Media Fund will be expended for advertising and/or
promotional purposes during the taxable year within which the contributions and
earnings are received. If, however, excess amounts remain in the System Wide
Media Fund at the end of the taxable year, all expenditures in the following
taxable year(s) will be made first out of accumulated earnings from previous
years, next out of earnings in the current year, and finally from contributions.
(v) The System Wide Media Fund will not be our or our
designee's asset. The System Wide Media Fund is operated solely as a conduit for
the collection and expenditure of advertising contributions. A statement of the
operations of the System Wide Media Fund as shown on our or our designee's books
will be prepared annually and will by made available to you upon your request.
(vi) Although the System Wide Media Fund is intended
to be of perpetual duration, we maintain the right to terminate the System Wide
Media Fund. The System Wide Media Fund will not be terminated, however, until
all monies in the System Wide Media Fund have been expended for advertising
and/or promotional purposes.
Business Coop, Minimum Advertising Expenses, and Other Advertising
Programs
The Business Coop program, the Minimum Advertising Expense, signage
requirements, and telephone directory requirements are described in Items 6, 8
and 9.
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The Business Coop program (and any voluntary advertising program) may
place advertising in print, audio, television, or other media. The coverage of
Business Coop advertising may be local, regional, or national in scope. There
are also voluntary promotional programs developed for use by all restaurants,
but participation is optional. Advertising for these programs is developed both
internally by us, and by an outside advertising agency.
The Business Coop Program is administered by us, it is audited
annually, and the annual audited financial statements are available for review
by franchisees. In the most recently concluded fiscal year the Business Coop
program spent its funds in the following percentages: 49.7% on production; 11.7%
on media placement; 25.9% on administrative expenses; and 12.7% on other
(including menu production, secret shopping services, sanitation inspections and
research and development). Neither we or our affiliates receive payment for
providing goods or services to the Business Coop program.
For the Business Coop program, we are not obligated to spend any amount
on advertising in the area or territory where you are located. If fees are not
spent in the fiscal year in which they accrue, the fees will be carried forward
into the following fiscal year. Except as described above, franchisees will
receive a periodic accounting of how advertising fees are spent. No funds are
used for advertising that is principally a solicitation for the sale of
franchises. There is no advertising council composed of franchisees, but there
is a Franchise Advisory Board (the "FAB"), through which you may make comments
on advertising policy or programs. The FAB acts in an advisory capacity only.
Members are selected by a vote of franchisees (one vote per franchisee), and we
reserve the right to change, reform or dissolve the FAB.
* * *
Both franchised and company-owned Uno restaurants contribute to the
advertising programs described above. Company-owned Uno restaurants contribute
on the same basis as franchisees. The amount which you must contribute is
described in Item 6, and is the same for all franchisees.
You must submit a sample of each type of advertising material to us
prior to use, and, upon receipt of the material, we will have 10 working days to
approve or disapprove the material. If we take no action within 10 days, you may
use the material submitted. We may disapprove if, in our sole discretion, the
material is offensive, inaccurate, strategically inappropriate, potentially
harmful to the Intellectual Properties or otherwise injurious to us or
franchisees. Any expenditures for advertising that we have not approved will not
be counted toward satisfaction of your Minimum Local Advertising Expense, as
described in Item 6. (Franchise Agreement Section 8.4)
Electronic Cash Register and Computer Programs
You must fully utilize our designated computer hardware and software
systems for point of sale information and controls, and must allow us access to
these systems. (Franchise Agreement Section 7.4) We may designate new or
upgraded systems. There is no
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contractual limitation on the frequency or cost of your obligation of purchased
new systems or to upgrade your existing systems.
As of the date of this Offering Circular, we have designated the NCR
7450 POS System (the "POS System") for use by our franchisees. The POS System is
a combined hardware and software system, which is manufactured by AT&T Global
Information Solutions and is commonly used in the restaurant industry. AT&T
Global Information Solutions is located at 1700 South Patterson Blvd., Dayton,
Ohio 45479. Its telephone number is (513) 297-5700. The POS System has been in
continuous use by us and our franchisees since February of 1995. The POS System
controls sales transactions and is capable of generating a wide variety of
reports including: terminal totals listings, cashier totals listings, server
totals listings, and menu item sales analysis.
The POS System is the proprietary property of AT&T Global Information
Solutions, of which we are not affiliated. You may purchase the POS System from
any approved supplier. Neither we, our affiliates, or a third party has the
contractual right or obligation to provide ongoing maintenance, repairs,
upgrades or updates. The annual cost of any optional maintenance and support
contracts, upgrades and updates is dependent upon the number of terminals in the
restaurant. It is anticipated that such costs will be under $3,500 per year.
Operating Manuals
The table of contents of our Manuals are attached to this Offering
Circular as Attachment B. The attachment describes the number of pages devoted
to each subject. The total number of pages in each of the Manuals appears in the
tables of contents of Attachment B.
Site Selection
If no location is specified for the Franchised Business in the
Franchise Agreement, you, at your sole cost and expense, will be responsible for
locating and designating a site for the Franchised Business within a trade area
specified in the Franchise Agreement, and for constructing and equipping an Uno
restaurant at the location in accordance with our standards. Request for
approval of the site along with a complete site package, including demographic
information, pro forma business plan and any other information we designate,
must be submitted, in writing prior to starting negotiations or making
expenditures for the site, to our applicable Vice President for acceptance,
which will be deemed given if we do not specify our objections, in writing,
within 20 working days. You are solely responsible for taking all steps
necessary to obtain approval of and open the Franchised Business in a timely
fashion in accord with any applicable development schedule agreed to in writing
by us and you. We may reject any location at our discretion if the location does
not meet our criteria for site selection. We make no representations or
warranties with respect to the availability of appropriate locations, or the
suitability or potential of locations which we approve. Our approval of a
location merely reflects our bona fide belief that the proposed location appears
to be suitable for the development of an Uno restaurant. You must provide us
with the information and data as we may reasonably request in connection with
our evaluation
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of the location, including, the cost of acquisition, development, and
construction and, if you are to lease the property, a copy of the lease. Any
location inspection will be made solely at our option, and will not be deemed to
impose any liability, obligation, or responsibility on us for the construction
of the restaurant or otherwise. (Franchise Agreement Section 10.1)
In addition to the information described above, we will consider the
following criteria when deciding whether to approve a proposed location: the
general location and neighborhood, traffic patterns, parking, size, layout,
physical characteristics, competition and demographics.
If you will lease your Uno restaurant, the lease will be subject to our
reasonable approval and must provide: (i) that upon termination of the Franchise
Agreement, we, or our designee will have the option, for 30 days, to assume your
remaining obligations under the lease without responsibility for any liability
resulting under the lease before the effective date of the assignment, or to
execute a new lease for the remaining term on the same or more favorable terms
and conditions that existed between the landlord and you; (ii) that copies of
all notices of default under the lease must be sent to us; (iii) that if you
default under the lease, we or our designee will have an opportunity to cure the
default and assume your remaining obligations under the lease, but will not have
any obligation to do so; and (iv) that all signs, advertising, logos, or other
forms or insignia indicative of the System or products, be removed from the
premises if you, us or our designee are not the tenant under the lease, or upon
termination of the Franchise Agreement. (Franchise Agreement Section 10.2)
You must construct (or renovate) and equip the Franchised Business at
your expense, in a good and workmanlike manner, in conformity with all
applicable laws, rules, regulations, and requirements, and in accordance with
the plans our guidelines, or, subject to our prior written approval, your plans
and specifications. All plans, specifications, or modifications which you
propose must be submitted to us within a reasonable time before you commence
construction, and must be modified as we reasonable request. You must make the
changes we recommend for periodic improvement of equipment or facilities
whenever feasible within the space and configuration of the premises. (Franchise
Agreement Section 10.3)
You must immediately cause any mechanics' liens, materialmen's liens,
or other liens which may be recorded or perfected, or which may otherwise attach
to all or any portion of your premises, as a result of work done by or for you,
to be discharged or released of record or fully bonded. If the Franchised
Business is not open for business on or before a date set forth in the Franchise
Agreement, other than as a result of a "force majeure" or our acts or omission,
we may terminate the Franchise Agreement by 30 days prior written notice unless
you open the Franchised Business within the 30 day period. "Force majeure" means
certain events including, but limited to, acts of God, unforeseen unavailability
of raw materials or supplies, inability or unavoidable delay in obtaining
necessary equipment, approvals, permits, or licenses, and unavoidable labor
disputes. (Franchise Agreement Section 10.4)
You may not open the Franchised Business until we reasonably agree that
all construction has been completed satisfactorily, that the designated manager
and all employees have been duly trained, that the Franchised Business is ready
for opening in all other respects (including menus, signboards, inventory,
uniforms, furniture, fixtures, and
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equipment), that the Initial Franchise Fee has been paid in full, that
certificates of insurance have been furnished, that you are in compliance with
all of the terms of the Franchise Agreement, and that all items contained in our
Opening Checklist (contained in the latest version of the Manual) have been
completed to our satisfaction. (Franchise Agreement Section 10.5)
The typical length of time between the signing of the Franchise
Agreement and the opening of an Uno restaurant is estimated to be approximately
10 to 12 months. Factors which may affect this time period include your ability
to identify a proper location, obtain a lease, obtain necessary zoning and
building permits, and obtain financing, as well as the availability of your
contractor.
Training Program
You or your designated Control Person(s), and all employees at the
Franchised Business must attend and complete such courses, programs, and
seminars at such locations as we reasonable may require, both before and after
you open the Franchised Business, and you must pay all salary, travel, hotel,
meal, and other expenses of persons attending. The training materials will be
provided free of charge. Initial training is required for a minimum of three
management employees of your choice, which will include training at our
headquarters and at a company restaurant outlet. The training must be completed
satisfactorily at least four weeks before you open the Franchised Business.
(Franchise Agreement Section 13.2(b))
During the training period, there are 40 hours of classroom
instruction. The classroom instruction includes certification of each trainee by
the National Restaurant Association in Serving Safe Food.
The initial training program will be conducted on an as-needed basis.
Instructional materials include the Manuals, videos, slides, checklists, and
tests. The training also features some role playing demonstrations. The program
is available to all recently hired or promoted restaurant managers. The
instructors include:
Mr. Thomas Gathers, Senior Vice President - Human Resources and
Training (Uno Restaurant Corporation) oversees all training programs with the
assistance of a staff of training managers. His employment experience is
described in Item 2.
Other instructors include General Managers of affiliate-owned
restaurants, as well as corporate human resource specialists and various other
company executives.
The subjects in the initial training program are described below:
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Hours of Hours of
Classroom on the Job How Often
Subject Training Training Location Held
------- -------- -------- -------- ----
Restaurant Operations 0 8-11 weeks Co. Outlet As Needed
Employee Supervision 10 0 Corp. Headquarters As Needed
Quality Food 8 0 Corp. Headquarters As Needed
Management and Cost
Control
Employment Law 4 0 Corp. Headquarters As Needed
Guest Relations 3 0 Corp. Headquarters As Needed
Serving Safe Food 5 0 Corp. Headquarters As Needed
Employee Selection, 8 0 Corp. Headquarters As Needed
Performance Appraisals
& Training
ITEM 12
TERRITORY
Franchise Agreement
The Franchise Agreement grants you the right to (i) establish and
operate the Franchised Business under the System and the Intellectual
Properties, in accordance with the Franchise Agreement, (ii) prepare and market
only Approved Products (as defined below) at the Outlet Location only in
connection with products and services meeting our quality standards, and (iii)
such additional activities as are specified in the Franchise Agreement.
If, at the time you sign the Franchise Agreement, you have not obtained
and we have not approved a location for the Franchised Business, the Franchise
Agreement will designate a trade area within which you must locate the
Franchised Business. You must lease or acquire a location subject to our
approval, as described in the Franchise Agreement.
If the premises of the Franchised Business or a substantial part of the
premises is to be taken by eminent domain, the premises may be relocated within
the trade area described above, or elsewhere, with our prior written approval
and in accordance with our relocation
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procedures. You must open a new premises at another location, in accordance with
our specifications within one year of the closing of the old premises.
During the term of the Franchise Agreement, we will not use or license
others to use any of the Intellectual Properties within the "Territory", except
as described below. The Territory will be the circular geographic area having as
its center the Outlet Location and (a) a radius of three (3) miles, or (b)
within which 100,000 people live and/or work, whichever area contains fewer
square miles. We and our affiliates may sell or license others to sell, within
the Territory, regardless of the impact on the Franchised Business:
(a) through quick-service restaurants or otherwise, food products which
bear different trade names, trademarks, and service marks from those
licensed under the Franchise Agreement;
(b) any food products sold through grocery or convenience stores or
through other outlets that are primarily for retail goods, or products
sold through mail order or catalogue, including products which bear our
trade names, trademarks, and service marks;
(c) any food products of any trade name within hotels, theaters or
other outlets that serve a primary target market residing or working
within the four walls of one facility;
(d) any food products which bear the trade names, trademarks, and
service marks at special events. We will provide you with thirty days
notice of any special event sale, and you will have ten days following
your receipt of notice to elect to participate in the special event; or
(e) any goods or services, other than food products, which are
identified by any marks, including the Intellectual Properties, through
any method of distribution.
We may franchise, license, or allow the use of any of the Intellectual
Properties anywhere outside the Territory, regardless of the impact on the
Franchised Business.
You may not sell any product for resale, sell any product at or from
any place except the Outlet Location or a delivery vehicle originating from the
Outlet Location, nor may you prepare any Approved Product at any place other
than the premises of the Franchised Business. You may not deliver products
beyond the Territory unless delivery is to a point outside of the protected
territory of any other franchisees and is approved by us.
Continuation of your territorial exclusivity is not dependent upon
achievement of any specific sales volume, market penetration or other
contingency.
You are not granted any options, rights of first-refusal or similar
rights to acquire additional franchises within the Territory or contiguous
territories.
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Area Development Agreement
The Area Development Agreement grants to you the exclusive right to
construct and operate a designated number of Franchised Businesses in a specific
geographic area ("Area Development Territory"). The Area Development Territory
will be negotiated with us and will be bounded by streets, political boundaries,
and/or geographic features, or will be a radius from a specific location. You
must sign a separate, then current (i.e., most recently revised form of)
Franchise Agreement for each Franchised Business opened pursuant to the Area
Development Agreement.
If you fail to meet the Development Schedule, we may, among other
things, terminate the Area Development Agreement as it applies to any one or
more Franchised Businesses which, at the time of the default, have not been
opened for business. If you fail to meet the Development Schedule, we may also
grant rights for the construction and operation of casual theme pizza
restaurants or other facilities within the Area Development Territory to any
other person or entity, or we may elect to develop and construct food service
facilities within the Area Development Territory.
If, during the term of any Franchise Agreement under which you open a
Franchised Business in the Area Development Territory, and following your full
compliance with the Development Schedule, we determine that it is desirable to
operate one or more additional Pizzeria Uno casual theme restaurants within the
Area Development Territory, and provided that you are in full compliance with
all Franchise Agreements, we may create, operate or permit creation and
operation of additional food service facilities within the Area Development
Territory, but you will have a right of first refusal to obtain the development
rights to all such additional Pizzeria Uno Restaurants upon the terms and
conditions we then determine. We will advise you, in writing, of the terms and
conditions for the acquisition of the development rights for additional Pizzeria
Uno restaurants. You must notify us, in writing, within 30 days of the receipt
of the notice, if you wish to acquire these development rights. If you do not
exercise this right of first refusal, we, within 90 days from the expiration of
the 30 day period, may grant development rights to others under the same terms
and conditions, or we may elect to develop and construct any one or more of the
additional Uno restaurants within the Area Development Territory; provided,
however, that no person, other than you, will be permitted to construct, own or
operate a Uno restaurant within the "Territory" (as defined in the Franchise
Agreement) of any of your Pizzeria Uno restaurants.
* * *
We or our affiliates currently sell and plan to sell refrigerated and frozen
consumer foods to commercial customers. These foods include Uno brand and
private label pizza and other products. They are sold or will be sold to grocery
stores, hotels, movie theatres, air carriers (for in-flight meals) and other
outlets which are not owned or operated by us or our affiliates and which may be
located in the Territory or the Area Development Territory. These products are
sold under the Intellectual Properties and private label brands, such as "North
End" and "Autentico". We have not established a timetable for further future
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development of these plans, and do not anticipate that these plans will conflict
with your rights under the Franchise Agreement.
We are currently testing two concepts known respectively as an "Uno's
Takery," and an "Uno's Slice Shop". Uno's Takeries and Uno's Slice shops are
smaller-sized Uno restaurants which are identified by the Intellectual
Properties. Takeries are designed to fill markets in which the System already
maintains a significance presence. Slice Shops are designed to operate in
airport terminals and within food courts for tollways and major thoroughfares.
Both offer a limited line of menu items and only non-alcoholic beverages. Our
affiliates currently operate three Takeries and we have licensed one Slice Shop.
Depending upon the test results and other factors, we may, in the future, choose
to offer franchises for Takeries and Slice Shops. We have not yet established a
timetable for the plan. If we offer these franchises, we do not anticipate that
there will be conflict with full-services franchises regarding territory,
customers, or franchisor support.
Our affiliates have offered licenses for the establishment of
businesses which offer food items similar to those to be offered by the
Franchised Business. The businesses utilize the Intellectual Properties and are
located in grocery stores and movie theaters.
Our affiliates also operate seafood restaurants (under the mark "Bay
Street Grill") and a Mexican restaurant. We do not believe that the products or
services offered by these restaurants are part of the same product or service
market.
ITEM 13
TRADEMARKS
We have registered the following principal marks on the Principal
Register of the United States Patent and Trademark Office:
=======================================================================================================================
NAME REGISTRATION DATE REGISTRATION NUMBER
---- ----------------- -------------------
PIZZERIA UNO 4/11/78 1,089,458
UNO 4/2/85 1,329,014
UNO'S 3/6/90 1,586,246
UNO 10/2/90 1,615,917
UNO 3/9/93 1,757,093
UNO 12/28/93 1,814,299
UNO & DESIGN 7/19/94 1,846,019
=======================================================================================================================
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We have filed all required affidavits in relation to the marks
described above. We have not renewed any of the registrations described above as
none are due for renewal until 1998.
We have filed applications of the following marks, with the United
States Patent and Trademark Office. As of the date of this Offering Circular,
these applications are pending:
=======================================================================================================================
NAME APPLICATION DATE SERIAL NUMBER
---- ---------------- -------------
UNO (for clothing) 2/6/90 (actual use) 74/026,477
UNO (for bakeware) 12/22/92 (intent to use) 74/342,188
=======================================================================================================================
There are no currently effective determinations of the United States
Patent and Trademark Office, the Trademark Trial and Appeal Board, the trademark
administrator of this state or any court, any pending interference, opposition
or cancellation proceeding and any pending material litigation involving the
marks described above which are relevant to their use in the state.
Except as described below, there are no agreements currently in effect
which significantly limit our rights to use or license the use of the marks in
any manner material to the franchise. There is an independent chain of pizza
restaurants, Numero Uno, Inc., doing business in the state of California under
the name "Numero Uno." That chain has agreed not to use the names "Numero Uno"
or "Uno" in the United States, outside California. Under the same agreement,
dated June 24, 1981, we have agreed not to use the name "Numero Uno" in
California in our advertising or printed materials (except as a description of a
menu item), or as the name of a restaurant. The agreement is of perpetual
duration and may not be unilaterally canceled or modified. Additionally, under
an agreement dated October 2, 1990, between us and our affiliates and Uno's
Pizza, Inc. and its principals ("Uno's Pizza, Inc."), Uno's Pizza, Inc. (an
unaffiliated third party) retains the right to use the mark "UNO's" in a small
non-exclusive area in West Seneca, New York. Uno's Pizza, Inc. has agreed not to
expand the use of the name to other sites and not to transfer the name to any
third party. The agreement is a perpetual duration and may not be unilaterally
canceled or modified. Also, on May 22, 1995, we entered into an agreement with
International Games, Inc. whereby our superior right to the marketing of
clothing in our restaurants has been acknowledged and we allowed International
Games, Inc. to market game-related clothing bearing the mark "UNO" within their
channels of trade. The agreement is of perpetual duration and may not be
canceled or modified.
We are aware of a pizza restaurant in Platteville, Wisconsin operating
under the name "Pizzeria Uno"; a restaurant in Lagrangeville, New York, using
the name "Numero Uno"; a restaurant in Oak Forest, Illinois, using the name
"Pizzeria Numero Uno"; a restaurant in San Juan, Puerto Rico, using the name
"Restaurant Uno"; and a restaurant in Astoria, New York, using the name "Gyro-
Uno." There are no other infringing uses actually known to us which could
materially affect your use of marks.
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Except as described above, we know of no superior prior rights or
infringing use which could materially affect your use of the marks except as
noted above.
You must immediately notify us of any possible infringement or
challenge to the marks. We are not obligated by the Franchise Agreement, the
Development Agreement or otherwise to protect any rights which you have to use
the marks and are not obligated to have the right to control all administrative
proceedings or litigation relating to the marks. You must also assist us in
taking any action that we deem necessary for the protection of the marks. If, at
any time, we choose to modify or discontinue the use of any mark, you must
comply with our directions at your expense.
ITEM 14
PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION
Patents, Copyrights and Intellectual Properties
Except as described below, we do not own any registered patents that
are material to the franchise. Although we have not filed applications for
copyright registration, we claim copyrights on all our menus, point of purchase
materials and all like materials used in the System. Item 11 describes
limitations on your use of this material.
Aaron Spencer, our Director, has obtained, and permits us and our
affiliates to use, a patent for a unique take-out box. The box has a cup and lid
retainer and is utilized by Uno restaurants. The patent was granted on February
28, 1986 and assigned patent number 4,572,423. The patent runs for 17 years from
the date it was granted. Although you will not be granted the right to use the
patent, the Franchised Business will utilize the take-out box. There are no
currently effective determinations of the U.S. Patent and Trademark Office or
any court; pending infringement, opposition, or cancellation proceeding; or
pending material litigation involving this patent.
All goodwill associated with or which becomes associated with the
Intellectual Properties is our property.
You must not directly or indirectly contest or help in contesting,
either during the term of the Franchise Agreement or following its termination,
the validity or ownership of the Intellectual Properties, or take any action
against our claimed rights.
You must use only our existing or future Intellectual Properties in
connection with the promotion and conduct of the Franchised Business, only in
accordance with our instructions, rules, and procedures.
You must cause our trademarks, service marks, trade names, logotypes,
commercial symbols, and copyrighted materials to be reproduced exactly and
accurately and, when required by us, must mark all these materials with the
appropriate symbols (i.e., (TM), (C), (R) or (sm)).
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You must not use the trademarks, service marks, trade names, logotypes,
commercial symbols, or copyrighted materials in your own corporate or other
entity name, but must take such steps approved in writing by us, to register the
name "Uno Restaurant" so as to be able to operate the Franchised Business under
the name "Uno Restaurant." With the exception of the registration of a d/b/a or
an assumed name certificate in connection with the operation of the Franchised
Business, you must not register or attempt to register our names or marks in
your own name or in the name of any other entity.
You must immediately provide us with all information you obtain about
the source and dissemination of any suspected or known libel, defamation,
infringement or threatened infringement or piracy of or challenge to the
Intellectual Properties, and you must assist and cooperate with us in taking
action, at our cost and expense, that we deem appropriate to protect the System.
Immediately upon the expiration or sooner termination of the Franchise
Agreement, you must: (i) cease and forever abstain from using any of the
Intellectual Properties; (ii) take all actions necessary or cancel any d/b/a or
assumed name registration containing any of the Intellectual Properties; and
(iii) furnish us with satisfactory evidence of compliance with these obligations
within 30 days after the expiration or sooner termination.
All materials loaned or otherwise made available to you by us must be
kept confidential by you and remain our property. You must not disclose,
exhibit, or reproduce any confidential element of the System, except to your
employees to whom disclosure must be made to enable you to operate the
Franchised Business and certain other persons identified in the Franchise
Agreement. After expiration or termination of the Franchise Agreement, neither
you nor your officers, directors, shareholders, employees, trustees,
beneficiaries, principals, or joint venturers may disclose, exhibit, or
reproduce any confidential information or trade secrets. If we request, you must
cause your employees and such other persons identified in the Franchise
Agreement, as may be appropriate, to execute proprietary information agreements.
If, at any time, in our reasonable judgment, we require you to notify
or discontinue the use of any mark or any of the Intellectual Properties, and/or
use one or more additional or substitute trademarks, service marks, or logos,
you must comply, at your expense, with our directions to modify or otherwise
discontinue the use of these marks, and/or to use one or more additional or
substitute marks after reasonable notice.
Confidential Manuals
We will loan to you a copy of the Pizzeria Uno Recipe Manual, the Bar
Manual, the Host Manual, the Server Manual, the Dish and Kitchen Maintenance
Manual, the Prep Manual, the Cook's Manual, the Manager In Training Manual, the
Quality Assurance Manual, the HazMat Manual, the Facilities Management Manual,
and the Confidential Operating Manual, also known as the Management Operations
Manual, (together, known as the "Manuals"). The Manuals are our sole property.
You must return the Manuals to us immediately at the expiration or sooner
termination of the Franchise Agreement.
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You must treat the contents of the Manuals as confidential at all
times, and must never reproduce the Manuals, or otherwise make them available to
any person, other than your employees to whom disclosure is necessary to enable
you to operate the Franchised Business, and you must not permit any prohibited
act from being done by another.
We may revise the Manuals to reflect the changing needs of customers,
employees, governmental entities or other pertinent people or entities. The
periodic revisions may include changes to advertising and promotions,
Intellectual Properties, equipment and supplies, employee uniforms, internal and
external design and layout of the outlet, accounting and reporting systems and
forms, insurance requirements, operating procedures and menu changes.
ITEM 15
OBLIGATIONS TO PARTICIPATE IN THE
ACTUAL OPERATION OF THE FRANCHISE BUSINESS
Franchise Agreement
You or an individual(s) you designate (the "Control Person") must have
direct responsibility for all operations of the Franchised Business on a
day-to-day basis. Each Control Person must be a supervisor who is not a single
unit manager and must be approved by us. If you have, in our sole judgment,
insufficient Uno or other food service experience, then, at our request, you
must designate, as Control Person, a person having such experience. Any change
in the Control Person(s) will be subject to our approval. You or the Control
Person(s) must attend and complete the courses, programs, and seminars at
locations as we require, from time to time. The Control Person(s) is not
required to have an equity interest in corporate or partnership franchisees.
The Control Person(s) may be required to sign an agreement which
prohibits him/her from disclosing, exhibiting, or reproducing any confidential
element of the System.
Development Agreement
The Development Agreement does not require you to participate
personally in the direct operation of your business or to hire a manager or
Control Person, however, the Franchise Agreement, which must be signed in
accordance with the Development Agreement, imposes the obligations described
above. We recommend that you personally participate in the operation of your
business.
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ITEM 16
RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL
No product, except Approved Products, may be prepared, offered for
sale, or sold at or from the Franchised Business. The Approved Products consist
of Required Products and Optional Products. Required Products are the initial
products required to be sold and other products (as periodically dictated by us
in writing) incorporated into the System in accordance with the Franchise
Agreement. Optional Products are products which are authorized for sale under
trademarks, but are not required to be sold. As we introduce additional Optional
Products, we will give notice of the time and manner of introduction. You must
seek our written approval for additional Optional Products. If we approve in
writing, at our sole discretion and upon review of your specifications, you may
also sell at the Franchised Business high quality food items for which we do not
presently have specifications.
All Approved Products offered for sale at the Franchised Business must
be prepared at the Franchised Business for sale to customers at the Franchised
Business, except that beverages or "side items," as authorized by us, may be
prepared elsewhere, but any authorization will be subject to our change or
termination. Each additional Required Product introduced into the Franchised
Business must be offered for sale on a continuing basis at the Franchised
Business at the time and in the manner we require.
When an Optional Product is sold in the United States by 90% of all
full-service Uno restaurants operated by us, or one-half of the full-service
restaurants operating under the System, then, on advance notice of at least
three months, we may specify the Optional Product as a Required Product. The
Optional Product will not be deemed a Required Product if you demonstrate to our
reasonable satisfaction that (1) a substantial capital improvement is required
that would result in a material hardship to you, and (2) a material reduction in
sales or profitability would result.
Required Products include alcoholic beverages, including beer, wine and
liquors. You must be authorized legally to sell alcoholic beverages at all times
permitted by law that the Franchised Business is open for business. You must
obtain and maintain, in full force and effect, all permits, licenses, and
authorizations necessary for the sale of alcoholic beverages which are, from
time to time, in the Required Products for consumption at the Franchised
Business.
Except as described in Item 12, above, and to the extent prohibited by
applicable law, you are not limited in the customers to whom you may sell goods
and services.
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ITEM 17
RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION
===================================================================================================================================
Category Section in Agreement Summary
-------- -------------------- -------
Length of the term of the franchise Section 1(g) of the Franchise Initial period is twenty years. The Developmen
Agreement Agreement will expire at the conclusion of the
Development Schedule. (This period is
expected to range from 6 to 12 months for each
unit to be developed.)
- -----------------------------------------------------------------------------------------------------------------------------------
Renewal or extension of the term Sections 1(h) and 4 of the Franchise Maximum of three successive periods of 10
Agreement years each for the Franchise Agreement. None
for the Development Agreement.
- -----------------------------------------------------------------------------------------------------------------------------------
Requirements for you to renew or extend Section 4 of the Franchise Agreement You must be in good standing, modernize, sign
new agreement, pay a fee (as described in
Item 6) and others.
- -----------------------------------------------------------------------------------------------------------------------------------
Termination by Franchisee Section 19.1 of Franchise Agreement You must give us sixty days written notice and
must meet certain conditions under the
Franchise Agreement. You have no right to
terminate the Development Agreement.
- -----------------------------------------------------------------------------------------------------------------------------------
Termination by Franchisor without cause N/A N/A
- -----------------------------------------------------------------------------------------------------------------------------------
Termination by Franchisor with "cause" Section 19.2 and 19.3 of Franchise If you breach the Franchise Agreement or fail to
Agreement, Section D of the to comply with the Manuals; or if you fail to
Development Agreement meet the development schedule
- -----------------------------------------------------------------------------------------------------------------------------------
"Cause" defined - curable defaults Section 19.3 of Franchise Agreement, Includes breaches of Franchise Agreement and
Section D(1) of Development Agreement non-conformity with the Manuals
- -----------------------------------------------------------------------------------------------------------------------------------
"Cause" defined - defaults which cannot be Section 19.2 of Franchise Agreement Includes: failure to designate site; receiver
cured appointed for Franchised Business;
assignment for the benefit of creditors and
under-reporting of royalties by more than 2%
- -----------------------------------------------------------------------------------------------------------------------------------
Your obligations on termination/non-renewal Section 19.4 of Franchise Agreement You must pay us past due amounts, stop using
our marks, return our materials, transfer your
phone number to us and stop representing that
you are still associated with us
- -----------------------------------------------------------------------------------------------------------------------------------
Assignment of contract by Franchisor Section 20.6 of Franchise Agreement We have the right to transfer and assign
- -----------------------------------------------------------------------------------------------------------------------------------
"Transfer" by Franchisee - defined Section 20 of Franchise Agreement Includes transfer, assignment, pledge, lien and
attachment of your rights under the Franchise
Agreement, a controlling interest in your stock
or partnership rights, or all or substantially
all of the assets of the Franchised Business.
- -----------------------------------------------------------------------------------------------------------------------------------
Our approval of transfer by Franchisee Section 21.4 of Franchise Agreement Within 60 days after receipt of notice of the
proposed transfer
- -----------------------------------------------------------------------------------------------------------------------------------
Conditions for our approval of transfer Section 20 of Franchise Agreement You must be in good standing. You, as
transferor, must pay a transfer fee, sign an
agreement, execute a personal guarantee and
others
- -----------------------------------------------------------------------------------------------------------------------------------
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===================================================================================================================================
Category Section in Agreement Summary
-------- -------------------- -------
Our right of first refusal to acquire Section 21 of Franchise Agreement We have 60 days after receipt of notice of
your business proposed transfer to purchase your business
on similar terms
- -----------------------------------------------------------------------------------------------------------------------------------
Our option to purchase your business Section 21 of Franchise Agreement We have the right to purchase your business
following termination
- -----------------------------------------------------------------------------------------------------------------------------------
Death or disability of Franchisee Section 20.4 of Franchise Agreement Rights under the Franchise Agreement may pass
to your next of kin or heir with an approved
application, submitted within 120 days of your
death
- -----------------------------------------------------------------------------------------------------------------------------------
Non-competition covenants during the term Section 18 of Franchise Agreement You must not be associated with a competing
of the franchise business located within 3 miles of restaurants
or facilities operating under the System
- -----------------------------------------------------------------------------------------------------------------------------------
Non-competition covenants after the Section 18.1 of Franchise Agreement Applicable for 2 years after termination
franchise is terminated or expires
- -----------------------------------------------------------------------------------------------------------------------------------
Modification of the agreement Sections 12.3 and 24.5 of Franchise We may change the Operating Manual
Agreement, Section G(5) of
Development Agreement
- -----------------------------------------------------------------------------------------------------------------------------------
Integration/merger clause Section 24.5 of Franchise Agreement, Only the terms of the Franchise Agreement and
Section G(5)of Development Agreement Development Agreement are binding
- -----------------------------------------------------------------------------------------------------------------------------------
Dispute resolution by arbitration or Section 24.8 of Franchise Agreement The parties may agree to arbitration in a
mediation mutually acceptable location
- -----------------------------------------------------------------------------------------------------------------------------------
Choice of forum Section 24.7 of Franchise Agreement, Non-exclusive jurisdiction in Suffolk County,
Section G(6) of Development Agreement Massachusetts
(See Uniform UFOC Addendum and State
Amendments to these Agreements)
- -----------------------------------------------------------------------------------------------------------------------------------
Choice of law Section 24.7 of Franchise Agreement, State of Massachusetts and any applicable
Section G(6) of Development Agreement federal and state franchise laws
federal and state franchise laws (See
Uniform UFOC Addendum and State
Amendments to these Agreements)
===================================================================================================================================
ITEM 18
PUBLIC FIGURES
We do not use any public figure to promote our franchise.
ITEM 19
EARNINGS CLAIMS
Except as described below, no representations or statements of actual,
average, projected, or forecasted sales, profits, or earnings are made to
franchisees or developers. We do not furnish or
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authorize our salespersons to furnish any oral or written information concerning
the actual, average, projected, forecasted, or potential sales, costs, income or
profits of your business.
We specifically instruct our sales personnel, agents, employees, and
officers that they are not permitted to make such claims or statements as to the
earnings, sales or profits, or prospects or chances of success, nor are they
authorized to represent or estimate dollar figures as to a franchisee's or
developer's operation. We will not be bound by allegations of any unauthorized
representations as to earnings, sales, profits, or prospects or chances for
success.
Actual results vary from franchise to franchise, and we cannot estimate
the results of a particular franchise. We recommend that prospective franchisees
and developers make their own independent investigation to determine whether or
not the franchise may be profitable, and consult with an attorney and other
advisors prior to executing the Franchise Agreement or the Development
Agreement.
ANALYSIS OF AVERAGE SALES AND EXPENSES
FOR FRANCHISOR-OPERATED FULL-SERVICE UNO RESTAURANTS
Bases and Assumptions
The sales information which follows was aggregated from affiliate-owned
and franchised restaurants open for the entire fiscal year ended October 1,
1995. The expense information which follows was aggregated from affiliate-owned
restaurants only, since expense data is not available for franchised
restaurants. The Table included in the analysis contains the number and
percentage of affiliate-owned Uno restaurants which, during the period October
2, 1994 to October 1, 1995 reported annual gross sales within the following
ranges: under $1,400,000; $1,401,000 to $1,700,000; $1,701,000 to $2,000,000;
and over $2,000,000. This analysis was constructed using the arithmetic mean
(average) annual sales and expenses of all 62 restaurants that were open and
operated by us during the entire aforementioned period. However, certain charges
which you will be required to pay to us under the Franchise Agreement (See Items
5 and 6) and other differences in the expenses of a franchised Uno restaurant
are included in the table, as noted below.
The affiliate-owned restaurants used in this analysis are substantially
similar to the franchised Uno restaurants. However, the amount of sales and
expenses incurred will vary from restaurant to restaurant. In particular, the
sales and expenses of your Uno restaurant will be directly affected by factors
which include the restaurant's geographic location; competition in the market;
presence of other Uno restaurants; the quality of both management and service at
the restaurant; contractual relationships with lessors and vendors; the extent
to which you finance the operation of a restaurant; your legal, accounting and
other professional fees; federal, state and local income taxes, gross profits
taxes or other taxes; cost of any automobile used in the business; other
discretionary expenditures; accounting methods used and certain benefits and
economics of scale which we may derive as a result of operating Uno restaurants
on a consolidated basis. A NEW FRANCHISEE'S INDIVIDUAL FINANCIAL RESULTS ARE
LIKELY TO DIFFER FROM THE RESULTS DESCRIBED BELOW.
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As of the 1995 fiscal year end, the average time in operation of the
affiliate-owned restaurants included in this analysis is 6.9 years. The
restaurants included in this analysis are located in the following states:
Number of Restaurants
---------------------
Connecticut 4
Florida 1
Illinois 2
Maine 1
Maryland 3
Massachusetts 20
Missouri 1
New Hampshire 3
New Jersey 1
New York 16
Ohio 1
Pennsylvania 1
Rhode Island 1
Virginia 5
Washington, D.C. 2
--
Total 62
Statement of Average Sales (in thousands)
for all Full-Service Restaurants for
the Fiscal Year ended October 1, 1995
(1) (2) (3) (4)
1) Annual Sales Range Under $1,400 $1,401-$1,700 $1,701-$2,000 Over $2,001
2) Number of Restaurants within the 11/17.7% 14/22.6% 13/21% 24/38.7%
range/% of total affiliate-owned
restaurants within the range
3) Number of franchised restaurants 17/33.3% 17/33.3% 8/15.7% 9/17.7%
within the range/% of total franchised
restaurants within the range
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Uno Restaurant Corporation
Statement of Average Sales and Expenses
of Affiliate-Owned Full Service
Pizzeria Uno Restaurants for the Fiscal Year Ended October 1, 1995
- -----------------------------------------------------------------------------------------------------------------------------------
Profit & Loss
Period 12 ended 10-01-95
Consolidated Earnings Claims Disclosure
Pro Forma Per Store Estimates
- -----------------------------------------------------------------------------------------------------------------------------------
($s in Thousands)
Gross Sales Level Under $1,400 $1,401 to $1,700 $1,701 to $2,000 $2,001 and Up
- -----------------------------------------------------------------------------------------------------------------------------------
$ % $ % $ % $ %
SALES
(1) Net Sales 1,163.5 100.0 1,484.7 100.0 1,819.4 100.0 2,543.5 100.0
(2) TOTAL COST OF SALES 301.6 25.9 385.3 26.0 455.3 25.0 626.9 24.6
(Food and Beverage Costs)
LABOR
(3) Direct Labor 239.7 20.6 290.8 19.6 334.2 18.3 453.7 17.8
(4) Management Salary 98.2 8.4 106.0 7.1 115.6 6.3 136.7 5.4
(5) Payroll Taxes & Benefits 78.2 6.7 91.7 6.2 105.3 6.0 138.8 5.5
- -----------------------------------------------------------------------------------------------------------------------------------
Total Labor 416.1 35.8 488.5 32.9 555.1 30.6 729.2 28.7
GROSS PROFIT 445.8 38.3 610.9 41.1 809.0 44.4 1,187.4 46.7
CONTROLLABLES
(6) Paper Goods 16.1 1.3 18.9 1.3 23.1 1.3 32.9 1.3
(7) Smallwares 8.2 .7 11.1 .7 12.0 .7 19.6 .8
(8) Other Controllables 25.9 2.2 29.5 2.0 31.5 1.7 41.1 1.6
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL CONTROLLABLES 50.2 4.3 59.5 4.0 66.6 3.7 93.6 3.7
INCOME AFTER 395.6 34.0 551.4 37.1 742.4 40.8 1,093.8 43.0
CONTROLLABLES
OTHER EXPENSES
(9) Advertising & Business Co-op 34.9 3.0 44.5 3.0 54.6 3.0 76.3 3.0
(10) Royalties 58.2 5.0 74.2 5.0 91.0 5.0 127.2 5.0
(11) Legal and Accounting 5.0 .4 5.0 .4 5.0 .3 5.0 .2
(12) Repairs & Maintenance 36.8 3.2 40.9 2.7 45.9 2.5 54.0 2.1
(13) Utilities 53.3 4.6 64.8 4.4 66.7 3.7 67.6 2.6
(14) Other Noncontrollables 19.6 1.7 31.3 2.1 27.0 1.5 30.6 1.2
(15) Occ Costs excl Rent & Taxes 27.1 2.3 29.7 2.0 33.0 1.8 40.4 1.6
- -----------------------------------------------------------------------------------------------------------------------------------
Total Other Expenses 234.9 20.2 290.4 19.6 323.2 17.8 401.1 15.8
(16) Earnings before rent, depr 160.7 13.8 261.0 17.5 419.2 23.0 692.7 27.2
and interest
- -----------------------------------------------------------------------------------------------------------------------------------
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Each of the 62 affiliate-owned Uno restaurants utilized a uniform accounting
system and the data pertaining to such restaurants was prepared on a basis
consistent with generally accepted accounting principles during the covered
period. The information contained in this analysis has generally not been
audited. The following notes should assist in interpretation of the foregoing
table of results.
1. Net Sales (Line 1). The net sales are based on the average volume of
the restaurants that fall into each revenue range.
2. Total Cost of Sales (Line 2). You will have the opportunity to take
advantage of volume discounts on particular items negotiated by us;
however, availability of such volume discounts is generally limited to
geographic areas in which our affiliates currently operate Uno
restaurants. The cost of items such as produce, which are often
purchased locally, may vary according to the location of the
restaurant. Additionally, freight and shipping costs and the amount of
mark-up imposed by suppliers will also vary.
3. Direct Labor (line 3). Labor for a full-service restaurant generally
necessitates a range of 40-80 employees, including both full-time and
part-time workers.
4. Management Salary (line 4). This category assumes one designated
general manager, 1 manager and 1 assistant manager and includes an
amount for bonuses.
5. Payroll Taxes and Benefits (line 5). This category includes amounts for
worker's compensation, group insurance expenses, payroll taxes, and
vacation pay. The amounts stated reflect administrative costs incurred
by Uno restaurants and exclude all other general and administrative
costs incurred for payroll matters which are handled by our corporate
or regional office. The costs of labor and related payroll expenses may
vary substantially depending on the geographic location of the
restaurant.
6. Other Controllables (line 8). Other controllable expenses include the
following costs: janitorial service; office supplies; entertainment;
laundry; telephone; cash shortages; and miscellaneous.
7. Advertising and Business Coop (line 9). These expenses represent the
advertising and business coop contributions you are required to pay to
us as described in Item 6. Specifically, you are required to pay a
monthly fee of up to one percent (1.0%) of Gross Revenues, for business
coop services. This fee includes your share of costs that are incurred
by us for the benefit of the System. Article 8 of the Franchise
Agreement further details and explains this expense. You are also
required to expend a minimum of two percent (2.0%) of Gross Revenues on
local marketing as described in Item 6. We have not accounted for the
impact of a Systemwide Media Fund Fee of up to one percent (1.0%) of
Gross Revenues, because the fee has never yet been actually
implemented.
8. Royalties (line 10). You will be required to pay a continuing license
fee of five percent (5.0%) of Gross Revenues as described in Item 6.
9. Other Non-Controllables (line 14). This category of expenses includes
amounts for bank processing charges, dues, licenses, subscriptions,
menus, guest checks, and recruitment.
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10. Occupancy Costs excluding Rent and Taxes (line 15). This category
includes insurance, security, trash services, and extermination. We may
have derived a benefit in the form of lower premiums for insurance
based upon the number of Uno restaurants owned by our affiliates and
our loss control programs. You should inquire about the cost of
insurance, which may vary substantially depending on the geographic
location of its restaurant.
11. Other Information. We are also presenting in the following paragraphs a
comparison of certain financial information received from our
franchisees along with the average financial results of the 53
affiliate-owned Uno restaurants. However, while we suggest that our
franchisees utilize a uniform accounting system in reporting, which is
consistent with generally accepted accounting principles, it should be
expressly noted that we cannot attest to (i) the accuracy of the
information received from our franchisees or (ii) whether such
information was actually prepared in accordance with generally accepted
accounting principles.
The numbers and percents indicated in the first table in lines (2) and
(3) relate to the 62 affiliate- owned restaurants and 51 franchised restaurants
open during all of fiscal year 1995 (October 2, 1994 to October 1, 1995). In
addition, the average annual sales volume for all affiliate-owned restaurants as
described above was $1,935,029. This sales volume was attained or surpassed by
23 (or 37.0%) of the affiliate-owned restaurants and 11 (or 21.5%) of the
franchised restaurants.
The highest annual sales volume of an affiliate-owned restaurant was
$3,399,732.00. The lowest annual sales volume of an affiliate-owned restaurant
was $1,190,459.00. The highest annual sales volume of a franchised restaurant
was $3,497,617.00. The lowest annual sales volume of a franchised restaurant was
$800,768.00.
Substantiation of the data used in preparing the earnings claim
described above will be made available to you on reasonable request.
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ITEM 20
FRANCHISED OUTLETS
FRANCHISED FULL SERVICE
STORE STATUS SUMMARY
FOR FISCAL YEARS 1995/1994/1993
Total From Franchised
the 5 Uno
Closed, Reacquired by us Left the immediate Restaurants
Sold/Not Canceled or Not or our affiliates System Left Columns Operating at
STATE Open F'95 Opened Transfers Terminated Renewed Other Year End
----- --------- ------ --------- ----------- ------- ----------------- -------- ------------ ------------
Arizona 0/1/0 1/0/0 0/0/0 1/0/0 2/2/1
California 0/1/0 9/9/8
Connecticut 0/0/1 0/0/1 0/3/0 0/3/1 0/0/3
District of 1/1/1
Columbia
Florida 0/1/0 1/0/0 1/0/0 4/5/4
Hawaii 1/0/0 1/0/0 0/1/1
Illinois 1/1/1
Indiana 0/1/0 2/2/1
Kentucky 1/1/1
Maryland 1/1/1
Massachusetts 3/3/3
Michigan 2/2/2
Minnesota 2/2/2
Nevada 1/1/1
New Jersey 4/4/4
New York 0/0/1 1/0/0 2/1/0 3/1/0 2/4/5
Ohio 2/0/0 0/1/0 0/1/0 0/2/0 6/4/5
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Oklahoma 1/1/1
Pennsylvania 1/0/1 6/5/5
Texas 0/0/1 1/0/0 1/0/1 4/5/5
Wisconsin 1/0/0 4/3/3
----- ----- ----- ----- ----- ----- ----- ----- --------
SUBTOTALS 4/4/3 2/0/1 5/2/1 0/4/0 7/6/2 56/57/58
San Juan, PR 1/0/0 2/1/1
Toronto, Ont. 1/1/1
TOTAL 5/4/3 2/0/1 5/2/1 0/4/0 7/6/2 59/59/60
===== ===== ===== ===== ===== ===== ===== ===== ========
Note: The numbers in the "Total" column may exceed the number of restaurants
affected because several events may have affected the same restaurant.
For example, the same restaurant may have had multiple owners.
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AFFILIATE-OWNED FULL SERVICE AND TAKERY STORES STATUS SUMMARY
FOR YEARS 1995/1994/1993
Stores Closed Stores Opened Total Stores
STATE During Year During Year Operating at Year End
----- ------------- ------------- ---------------------
Colorado 2/0/0 2/0/0
Connecticut 1/3/0 5/4/1
District of Columbia 0/0/1 2/2/2
Florida 3/0/1 4/1/1
Illinois 1/0/0 2/0/0 4/3/3
Maine 1/1/1
Maryland 1/1/0 5/4/3
Massachusetts 4/1/4 25/21/18
Missouri 0/0/1 1/1/1
New Hampshire 0/1/0 3/3/2
New Jersey 1/1/1
New York 0/1/0 2/2/2 18/16/15
Ohio 0/1/0 1/1/0
Pennsylvania 2/0/0 3/1/1
Rhode Island 1/1/1
Virginia 3/2/0 7/4/2
TOTAL 1/1/1 20/11/8 83/64/52
===== ======= ========
Note: As described in Item 1, we do not own or operate any restaurants. All
"company-owned" restaurants are owned by our affiliates. As of September 30,
1995, only five of the above-referenced "company-owned" restaurants were
Takeries.
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PROJECTED OPENINGS DURING THE ONE YEAR
PERIOD ENDING OCTOBER 1, 1996
Projected
Franchise Agreements Signed Projected Franchised Company/Affiliate
State or Territory But Restaurant Not Open New Restaurants Owned Openings
------------------ --------------------------- -------------------- -----------------
California 1 1
Indiana 1 1
Kentucky 1 1
Michigan 1 1
Minnesota 1 1
Ohio 2 2
Oregon 1 1
Pennsylvania 2 2
Puerto Rico 2 2
Wisconsin 1 1
TOTAL 13 13 12*
== == ==
* We have not yet selected the markets in which these restaurants will be
established.
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PIZZERIA UNO FRANCHISED RESTAURANTS
(As of October 2, 1995)
The restaurants identified by an asterisk ("*") are owned by persons
listed in Item 2, or members of their immediate families, by business entities
owned by them, or by others closely related to us, or our affiliates.
ARIZONA Glenn Miller*
Pizzeria Uno
The Nicpon Group 4465 Mission Boulevard
Pizzeria Uno San Diego, CA 92109
Arizona Center (619) 483-4143
455 N. 3rd St. - Suite 2154
Phoenix, AZ 85004 Glenn Miller*
(602) 253-3355 Pizzeria Uno
356 Fashion Valley
The Nicpon Group San Diego, CA 92108-1282
Pizzeria Uno (619) 298-1866
690 South Mill Avenue, Suite 101
Tempe, AZ 85284 Glenn Miller*
(602) 968-1300 Pizzeria Uno
Northridge Fashion Center
Space 129
CALIFORNIA 9301 Tampa Avenue
Northridge, CA 91324
Gunther Restaurant Group (818) 882-8667
Pizzeria Uno
19930 Stevens Creek Boulevard Herb Turetzky
Cupertino, CA 95014 Pizzeria Uno
(408) 973-1466 2200 Lombard Street
San Francisco, CA 94123
Gunther Restaurant Group (415) 563-3144
Pizzeria Uno
3720 Mowry Avenue Herb Turetzky
Fremont, CA 94538 Pizzeria Uno
(510) 794-3595 2323 Powell Street
San Francisco, CA 94133
Gunther Restaurant Group (415) 788-4055
Pizzeria Uno
2570 El Camino Real Herb Turetzky
Santa Clara, CA 94538 Pizzeria Uno
(408) 241-5152 Podium Level
Two Embarcadero Center
San Francisco, CA 94111
(415) 397-8667
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CANADA INDIANA
John/Leone Schram Bob Woodburn/Earl Richter
Pizzeria Uno Pizzeria Uno
73A Front Street, East 2385 Southlake Mall
Toronto, Ontario Merrillville, IN 46410
Canada, M5E1B8 (219) 736-4885
(416) 866-7473
Bob Woodburn/Earl Richter
Pizzeria Uno
FLORIDA Clearwater Crossing
3716 East 82nd Street
Ergo Gonzales/Tom Williams Indianapolis, IN 46240
Pizzeria Uno (317) 594-4865
8202 Mills Drive
Miami, FL 33183
(305) 274-2424 KENTUCKY
Grayborn Buena Vista, Inc. Jim & Tita Arnold
Pizzeria Uno Pizzeria Uno
55 W. Church Street, Suite 248 2547 Richmond Road
Orlando, FL 32801 Lexington, KY 40509
(407) 839-1800 (606) 266-8667
Grayborn Buena Vista, Inc.
Pizzeria Uno MARYLAND
303 E. Altamonte Drive, Suite 1350
Altamonte Springs, FL 32701 Arrowhead, Inc./Greig Johnson
(407) 339-3300 Pizzeria Uno
Route 4, Box 5241
Grayborn Buena Vista, Inc. Oakland, MD 21550
Pizzeria Uno (301) 387-4866
Crossroads Shopping Center
12553 State Road, #535
Orlando, FL 32819 MASSACHUSETTS
(407) 827-1212
Steven Hurwitz
Mike Hurwitz
ILLINOIS Stuart Hurwitz
Pizzeria Uno
Debbie & Karim Abdel-Haq 150 Bridge Street, Columbus Center
Pizzeria Uno Springfield, MA 01103
1903 Convenience Place (413) 733-1300
(No. 1-74 at Neil Street), North
Champaign, IL 61820
(217) 398-4242
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56
Steven Hurwitz NEVADA
Mike Hurwitz
Stuart Hurwitz Paul Fleming*
Pizzeria Uno Jeff Offenbach
Holyoke Mall at Ingleside Pizzeria Uno
Holyoke, MA 01040 Sahara Pavilion
(413) 534-3000 2540 South Decatur Boulevard, Suite J
Las Vegas, NV 89102
Richard Bloom (702) 876-8667/8267
Pizzeria Uno
33 Main Street
Marlboro, MA 01752 NEW JERSEY
(508) 460-0637
Grill Concepts, Inc.
Pizzeria Uno
MICHIGAN 4905 Stelton Road
South Plainfield, NJ 07080
Richard Roberts (908) 561-6053
Dean Friedman
William Everal Grill Concepts, Inc.
Pizzeria Uno Pizzeria Uno
1321 South University Avenue 1854 Marlton Pike
Ann Arbor, MI 48104 Cherry Hill, NJ 08003
(313) 769-1744 (609) 424-8844
Richard Roberts Lou Viola
Dean Friedman Pizzeria Uno
William Everal 700 Plaza Drive
Pizzeria Uno Secaucus, NJ 07094
6745 Orchard Lake Road (201) 392-9090
West Bloomfield, MI 48322
(810) 737-7242 Lou Viola
Pizzeria Uno
West Belt Plaza
MINNESOTA Building #13, Rt. 23
Wayne, NJ 07470
Unoco Restaurant, Inc. (201) 256-0700
Pizzeria Uno
12649 Wayzata Boulevard, #235
Minnetonka, MN 55343 NEW YORK
(612) 544-2777
The B Group
Unoco Restaurant, Inc. Pizzeria Uno
Pizzeria Uno 842 Main Street
6740 France Avenue, South Poughkeepsie, NY 12603
Edina, MN 55435 (914) 452-4930
(612) 925-5005
-46-
57
Greg Keenan Tom DiBenedetto
Pizzeria Uno Gary Rogalski
4 Martine Avenue Pizzeria Uno
White Plains, NY 10606 5433 Mayfield Road
(914) 684-7036 Lyndhurst, OH 44124
(216) 460-1910
OHIO OKLAHOMA
Bob Williams Jim & Linda DeWinter
Pizzeria Uno (Dayton) Michael Johnstone
8361 Old Troy Pike Pizzeria Uno
Huber Heights, OH 45424 8221 E. 61st Street, South
(513) 236-2884 Tulsa, OK 74133
(918) 254-6611
Jim "Turtle" Young
Stan Silverman
Pizzeria Uno PENNSYLVANIA
P.O. Box 20243
342 Ludlow Avenue Robert Donaldson
Cincinnati, OH 45220 Pizzeria Uno
(513) 281-8667 509-511 South 2nd Street
Philadelphia, PA 19147
Jim "Turtle" Young (215) 592-0400
Stan Silverman
Pizzeria Uno Robert Donaldson
7500 Beechmont Avenue Pizzeria Uno
Cincinnati, OH 45230 826 West Dekalb Pike
(513) 231-8667 King of Prussia, PA 19406
(215) 337-4060
Tom Di Benedetto
Gary Rogalski Robert Donaldson
Pizzeria Uno Pizzeria Uno
470 Great Northern Mall 229 South 18th Street
N. Olmsted, OH 44070 Rittenhouse Square
(216) 734-1800 Philadelphia, PA 19103
(215) 790-9669
Tom Di Benedetto
Gary Rogalski Tom Bock
Pizzeria Uno U.E.I. Inc.
3750 Orange Place Pizzeria Uno
Beachwood, OH 44122 Grant Plaza II
(216) 831-0031 16-19 Grant Avenue
Philadelphia, PA 19115
(215) 677-3370
-47-
58
Tom Bock Southwest Uno's
U.E.I., Inc. Pizzeria Uno
Pizzeria Uno 300 Houston Street
198 North Bucks Town Road Sundance West
Langhorne, PA 19047 Fort Worth, TX 76102
(215) 741-6100 (817) 885-8667
Grill Concepts, Inc. Al Ciaglia
Pizzeria Uno Pizzeria Uno
1145 West Baltimore Turnpike 4002 Beltline Road, Suite 100
Media, PA 19063 Dallas, TX 75244
(215) 565-7450 (214) 991-8181
Robert N. Landauer
PUERTO RICO Pizzeria Uno
3401 Kirby Drive
Federico F. Sanchez Houston, TX 77098
Pizzeria Uno (713) 520-0040
Centro Europa
Avenue Ponce DeLeon 1492
Local #106 WASHINGTON, DC
Santurce, PR 00907
(809) 725-8667 Joseph & Ann Natoli
Potomac Restaurant Associates
Federico F. Sanchez Pizzeria Uno
Pizzeria Uno 3211 M. Street, N.W.
Galleria San Patricio Washington, DC 20007
B5 Tabonuco St. (202) 965-6333
Caparra Hills
Guaynabo, PR 00963
(809) 749-8667 WISCONSIN
Thomas Beach
TEXAS TMB Development Company
Pizzeria Uno
Southwest Uno's 222 Gorham Street
Pizzeria Uno Madison, WI 53708
Village at Six Flags (608) 255-7722
1301 N. Collins, Suite 201
Arlington, TX 76011 Thomas Beach
(817) 265-9130 TMB Development Company
Pizzeria Uno
7601 Mineral Point Road
Madison, WI 53717
(608) 833-7200
-48-
59
Thomas Beach
TMD Development Company
Pizzeria Uno
15280 West Bluemound
Elm Grove, WI 53122
(414) 821-1755
Thomas Beach
TMD Development Company
Pizzeria Uno
2701 Milton Ave.
Janesville, WI 53545
608-754-1900
The following is a listing of the name and last known home address and
telephone number of every franchisee who has had an outlet terminated, canceled,
not renewed, or otherwise voluntarily or involuntarily ceased to do business
under the franchise agreement during the most recently completed fiscal year or
who has not communicated with us within 10 weeks of the date of this Offering
Circular.
George Banta (Kingston, NY) James Leonard (Dallas, TX)
842 Main Street 2811 McKinney Ave., Suite 10
Poughkeepsie, NY 12603 Dallas, Texas 75204
(914) 452-2226
Gary Rogalski (Tampa, FL) Rick Ryan (White Plains, NY)
3750 Orange Place 4 Martine Avenue
Beachwood, OH 44122 White Plains, NY 10606
216-831-0031 (914) 948-8191
Tozo Shiota (Honolulu, HI)
2256 Kuhio Ave.
Honolulu, HI 96815
ITEM 21
FINANCIAL STATEMENTS
The separate financial statements, respectively entitled "Audited
Financial Statements, Uno Restaurant Corporation, October 1, 1995," and "Audited
Financial Statements, Pizzeria Uno Corporation, Fiscal year ended October 1,
1995," (each for the fiscal years 1993, 1994, and 1995), are attached hereto as
Attachment C.
-49-
60
ITEM 22
CONTRACTS
The following contracts are attached to this Offering Circular as
Attachment D. These are the only contracts which we will require you to enter
into:
1. Franchise Agreement (with Guarantee and exhibits)
2. Development Agreement
3. Financing Agreements
a. letter agreement
b. guarantee
c. corporate resolution
d. collateral assignment, acceptance and consent
e. promissory note (60 months)
f. promissory note (72 and 84 month)
g. interim funding promissory note
h. security agreement
i. assignment of lease
j. consent to assignment as collateral security
k. landlord disclaimer and waiver of interest
l. affidavit of identity
m. pledge agreement
n. financing statement
o. certificate of acceptance of property
-50-
61
ITEM 23
RECEIPT
THIS OFFERING CIRCULAR SUMMARIZES CERTAIN PROVISIONS OF THE FRANCHISE
AGREEMENT AND OTHER INFORMATION IN PLAIN LANGUAGE. READ THIS OFFERING
CIRCULAR AND ALL AGREEMENTS CAREFULLY.
IF WE OFFER YOU A FRANCHISE, WE MUST PROVIDE THIS OFFERING CIRCULAR TO YOU
BY THE EARLIEST OF:
(1) THE FIRST PERSONAL MEETING TO DISCUSS OUR FRANCHISE; OR
(2) TEN BUSINESS DAYS BEFORE THE SIGNING OF A BINDING AGREEMENT; OR
(3) TEN DAYS BEFORE A PAYMENT TO US.
YOU MUST ALSO RECEIVE A FRANCHISE AGREEMENT CONTAINING ALL MATERIAL TERMS
AT LEAST 5 BUSINESS DAYS BEFORE YOU SIGN A FRANCHISE AGREEMENT.
IF WE DO NOT DELIVER THIS OFFERING CIRCULAR ON TIME OR IF IT CONTAINS A
FALSE OR MISLEADING STATEMENT, OR MATERIAL OMISSION, A VIOLATION OF FEDERAL
AND STATE LAW MAY HAVE OCCURRED AND SHOULD BE REPORTED TO THE FEDERAL TRADE
COMMISSION, WASHINGTON, D.C. 20580 AND THE APPLICABLE STATE AGENCY LISTED
IN ATTACHMENT E.
I have received a Pizzeria Uno Corporation Uniform Franchise Offering
Circular dated December 22, 1995. This Offering Circular includes the
following Attachments:
A. Agents for Service of Process
B. Table of Contents for Manuals
C. Financial Statements
D. Contracts
1. Franchise Agreement (with Guarantee and exhibits)
2. Development Agreement
3. Financing Agreements
(a) letter agreement
(b) guarantee
(c) corporate resolution
(d) collateral assignment, acceptance and consent
(e) promissory note (60 months)
(f) promissory note (72 and 84 month)
(g) interim funding promissory note
(h) security agreement
(i) assignment of lease
(j) consent to assignment as collateral security
(k) landlord disclaimer and waiver of interest
(l) affidavit of identity
(m) pledge agreement
(n) financing statement
(o) certificate of acceptance of property
E. List of Administrators
- ------------------- -------------------------------------------
Date Franchisee
[RETURN THIS COPY TO US]
62
ATTACHMENT A
AGENTS FOR SERVICE OF PROCESS
CALIFORNIA MICHIGAN
Commissioner of Corporations Michigan Department of Commerce,
3700 Wilshire Blvd., 6th Floor Corporations and Securities Bureau
Los Angeles, CA 90010 670 Law Building
Lansing, Michigan 48913
HAWAII
MINNESOTA
Director,
Hawaii Department of Commerce Commissioner of Commerce
and Consumer Affairs 133 East Seventh Street
1010 Richards Street St. Paul, Minnesota 55101
Honolulu, Hawaii 96813
NEW YORK
ILLINOIS
Secretary of State of
Illinois Attorney General the State of New York
500 South Second Street 162 Washington Avenue
Springfield, Illinois 62706 Albany, New York 12231
INDIANA NORTH DAKOTA
Indiana Secretary of State Securities Commissioner
302 West Washington, Room E-111 State of North Dakota
Indianapolis, Indiana 46204 600 East Boulevard, Fifth Floor
Bismarck, North Dakota 58505
MARYLAND
RHODE ISLAND
Maryland Securities Commissioner
Office of the Attorney General Director of Department
200 St. Paul Place of Business Regulation
20th Floor Suite 232
Baltimore, Maryland 21202-2020 233 Richmond Street
Providence, Rhode Island 02903-4232
ATTACHMENT A - 1
63
SOUTH DAKOTA
Director of Division of Securities
c/o 118 West Capital Avenue
Pierre, South Dakota 57501-2017
VIRGINIA
Clerk of the State
Corporation Commission
1300 East Main Street, 9th Floor
Richmond, Virginia 23219
WASHINGTON
Director of Financial Institutions
Securities Division
210 - 11th Street SW
3rd Floor West
Olympia, Washington 98504
WISCONSIN
Commissioner of Securities
Fourth Floor
111 East Wilson Street
Madison, Wisconsin 53702
ATTACHMENT A - 2
64
ATTACHMENT B
Pizzeria Uno Manuals Pertinent to Restaurant Operations Min Total Pages
1. Management Operations Manual 127
2. Recipe Manual 400
3. Bar Manual 59
4. Host Manual 45
5. Server Manual 44
6. Dish and Kitchen Manual 31
7. Prep Manual 67
8. Cook's Manual 74
9. Manager in Training Manual 136
10. Quality Assurance Manual 16
11. HazMat Manual 10
12. Facilities Management Manual 83
65
MANAGEMENT OPERATIONS MANUAL
PIZZERIA UNO MANAGEMENT OPERATIONS MANUAL
TABLE OF CONTENTS
1. INTRODUCTION 5
About the manual 5
The History of Uno's 5
Uno Restaurant Corporation 5
Directory of Company Restaurants 6
Directory of Franchise Restaurants 8
2. THE UNO MANAGER 10
Mission Statement 10
Core Values 10
Restaurant Management Organizational Structure 11
Personal Appearance 12
Conduct Guidelines 13
Personal Conduct 13
Attendance at Employee Functions 14
Personal finances 14
Performance Reviews 15
Manager Responsibilities 17
Execution of Lunch 21
Store Meetings 22
Expense Reports 22
Subscription and Dues 25
Uno and the Community 26
Talking to the Media 27
Handling Mail 27
Marks and Graphic Standards 28
Soliciting 32
Gifts, Gratuities and Conflicts of Interest 33
3. MANAGEMENT BENEFITS 35
Employee Assistance Program 35
Leaves of Absence 37
Bereavement 40
Jury Duty 40
Pension Plans 40
ESOP 40
401K 40
Vacation 41
Holidays 41
Service Pins 42
Tuition Reimbursement 42
Relocation 42
1
66
MANAGEMENT OPERATIONS MANUAL
4. THE MANAGER AND THE GUEST 44
Standard Restaurant Hours 44
Guest Comments and Complaints 44
Guest Dress Code 45
Smooth Operation in the Dining Room 45
Smooth Operation at the Bar 46
Advanced Seating 46
The Waiting List 48
Staging Guests 49
Advanced Ordering 49
Complimentary Meals 50
Walk-outs 50
Customers who can't pay 50
Guest Ejection Guidelines 51
Lost and Found 51
Dry Cleaning 52
Break-in of Guest Automobiles 52
5. GUIDELINES FOR RESTAURANT EMPLOYEES 53
Employee Appearance 53
Standards of Dress 53
Introduction to Front of House Positions 54
Front of House Positions 54
Introduction to Back of House Positions 55
Back of House Positions 55
Staffing and Scheduling 57
Attendance 57
Absences 58
Sickness 58
Breaks 58
Employee Parking 58
Personal Phone Calls 59
Visitors 59
Employee Purchases 59
6. HIRING PRACTICES 60
Employee Turnover 60
Placing the Help Wanted Ads 60
Management Applicants 60
Applicants for Hourly Positions 61
Employment of Minors 61
EEO Policy 62
The Interview 63
Rehires 63
Processing New Employees 64
TJTC 66
1-9 Form 66
Introducing the New Employee to the Job 68
Training the New Employee 68
Responsible Alcohol Service Program 73
2
67
MANAGEMENT OPERATIONS MANUAL
7. HOURLY EMPLOYEE BENEFITS 74
Leaves of Absence 75
Vacation 76
Holidays 76
Bereavement 77
Meals 77
8. EMPLOYEE RELATIONS 78
Labor Laws 78
Sexual Harassment 79
Labor Relations Guidelines 80
Handling Employee Complaints 81
Polygraph Examinations 82
Salary Garnishments 82
9. MANAGEMENT ADMINISTRATIVE SYSTEM 83
Planning 83
Controlling 85
Organizing 87
10. PAYROLL 88
The Payroll Department 88
Paychecks 88
Paycheck Distribution 89
Paycheck Problem Solving 90
Declaring Tips 92
Tipped Employee Paychecks 94
Requests for Employment & Wage Data 95
Managers-in-Training 96
Unemployment Compensation 96
11. ACCOUNTING 99
Invoice Procedure 99
Statements and Credits 99
Alcoholic Beverages 100
Advertising 100
Daily Sales Report 101
Register Funds 101
Petty Cash 102
Bank Deposits 102
Credit Cards 103
Personal Checks 105
Travelers Checks 106
Gift Certificates 106
3
68
MANAGEMENT OPERATIONS MANUAL
12. PURCHASING AND INVENTORY 108
Purchasing Guidelines 108
Receiving Requirements 108
Produce 108
Produce Specifications 109
Liquor 109
Smallwares 109
Returns and Shortages 109
Health Department Inspections 110
Product Recall 110
Suspect Foodborne Illness Procedures 110
Inventory Control 111
13. RESTAURANT MAINTENANCE 113
Facilities Department 113
Preventive Maintenance 113
Contract Maintenance 115
14. FOOD HANDLING 117
Introduction 117
Types of Food Contamination 117
Five Fundamentals of Safe Food Service 118
Receiving and Storage 119
Proper Rotation 120
Equipment Sanitation 120
Preparation for Exterminators 121
15. SAFETY, SECURITY AND EMERGENCY 122
Safety 122
Security 122
Emergency 124
INDEX 127
4
69
RECIPE MANUAL OCT. 12, 1995
1 PAGE OF THE RECIPE MANUAL IS INDEX
DEVOTED TO EACH RECIPE.
CATEGORY CODE
-------- ----
LUNCH SPECIALS
PASTA OF THE DAY 940-03A
PRIORITY CHICAGO CLASSIC 940-05
PRIORITY LIGHT LUNCH - THINZETTA 940-07
PRIORITY LIGHT LUNCH 940-02
PRIORITY LUNCH 940-01A
SOUP & SALAD 940-06
TODAY'S SANDWICH 940-04A
APPETIZERS
BACON CHEDDAR FRIES 941-15A
BUFFALO WINGS - FRY 941-01D
BUFFALO WINGS - JUMBO - FRY 941-02D
BUFFALO WINGS - JUMBO - OVEN 941-02*
BUFFALO WINGS - OVEN 941-01*
CHEESE STICKS 941-03C
CHICKEN THUMBS 941-04C
CHIPS & DIP 941-05
GARLIC BREAD/CHEESE BREAD 941-07C
MUCHOS NACHOS 941-08C
ONION RINGS 941-17
PIZZA SKINS 941-09D
QUESADILLA 941-14B
SAMPLER PLATTER 941-18
SPINACH & ARTICHOKE DIP 941-13A
TUSCANY BREAD 941-11B
VEGGIE DIP PLATTER 941-16
SOUPS\SALADS
ANTIPASTO 942-01A
BBQ CHICKEN SALAD 942-17
CAESAR 942-02B
CHEESE & MINESTRONE 942-12A
CHICAGO CHICKEN SALAD 942-10
CHICKEN CAESAR 942-03D
CHICKEN FAJITA SALAD 942-16
CREAM OF BROCCOLI 942-11A
GREEK 942-04C
GRILLED CHICKEN 942-05D
HOUSE/PRIORITY 942-06C
NEW ENGLAND CLAM CHOWDER 942-14A
SOMETIMES SOUP 942-20
SPINACH & TORTELLINI 942-09B
SPINACH SALAD 942-08
TOMATO GARDEN VEGETABLE SOUP 942-19
UNO LOW FAT PASTA SALAD 942-15A
WINDY CITY CHILI 942-13
70
RECIPE MANUAL OCT. 12, 1995
CATEGORY CODE
-------- ----
DEEP DISH PIZZAS
BACON LETTUCE AND TOMATO PIZZA 943-22
BIANCO 943-01B
CHEESE & TOMATO 943-03A
CHEESE PREBAKE 943-02A
CHICAGO CLASSIC 943-05A
CHICKEN FAJITA 943-09
CHICKEN SPINOCCOLI 943-25
EGGPLANT ARTICHOKE 943-08
FOUR CHEESE PIZZA 943-10A
FROZEN PIZZA 943-11A
HAND CUT PEPPERONI CLASSIC 943-23A
NUMERO UNO 943-12A
PRIMA PEPPERONI 943-13A
PRIORITY LUNCH 943-14A
ROASTED RED PEPPER & CHICKEN 943-26
SAUSAGE PREBAKE 943-16A
SEA DELICO 943-17A
SHROOM PIZZA 943-18A
SPINOCCOLI 943-19A
TACO PIZZA 943-20
TOPPINGS 943-04C
VEGGIE 943-21A
WHITE PIZZA 943-24
SPECIALTIES/PASTA
BABY BACK RIBS 944-01D
BAKED CHICKEN SPINNOCOLLI 944-31B
BROCCOLI & CHICKEN FETTUCCINE 944-02C
CHICAGO RIBEYE STEAK (12 oz.) 944-04B
CHICKEN AND MUSHROOM MARSALA 944-36
CHICKEN FAJITA (OVEN) 944-22A
CHICKEN FAJITA 944-21E
CHICKEN FROMMAGGI 944-03D
FARM STAND CHICKEN 944-05C
FETTUCCINE ALFREDO 944-06A
FULL RACK RIBS 944-14A
GRILLED CHICKEN BREAST 944-39
GRILLED CHICKEN/GRILLED VEGETABLES(PASTA) 944-11D
GRILLED ONIONS 944-28
GRILLED TUNA STEAK 944-16
GRILLED VEGETABLE PRIMAVERA 944-35
LASAGNA MAMIA 944-07B
LOW FAT CHICKEN FAJITA 944-38
PENNE WITH MEATBALLS 944-26A
PENNE WITH MEATSAUCE 944-25
PENNE WITH SAUSAGE AND PEPPERS 944-27
PICK-A-PASTA 944-37
RIBS & WINGS 944-08F
SAUTEED VEGETABLES 944-09B
SHRIMP PRIMAVERA 944-10A
SIRLOIN TIPS 944-12C
STEAK & PASTA 944-23C
TOMATO BASIL MARINARA PASTA 944-33
TOP SIRLOIN STEAK 944-32A
TRI-COLORED TORTELLINI 944-15B
UNO SAUSAGE AND ZITI 944-34
2
71
RECIPE MANUAL OCT. 12, 1995
CATEGORY CODE:
-------- -----
SPECIALTIES CONT.
VEGETABLE & PASTA STIR FRY 944-18NS
VEGETABLE FETTUCCINI 944-24C
WILD MUSHROOM RAVIOLI 944-17A
WINGS AND THUMBS 944-40
ZITI WITH MARINARA 944-29
ZlTI WITH MEAT SAUCE 944-13A
ZITI WITH MEATBALLS 944-19
ZITI WITH PESTO CREME 944-30
ZITI WITH SAUSAGE AND PEPPERS 944-20A
KID'S MEALS
BRUNO'S PASTA 945-11A
CHILD'S MACARONI AND CHEESE 945-06
CHILD'S MACARONI AND CHEESE PIZZA 945-07
CHILD'S SPAGHETTI 945-08
CHILDREN'S TORTELLINIS 945-04A
CHIX & STIX 945-01C
CHILDREN'S PASTA AND PASTA SIDE ORDER 945-02B
KID'S BEVERAGES 945-12
KID'S MUG OF ICE CREAM 945-09A
PIZZA-CHEESE 945-05C
PIZZA-PEPPERONI 945-10B
TATERS & FRATERS 945-03B
SANDWICHES
BBQ BEEF SANDWICH (NON-SAUTE) 946-19
BBQ BEEF SANDWICH 946-08B
BUFFALO CHICKEN SANDWICH 946-22
CHICAGO CHICKEN SALAD SANDWICH 946-17
CRUNCHY VEGGIE CALZONE 946-18A
DELUXE CHICKEN BREAST 946-02E
FRENCH FRIES 946-13A
GRILLED CHICKEN BREAST SANDWICH 946-25
GRILLED EGGPLANT BURGER 946-21A
HAM AND CHEESE 946-14
HAMBURGER TOPPINGS 946-10C
HOT CHICKEN FAJITA SANDWICH 946-16
HOT ITALIAN SUB 946-15
JUMBO HOT DOG 946-03
MEATBALL SUB 946-05
OPEN FACED STEAK 946-04A
ROASTED RED PEPPER AND CHICKEN SANDWICH 946-23
ROLL TOASTING PROCEDURE 946-09C
SAUSAGE, PEPPER, AND ONION 946-06
STEAK N' CHEESE 946-01C
STOCKYARD BURGER 946-11B
STOCKARD BURGER(OVEN) 946-12A
TURKEY CLUB 946-07C
TURKEY SUPREME 946-20
VEGGIE BURGER 946-24
3
72
RECIPE MANUAL OCT. 12, 1995
CATEGORY CODE
-------- ----
DESSERTS
ALL AMERICAN 947-01A
BROWNIE BOWL 947-02B
BROWNIE HANDLING 947-03
CAPPUCCINO CAKE 947-10
CARROT CAKE 947-11
CHEESECAKE 947-05B
DUMB MONKEY 947-06
ICE CREAM MUG/WORKS 947-07A
MUG OF ICE CREAM 947-12
SMART COOKIE 947-08A
TIRAMISU 947-09A
BULK RECIPES
ARTICHOKE HEARTS 948-73
BACON CHEDDAR SAUCE 948-82
BAJA BEANS 948-95
BBQ CHICKEN PORTIONS 948-86
BULK CHICAGO CHICKEN SALAD 948-62
CAESAR SALAD DRESSING 948-01
CARAMELIZED ONIONS 948-02
CHEESE & MINESTRONE (1 STEP) 948-04
CHEESE & MINESTRONE 948-03A
CHICKEN FAJITAS MEAT 948-05B
CHICKEN SPINOCCOLI - ROULADE 948-101
CHOPPED PARSLEY 948-07
CHOPPED SPINACH 948-59A
CLAM CHOWDER 948-100
CORN SALSA 948-92
COUNTRY MUSTARD SAUCE 948-67
CREAM OF BROCCOLI 948-08A
CROUTONS 948-09A
CRUNCHY VEGGIE CALZONE MIX 948-66
CUCUMBER SLICES 948-71
DICED RED ONIONS 948-68
DOUGH 948-10*
FAJITA VEGETABLE MIX 948-12
FETA/MOZZARELLA MIX 948-13
GARLIC 948-14
GARLIC BREAD 948-16
GARLIC SPREAD MIX 948-17
GRILLED EGGPLANT 948-18A
HAM AND SWISS 948-53
HONEY MUSTARD DRESSING 948-20A
IKE'S SALAD DRESSING 948-21
JULIENNE RED PEPPERS 948-74
JULIENNED RED SWISS CHARD 948-23
JULIENNED PLUM TOMATOES 948-22
LEMON-LIME CHICKEN MIX 948-64A
LETTUCE MIX 948-24A
LIGHT TARRAGON MAYONNAISE 948-93
LOW FAT CHEESE MIXTURE 948-83
LOW FAT SPICY RANCH 948-96
MARINATED MUSHROOMS 948-30
MARSALA MUSHROOMS 948-90
MASHED POTATO MIX (PIZZA SKINS) 948-25B
MEAT SAUCE 948-27A
4
73
RECIPE MANUAL OCT. 12, 1995
CATEGORY CODE
-------- ----
MEATBALLS 948-28
MOZZARELLA/CHEDDAR MIX 948-29
MUSHROOM PROCEDURE 948-31
NO FAT 90/10 948-84
OREGANO/ROMANO MIX 948-32A
PARMESAN CHEESE GRATING PROCEDURE 948-80
PEPPERED OIL 948-36
PIZZA BROCCOLI 948-57
PIZZA ONIONS 948-76
PIZZA MUSHROOMS 948-75
PIZZA PEPPERS 948-77
PIZZA VEGETABLES 948-37A
PRIMAVERA GRILLED VEGETABLES 948-88
RED ONION RINGS 948-52A
RED ONION SLICES 948-78
ROASTED RED PEPPERS 948-79
ROMAINE LETTUCE 948-51
SALSA (TACO SAUCE) 948-39B
SAUSAGE LINK COOKING PROCEDURE 948-40
SAUTE ONIONS 948-69
SCALLIONS 948-41
SEA DELICO PORTIONS 948-56
SHREDDED BASIL PROCEDURE 948-70
SHREDDED MOZZARELLA 948-42
SEASONED PLUM TOMATOES 948-91
SHRIMP COOKING PROCEDURE 948-19
SLICE SALAMI 948-60
SLICE SWISS 948-61
SLICED HAM 948-55
SLICED MOZZARELLA 948-43
SLICED PICKLES - QUARTERED 948-103
SLICED POTATOES 948-44
SLICED TURKEY 948-54A
SOUR CREAM AND CHIVES 948-45
STIR FRY SAUCE 948-26
SUNTAN PEPPER RINGS 948-72
TACO PIZZA FILLING 948-63
SPINACH & ARTICHOKE DIP MIX 948-65
SPINACH 948-58B
STEAMED VEGETABLES 948-102
TOMATO BASIL MARINARA SAUCE 948-87
TOMATO GARDEN VEGETABLE SOUP 948-98
TOMATO WEDGES 948-46
TORTELLINI SALAD PORTION 948-35A
TORTILLA CRISPS 948-94
UNO CHICKEN STOCK 948-89
UNO CHILI 948-83
UNO LOW FAT PASTA SALAD 948-99
UNO NO FAT THINZETTA DOUGH 948-85
UNO-BURGER 948-47
VEGETABLE MARINADE 948-81B
VEGETABLE MIX 948-48
VEGGIE DIP MIX 948-49A
VEGGIE DIP VEGETABLES 948-50C
5
74
RECIPE MANUAL OCT. 12, 1995
CATEGORY CODE
-------- ----
PROCEDURES AND FORMS
CLAM CHOWDER HOLDING PROCEDURE 949-25
CONVERSIONS & ABBREVIATIONS 949-23
COOK PROCEDURES (4 PAGES)
AM LINE PROCEDURES GUIDE 949-01B
PM PROCEDURES GUIDE 949-02A
LINE PREP SHEET 949-03
DAILY PREP LIST 949-05
DOUGH MAKING/OPTIMUM PROPERTIES (PG. l) 949-13
DOUGH MAKING/OPTIMUM PROPERTIES (PG. 2) 949-14
DOUGH PROCEDURE 949-16C
DOUGH/QUALITY IDENTIFIERS 949-17
GRILLING CHICKEN PROCEDURE 949-19A
FRESH PASTA HANDLING PROCEDURE 949-29
FRY PROCEDURE 949-06B
PASTA COOKING 949-18C
PASTA RETHERMALIZATION 949-07
FRYER FILTERING PROCEDURE 949-26
FRYER TIPS/BOILING OUT 949-27
OVEN CUTTING / GARNISH CHART 949-08A
PIZZA SKIN PREBAKE 949-24A
PLIZZETTA PREBAKE PROCEDURE 949-15A
PORTIONING UTENSIL CHART 949-11A
PREBAKE PROCEDURE (PAGE 1 ) 949-09
PREBAKE PROCEDURE-KEY POINTS 949-10
SALAD WASHING PROCEDURE 949-21
SAUTE PROCEDURE 949-12A
SUNDRIED TOMATO PIECES - RECONSTITUTING 949-22A
TEC SEARMASTER BROILER PROCEDURE 949-20
THINZETTA DISCS 949-28
TAKE-OUT SERVICE
TO-GO PACKAGING - APPETIZERS 951-02
" " " 951-03
" " - BEVERAGES 951-10
" " - DESSERTS 951-09
" " - KID'S MENU 951-11
" " - PIZZA 951-06
" " - SALADS 951-05
" " - SANDWICHES/SIDES 951-08
" " - SOUPS 951-04
" " - SPECIALTIES 951-07
TRAINING CHARTS - (ENGLISH VERSION) - AS OF 9/14/95
APPETIZERS PLIZZETTAS
DEEP DISH SANDWICHES
DESSERTS SOUPS/SALADS
KIDS' SPECIALTIES/PASTA
LUNCH SPECIALS PREP
4 PER PAGE TRAINING CHARTS - NEW MENU - AS OF 10/12/95
6
75
RECIPE MANUAL OCT. 12, 1995
CATEGORY CODE
-------- ----
THINZETTAS
ARTIPEGGIO THINZETTA 952-01
BBQ CHICKEN THINZETTA 952-02
CHEESE AND TOMATO THINZETTA 952-03
FANCY CHEESE THINZETTA 952-04
HARVEST THINZETTA 952-05
LEMON-LIME CHICKEN THINZETTA 952-06
QUESADILLA THINZETTA 952-07
SAUSAGE THINZETTA 952-08
SUPERONI THINZETTA 952-09
PLIZZETTAS
ARTIPEGGIO 953-01B
BBQ CHICKEN 953-14B
CHEESE AND TOMATO 953-18
CHEESELESS 953-02A
CHICKEN CORDON BLEU 953-03B
CHICKEN HONEY MUSTARD 953-12
DELUXE CHEESE 953-04B
HARVEST 953-05C
LEMON LIME CHICKEN 953-16
MEXICAN 953-13B
PESTO, PLUM TOMATO 953-10B
PLIZZETTA PREBAKE PROCEDURE 953-06C
QUESADILLA (SEE APPETIZERS) 941-14
SAUSAGE 953-07C
SHRIMP SCAMPI 953-17
SUPERONI 953-08C
BEVERAGES
ALMOND JOY 954-37
APPLE CIDER (HOT OR COLD) 954-51
BANANA FROST 954-06
BEVERAGE PRESENTATION 954-22
CAFE FRANCES/ROYAL 954-07
CAFE UNO 954-08
CAPPUCCINO 954-09B
CHOCO-CAPPUCCINO 954-10
CHOCOLATE CHIP (OR MINTED CHIP) 954-01
CINNAMON MARTINI 954-43
CLASSIC BLOODY MARY 954-46
CLASSIC MARTINI 954-42
COFFEE 954-11A
CRANBERRY JUICE & SODA 954-53
DEVIOUS DAIQUIRIS 954-12
DUTCH COFFEE 954-13
ESPRESSO 954-14A
HOT TEA 954-15A
FROZEN CANDY CANE 954-36
FROZEN CAPPUCCINO 954-39
FROZEN STRAWBERRY SHORTCAKE 954-03
FULL BOTTLE WINE PRESENTATION 954-54
GIANT CAPPUCCINO MUDSLIDE 954-40
7
76
RECIPE MANUAL OCT. 12, 1995
CATEGORY CODE
-------- ----
BEVERAGES CONTINUED
GODIVA CHOCOLATE CAPPUCCINO 954-41
GODIVA HOT CHOCOLATE 954-33
GODIVA HOT CHOCOLATE COFFEE 954-31
HOT NUTTY BROWNIE 954-32
ICED TEA 954-16A
IBC ROOT BEER 954-57
IRISH COFFEE 954-17A
KEOKE COFFEE 954-18
KEY LIME FREEZE 954-19
LONG ISLAND ICED TEA 954-20
MARGERITA 954-21
MELONBALL 954-50
MILK 954-55
MINERAL WATER 954-58
MOCHA FROST 954-23
MUG OF MARGERITA 954-24
NON-ALCOHOLIC BEERS 954-59
OREO COOKIE MONSTER 954-35A
PINA COLADA 954-25
RASPBERRY COOLER 954-26
ROOT BEER FLOAT 954-27B
SANGRIA (BULK, GLASS, PITCHER) 954-28
SNAPPLE LEMONADE 954-56
SNOWMELTER 954-34
SOFT DRINKS 954-29A
THE DIRTY BANANA 954-02
UNO APPLE CRISP (HOT OR COLD) 954-52
UNO BLUE WAVE 954-04
UNO CRANBERRY MARGARITA 954-47
UNO GOLD MARGARITA 954-48
UNO PINEAPPLE MARTINI 954-45
UNO PINK LEMONADE 954-05
UNO SUNSET 954-49
UNO TOASTED MUDSLIDE 954-38
UNO WINTERTIME BLASTER 954-30
WHITE CHOCOLATE MARTINI 954-44
8
77
TABLE OF CONTENTS
BAR MANUAL
----------
Welcome 1
Uno Information 2
Job Description 3-9
Opening Bar Duties 10-11
Closing AM Procedures 12
Closing Bar Duties 13
Service 14-19
Teamwork 20-24
Food Preparation and Knowledge 25-34
Beverage Preparation and Knowledge 35-52
Cash Handling Procedures and Controls 53-58
Guest Complaints and Problems 59
78
HOSTING REFERENCE MANUAL
TABLE OF CONTENTS
Some Notes .............................................................. 1
UNO Information ......................................................... 2
Job Description ......................................................... 4
Mission Statement ....................................................... 5
Hosting Service Standards ................................................ 7
Station Plan and Seating Rotation ............................ 8
Pivot Point Seating .......................................... 9
Wait List .................................................... 9
Administering the Wait ....................................... l0
Calculating a time for Wait Listing .......................... 11
Advanced Seating ............................................. 11
Procedures for Handling Advanced Seating Requests ............ 11
Advanced Ordering ............................................ 12
Paging ....................................................... 13
Lost and Found ............................................... 13
Welcome to Uno's ........................................................ 14
Safety Policies .............................................. 15
Heimlich Maneuver ............................................ 16
Hazard Communication ......................................... 17
An Overview of the Menu ................................................. 18
Liquor, Beer, and Wine ....................................... 20
Creating a Masterpiece ....................................... 21
Take Out Packaging ...................................................... 22
Handling Take out Orders .................................... 23
Guests with Kids ........................................................ 25
Smallwares .............................................................. 27
Safe Food Handling/Sanitation ........................................... 29
Controlling Food Cost ................................................... 30
NCR 2760 Instructions ................................................... 31
NCR 7450 Touch Screen .................................. 32
Guest Service and Teamwork .............................................. 35
Teamwork ..................................................... 35
Great Beginnings ............................................. 35
Payment and Farewell ......................................... 35
Types of Payment ............................................. 36
Bussing and Resetting ........................................ 36
Steps to Bussing Tables ...................................... 37
Guest Complaints and Problems ........................................... 37
Answering the Telephone ................................................. 38
Sidework ................................................................ 39
Cashing Out ............................................................. 40
Collecting Other Cashouts .................................... 41
Opening Host Duties ..................................................... 42
Closing Host Duties ..................................................... 43
Questions and Answers ................................................... 44
Exercises ............................................................... 45
79
SERVER REFERENCE MANUAL
TABLE OF CONTENTS
Welcome
Some Notes ................................................... 1
UNO Information .............................................. 2
Job Description .............................................. 3
Mission Statement ............................................ 4
Welcome to Uno's ............................................. 6
Your Job as a Server ......................................... 7
Safety Policies .............................................. 8
Heimlich Maneuver ............................................ 9
Hazard Communication ......................................... 10
An Overview of the Menu ................................................ 11
Liquor, Beer, and Wine ....................................... 13
Creating a Masterpiece ....................................... 14
Take Out Packaging ........................................... 15
Guests with Kids ....................................................... 16
Glassware .............................................................. 17
Smallwares ................................................... 18
Safe Food Handling/Sanitation ........................................... 20
Controlling Food Cost ................................................... 20
NCR 2760 Instructions ................................................... 21
NCR 7450 Touch Screen ........................................ 22
Serving Guests .......................................................... 25
Great Beginnings ............................................. 25
Acceptable IDs ............................................. 25
Selling the Meal ............................................. 26
The Meal ..................................................... 28
Changing Ashtrays .......................................... 28
Payment & Farewell ........................................... 29
Types of Payment ........................................... 30
Bussing and Resetting ...................................... 31
Teamwork ..................................................... 32
Suggestive Selling ........................................... 33
Steps for Effective Merchandising ....................................... 34
Opportunities for Suggestive Selling ......................... 36
The Server as a Greeter ................................................. 38
Answering the Telephone ...................................... 39
Sidework ................................................................ 40
Cashing Out ............................................................. 41
Tip Reporting ................................................ 42
Collecting Other Cashouts .................................... 43
Exercises ............................................................... 44
80
DISH/MAINTENANCE REFERENCE MANUAL
TABLE OF CONTENTS
UNO Information ......................................................... 3
Job Description ......................................................... 4
Training Tools .......................................................... 5
UNO Lingo ............................................................... 6
Safety Policies ......................................................... 9
Guidelines ....................................................... 9
Using a Fire Extinguisher ........................................ 10
Heimlich Maneuver ................................................ 11
Chemicals in the workplace ....................................... 12
Sanitation .............................................................. 13
Maintaining a Sanitary Kitchen ................................... 13
Fundamentals of Safe Food Service ................................ 13
Dish Washing ............................................................ 16
Washing By Hand .................................................. 16
Washing by Machine ............................................... 17
Handling Utensils, Dishware and Glassware ........................ 18
Silverware ....................................................... 19
Dishware ......................................................... 19
Glassware ........................................................ 19
Garbage Disposal ................................................. 20
Maintaining the Dishmachine ...................................... 21
Recycling ........................................................ 22
Maintenance ............................................................. 23
Trash Removal .................................................... 23
Cleaning Floors .................................................. 23
Heavy Duty Cleaning of Floors .................................... 24
Cleaning Dirty Mop Heads ......................................... 25
Cleaning Walls and Door Surfaces ................................. 26
Clean Floor Drains and Covers .................................... 26
Cleaning Filters and Screens ..................................... 27
Cleaning Exhaust Hood ............................................ 27
Cleaning Cooler Ceiling, Walls, and Racks ........................ 28
Cleaning Restrooms ............................................... 28
Cleaning and Sanitizing Counters, Tables, and Fixed Equipment .... 29
Cleaning Outside Windows ......................................... 30
Cleaning Schedule ................................................ 31
81
PREP REFERENCE MANUAL
TABLE OF CONTENTS
UNO Information ....................................................... 5
Job Description ....................................................... 6
Training Tools ........................................................ 8
UNO Lingo ............................................................. 9
Safety Policies ....................................................... 11
Guidelines ..................................................... 11
Using a Fire Extinguisher ...................................... 12
Heimlich Maneuver .............................................. 14
Chemicals in the workplace ..................................... 14
Sanitation and Food Safety ............................................ 15
Maintaining a Sanitary Kitchen ................................. 15
Fundamentals of Safe Food Service .............................. 15
General Cleaning ...................................................... 21
Sanitizing ..................................................... 21
Trash Removal .................................................. 21
Cleaning Floors ................................................ 22
Cleaning Walls and Door Surfaces ............................... 23
Cleaning Cooler Ceiling, Walls, and Racks ...................... 24
Cleaning and Sanitizing Counters, Tables and Fixed Equipment ... 24
Daily Prep List ...................................................... 26
Reading the Prep List .......................................... 26
Completing the Daily Prep List ................................. 27
Equipment ............................................................. 31
Correct Usage of Equipment ..................................... 3l
Knives ......................................................... 33
The Steel ...................................................... 34
Cutting Board .................................................. 35
Measurement Tools .............................................. 35
Tilting Kettle ................................................. 36
Hobart (Dough) Mixer ........................................... 38
Slicer ......................................................... 40
Greens Machine ................................................. 42
Electronic Scale ............................................... 44
Tomato Slicer .................................................. 46
82
PREP REFERENCE MANUAL
Lettuce Cutter.................................................... 48
Can Opener ....................................................... 49
Produce .................................................................. 50
Handling ......................................................... 50
Storing .......................................................... 50
Quality Indicators ............................................... 50
Chicken................................................................... 55
Cheese.................................................................... 55
Dry Pasta ................................................................ 55
Canned Goods ............................................................. 56
Dough .................................................................... 57
Dough Troubleshooting ............................................ 59
Dough Portion Chart .............................................. 60
Parbaking ................................................................ 61
Parbake Troubleshooting .......................................... 67
83
COOK REFERENCE MANNUAL
Cook Training Manual 7/31/95
- --------------------------------------------------------------------------------
Training Tools ........................................................... 2
Introduction ............................................................. 3
Objectives ....................................................... 3
UNO Information .................................................. 4
UNO Factual Highlights ........................................... 5
Job Description .................................................. 6
Cook Work Stations ............................................... 8
Uniform and Personal Hygiene ..................................... 9
Teamwork ......................................................... 10
Safety and Sanitation .................................................... 11
Objectives ....................................................... 11
Safety Policies .................................................. 12
Hazard Communication ............................................. 14
Hazard Communication ............................................. 14
Sanitation and Food Safety ....................................... 15
General Cleaning Procedures ...................................... 19
Kitchen Basics ........................................................... 21
Objectives ....................................................... 21
Kitchen Equipment (Settings, Usages and Cleaning) ................ 22
Uno Lingo ........................................................ 29
Food Preparation ................................................. 32
Reading Recipes .................................................. 35
Using A Knife .................................................... 36
Measurement Tools ................................................ 36
Line Set-Up ...................................................... 37
Reading A Food Order Ticket ...................................... 38
Freezer Pull (or Pull-Thaw) ...................................... 40
Dough Making and Parbaking ............................................... 41
Objectives ....................................................... 41
The Pizza (Parbake) Projection ................................... 42
Dough Making ..................................................... 45
Deep Dish Parbaking .............................................. 47
Plizzetta Parbaking .............................................. 50
Pizza Station ............................................................ 53
Pizza / Plizzetta Checklist ...................................... 54
Creating A Masterpiece ........................................... 58
Building Pizzas .................................................. 59
Building Plizzettas .............................................. 61
Cutting Station .................................................. 62
Saute Station ............................................................ 63
Saute Checklist .................................................. 64
Fry Procedure .................................................... 68
Grill Procedure .................................................. 72
Saute Procedure .................................................. 74
- --------------------------------------------------------------------------------
Table of Contents
84
MANAGEMENT TRAINING PROGRAM
TABLE OF CONTENTS
Manager-In-Training Orientation 1-12
Kitchen Training
Objectives 13-29
Accomplishment Recap 30-43
Projects 44-45
Workbook 46-57
Certification 58
Hosting Training
Objectives 59-72
Accomplishment Recap 73-75
Projects 76
Workbook 77-81
Certification 82
Bar Training
Objectives 83-89
Accomplishment Recap 90-93
Projects 94
Workbook 95-98
Certification 99
Server Training
Objectives 100-105
Accomplishment Recap 106-107
Projects 108
Workbook 109-111
Certification 112
MOD Training
Objectives 113-115
Accomplishment Recap 116-127
Workbook 128-135
Certification 136
85
QUALITY ASSURANCE MANUAL
TABLE OF CONTENTS
ISSUE TOPIC DATE PAGE
#1 DOUGH HANDLING AND PREBAKE PRODUCTION JUNE, 1994 1
#2 MENU ITEM PRESENTATION JUNE, 1994 2
#3 PLIZZETTAS JUNE, 1994 3
#4 "THE RIGHT QUALITY - PRODUCE" AUGUST, 1994 4
#5 "MENU ITEMS" (QUALITY) APRIL, 1995 5
#6 HANDLING REPORTS OF FOODBORNE ILLNESS AUGUST, 1994 6
#7 KITCHEN SANITATION GUIDE SEPTEMBER, 1994 7
#8 KITCHEN WALK-THROUGH "CHECKLIST" APRIL, 1995 8
#9 KITCHEN, PIZZA/SANDWICH TABLES SEPTEMBER, 1994 9
#10 FOOD HANDLING - REFRIGERATED RAILS OCTOBER, 1994 10
"PASTA COOKING PROCEDURES" (REVISED)
#11 SANITATION AND MAINTENANCE SCHEDULES OCTOBER, 1994 11
(REVISED)
#12 EQUIPMENT SANITATION CHARTS OCTOBER, 1994 12
AND SCHEDULES {REVISED)
#13 DOUGH MAKING - OPTIMUM PROPERTIES JANUARY, 1995 13
#14 DEEP DISH PREBAKING - OPTIMUM PROPERTIES JANUARY, 1995 14
#15 PREBAKING - PLIZZETTA - OPTIMUM PROPERTIES JANUARY, 1995 15
#16 "WHEN THE INSPECTOR VISITS" MARCH, 1990 16
86
HAZARD COMMUNICATION PROGRAM
UNO RESTAURANT CORPORATION
HAZARD COMMUNICATION PROGRAM
TABLE OF CONTENTS
PAGE
- Notice to Employees 1
- Introduction 2
- Requirements of the Hazard Communication Standard 3
- Container Labeling 4
- Material Safety Data Sheets (MSDS) Explanation 5
- Employee Information and Training 6
- Hazardous Substances and Non-Routine Tasks 7
- Master Chemical Inventory List 8
- MSDS 9
- Hazard Communication Training Quiz 10
87
FACILITIES MANAGEMENT PROGRAM
TABLE OF CONTENTS
INTRODUCTION ...................................................................................2
Cleaning Products Safety .............................................................2
Overview .............................................................................3
Recommended Products Preview ......................................................4-13
Recommended Unit Cleaning Equipment ................................................ 14
GENERAL INSIDE CLEANING .......................................................................15
General Floor Cleaning Guidelines ...................................................15
Damp Mopping Procedures (Quarry Tile/Unwaxed Floors) .............................16-17
Wet Mopping Procedures ...........................................................18-19
Deck Brushing Procedures..........................................................20-22
Cleaning Mop Heads ...............................................................23-24
Floor Drains .....................................................................25-26
Walls, Doors ......................................................................27-28
Damp Mopping Procedures (Waxed Tile) .............................................29-30
Exhaust Filters and Screens ......................................................31-32
Exhaust Hood .....................................................................33-34
Cooler Ceiling, Walls, and Racks ..................................................35-36
Inside Spot Cleaning with Glass Cleaner .............................................37
Inside Spot Cleaning with Joy Cleaning Solution......................................38
Stainless Steel Polishing ...........................................................39
FOODSERVICE CLEANING AND SANITATION ...........................................................40
3 Compartment Cleaning Sink ......................................................40-43
In-Place Equipment
Counters, and Tabletops ........................................................44-46
Fryer Boil Out Procedures ........................................................47-51
Heavy Grease Spot Cleaning .......................................................52-53
Milk Shake/Yogurt Machine ...........................................................54
RESTROOM CLEANING .............................................................................55
Toilet Bowls/Urinal Cleaning .....................................................55-56
Toilet Bowls/Urinal Disinfecting .................................................57-58
Sinks/Vanities ......................................................................59
Spot Cleaning Restroom Mirrors
Dispensers, Walls, with Glass Cleaner ...............................................60
Spot Cleaning with Joy Cleaning Solution ............................................61
GENERAL OUTSIDE CLEANING ......................................................................62
General Concrete and Blacktop Cleaning ...........................................62-63
Heavy Grease/Outside Concrete Cleaning ...........................................64-65
Outside Windows ..................................................................66-67
Dumpsters/Trash Containers ..........................................................68
MISCELLANEOUS .................................................................................69
Preparation of 2 - 1/2 Gallon Jug ................................................69-70
Preparation of All Purpose Joy Solution ..........................................71-72
Preparation of 2 - 1/2 Gallon Jug ...................................................73
Preparation of Clean Quick Glass Cleaner ............................................74
Installation of a Joy Proportioner ...............................................75-77
Joy 1 Gallon Bottle Wall Rack installation .......................................78-79
Clean Quick Quarternary Sanitizer Bottle Wall Rack Installation ..................80-91
Preparation of Restroom Caddy .......................................................82
INDEX BY TASK, BY PRODUCT .....................................................................83
APPENDIX
Material Safety Data Sheets
88
ATTACHMENT C
FINANCIALS
89
Pizzeria Uno Corporation
Audited Financial Statements
Years ended October 1, 1995, October 2, 1994
and October 3, 1993
CONTENTS
Report of Independent Auditors .................................................1
Audited Financial Statements
Balance Sheets .................................................................2
Statements of Income and Retained Earnings .....................................3
Statements of Cash Flows .......................................................4
Notes to Financial Statements ..................................................5
90
[ERNST & YOUNG LLP LETTERHEAD]
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Shareholder
Pizzeria Uno Corporation
We have audited the accompanying balance sheets of Pizzeria Uno Corporation (the
Company), a wholly-owned subsidiary of URC Holding Company, Inc., which is a
wholly-owned subsidiary of Uno Restaurant Corporation, as of October 1, 1995 and
October 2, 1994, and the related statements of income and retained earnings, and
cash flows for each of the three years in the period ended October 1, 1995.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Pizzeria Uno Corporation at
October 1, 1995 and October 2, 1994, and the results of its operations and its
cash flows for each of the three years in the period ended October 1, 1995, in
conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
November 1, 1995
91
Pizzeria Uno Corporation
Balance Sheets
OCTOBER 1 OCTOBER 2
1995 1994
-----------------------------
ASSETS
Current assets:
Royalties receivable, net of allowances of $271,112
in 1995 and $210,945 in 1994 $ 724,616 $ 553,452
Other accounts receivable 355,756 304,812
Deferred income taxes 199,432 188,152
-----------------------------
Total current assets 1,279,804 1,046,416
-----------------------------
Other assets:
Due from Uno Restaurant Corporation 15,847,296 9,418,266
Royalty fee, net 405,459 488,404
-----------------------------
$17,532,559 $10,953,086
=============================
LIABILITIES AND SHAREHOLDER'S EQUITY
Franchise fee deposits-current $ 257,500 $ 264,809
Deferred income taxes 60,499 75,039
Shareholder's equity:
Common stock, $.01 par value per share, 3,000 shares
authorized, 196 shares issued and outstanding 2 2
Retained earnings 17,214,558 10,613,236
-----------------------------
17,214,560 10,613,238
-----------------------------
$17,532,559 $10,953,086
=============================
See accompanying notes.
2
92
Pizzeria Uno Corporation
Statements of Income and Retained Earnings
YEAR ENDED
-----------------------------------------------
OCTOBER 1 OCTOBER 2 OCTOBER 3
1995 1994 1993
-----------------------------------------------
(53 weeks)
Revenues:
Royalty income:
Franchisee-owned units $ 4,036,405 $ 3,823,260 $3,490,738
Parent-owned units 7,312,680 5,926,945
Franchise fees 125,000 150,000 147,500
-----------------------------------------------
11,474,085 9,900,205 3,638,238
Costs and expenses:
General and administrative 1,888,849 1,427,363 1,209,614
-----------------------------------------------
Operating income 9,585,236 8,472,842 2,428,624
Interest income 1,176,620 0 0
-----------------------------------------------
Income before income taxes 10,761,856 8,472,842 2,428,624
Provision for income taxes 4,160,534 3,399,064 991,000
-----------------------------------------------
Net income 6,601,322 5,073,778 1,437,624
Retained earnings at beginning of period 10,613,236 5,539,458 4,101,834
-----------------------------------------------
Retained earnings at end of period $17,214,558 $10,613,236 $5,539,458
===============================================
See accompanying notes.
3
93
Pizzeria Uno Corporation
Statements of Cash Flows
YEAR ENDED
-------------------------------------------------
OCTOBER 1 OCTOBER 2 OCTOBER 3
1995 1994 1993
---- ---- ----
(53 weeks)
OPERATING ACTIVITIES
Net income $ 6,601,322 $ 5,073,778 $ 1,437,624
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization 82,945 81,380 81,380
Deferred income taxes (25,820) (52,113) (103,000)
Changes in operating assets and
liabilities:
Royalties receivable (171,164) (78,037) (54,204)
Other accounts receivable (50,944) (85,400) (151,623)
Franchise fee deposits (7,309) 22,309 102,500
Accrued expenses (14,079)
-------------------------------------------------
Net cash provided by operating activities 6,429,030 4,961,917 1,298,598
INVESTING ACTIVITY
Increase in due from Uno Restaurant
Corporation (6,429,030) (4,961,917) (1,298,598)
-------------------------------------------------
Change in cash 0 0 0
Cash at beginning of period 0 0 0
-------------------------------------------------
Cash at end of period $ 0 $ 0 $ 0
=================================================
See accompanying notes.
4
94
Pizzeria Uno Corporation
Notes to Financial Statements
October 1, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements include the accounts of Pizzeria Uno Corporation (the
Company), a wholly-owned subsidiary of URC Holding Company, Inc., which is a
wholly-owned subsidiary of Uno Restaurant Corporation (the Parent).
REVENUE RECOGNITION
The Company defers franchise fee deposits until the franchisee opens the
restaurant and all services have been substantially performed; at that time, the
entire amount of the fee is recorded as income.
Effective October 4, 1993, the Company entered into agreements with all
Parent-owned units for royalty payments, consistent with those paid by
franchised-owned units. Royalty income for all Parent-owned and franchised
stores is accrued as earned based on rates provided by the respective franchise
agreements.
A summary of full-service franchise unit activity is as follows:
YEAR ENDED
--------------------------------
OCTOBER 1 OCTOBER 2 OCTOBER 3
1995 1994 1994
--------------------------------
Units operating at beginning of year 59 58 59
Units opened 5 5 3
Units closed (5) (1) (2)
Units converted to Parent-owned units 0 (3) (2)
--------------------------------
Units operating at end of year 59 59 58
================================
5
95
Pizzeria Uno Corporation
Notes to Financial Statements (continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CONCENTRATIONS OF CREDIT RISK
Concentrations of credit risk with respect to royalties receivable are limited
due to the large number of franchisees comprising the Company's franchise base
and their dispersion across many different geographic areas. At October 1, 1995,
the Company had no significant concentrations of credit risk.
DUE FROM UNO RESTAURANT CORPORATION
Effective October 3, 1994, the Company began to charge the Parent interest
(approximately 9% at October 1, 1995) on the amount due from Uno Restaurant
Corporation. The amount due from the Parent has been classified as non-current
because the Company has no current intention to demand payment.
INCOME TAXES
The Company is part of a group that files a consolidated tax return for federal
purposes and in certain states. The Parent's policy is to allocate tax expense
to members of the group based on the Parent's overall federal and state income
tax rate. Any computed income taxes payable are charged to the intercompany
account.
In fiscal year 1994 and 1995, deferred income taxes are recognized for temporary
differences between financial statement and income tax bases of assets and
liabilities for which income tax benefits and obligations will be realized in
future years. In fiscal year 1993, the provision for deferred income taxes
represents the tax effect of differences in the timing of income and expense
recognition for tax and financial statement purposes.
FISCAL YEAR
The Company's fiscal year ends at the close of business on the Sunday closest to
September 30 in each year. The fiscal year ended October 3, 1993 included 53
weeks of operations.
RECLASSIFICATIONS
Certain amounts in the accompanying 1993 financial statements have been
reclassified to permit comparison with 1994 and 1995.
6
96
Pizzeria Uno Corporation
Notes to Financial Statements (continued)
2. FRANCHISE AND ROYALTY FEE AGREEMENTS
The Company has an agreement which provides for, among other things, the
assignment of the trademark "Pizzeria Uno." The fee is being amortized over the
14-year life of the original agreement. Accumulated amortization amounted to
$734,006 and $651,061 at October 1, 1995 and October 2, 1994, respectively.
Royalty expense was $82,945 in 1995 and $81,380 in 1994 and 1993.
The Company grants to qualified licensees a nontransferable interest to use the
trademarks and trade names for (1) a fee upon execution of the franchise
agreement, (2) a fee upon the opening of the restaurant and (3) royalties and
advertising fees based on gross sales.
3. RELATED-PARTY TRANSACTIONS
The Parent provides certain management and administrative services for the
Company. Amounts charged for these services in 1995, 1994 and 1993 amounted to
$1,680,905, $1,245,987 and $1,217,942, respectively, based on specific expenses
related to the Company and paid for by the Parent plus an allocation of general
corporate overhead based on relative revenues.
The Company's President and his brother own and operate three franchised
restaurants. Additionally, the Chairman of the Company owns a 50% interest in a
franchised pizza take-out unit, and one of the directors of the Company has a
partnership interest in a franchised restaurant. These franchisees pay royalties
to the Parent under standard franchise agreements, with the exception of the
pizza bakery, which is being operated as a test concept, and as a result, is not
currently being charged royalties.
4. CONTINGENT LIABILITIES
The Company and Parent have jointly guaranteed a $50 million unsecured revolving
credit and note agreement between Uno Restaurants, Inc. (URI), another
subsidiary, and its primary commercial bank. At October 1, 1995, URI's
borrowings were $21,750,000 at interest rates ranging from 6.87% to 8.75%. The
note agreements contain certain financial and operating covenants, including
maintenance of certain levels of net worth and income.
7
97
Pizzeria Uno Corporation
Notes to Financial Statements (continued)
5. INCOME TAXES
Effective October 4, 1993, the Company adopted Financial Accounting Standards
Board Statement No. 109 (Statement 109). As permitted by Statement 109, the
Company elected not to restate the financial statements of any prior years. The
effect of the change on net income for fiscal 1994, as well as the cumulative
effect, was not material.
Deferred taxes are attributable to the following temporary differences:
OCTOBER 1 OCTOBER 2
1995 1994
--------------------------
DEFERRED TAX ASSETS:
Franchise fees $ 99,507 $103,251
Allowance for doubtful accounts 99,925 84,901
-------------------------
199,432 188,152
DEFERRED TAX LIABILITY:
Royalty fee 60,499 75,039
-------------------------
NET DEFERRED TAX ASSETS $138,933 $113,113
=========================
The provision (credit) for income taxes consisted of the following:
DEFERRED
LIABILITY METHOD METHOD
---------------------------------------------
YEAR ENDED
---------------------------------------------
OCTOBER 1 OCTOBER 2 OCTOBER 3
1995 1994 1993
---------------------------------------------
Current:
Federal $3,427,290 $2,653,779 $ 820,000
State 759,064 797,398 274,000
--------------------------------------------
4,186,354 3,451,177 1,094,000
Deferred:
Federal (19,881) (40,127) (79,000)
State (5,939) (11,986) (24,000)
--------------------------------------------
(25,820) (52,113) (103,000)
--------------------------------------------
Income tax expense $4,160,534 $3,399,064 $ 991,000
============================================
8
98
Pizzeria Uno Corporation
Notes to Financial Statements (continued)
5. INCOME TAXES (CONTINUED)
A reconciliation of the effective tax rates with the federal statutory rates is
as follows:
DEFERRED
LIABILITY METHOD METHOD
---------------------------------------
YEAR ENDED
--------------------------------------
OCTOBER 1 OCTOBER 2 OCTOBER 3
1995 1994 1993
--------------------------------------
Federal statutory rate 34.1% 34.0% 34.0%
State income taxes, net of federal income
tax benefit 4.6 6.1 6.8
-----------------------------------
Effective income tax rate 38.7% 40.1% 40.8%
===================================
9
99
AUDITED CONSOLIDATED FINANCIAL
STATEMENTS
UNO RESTAURANT CORPORATION
AND SUBSIDIARIES
Fiscal years ended October 1, 1995,
October 2, 1994 and October 3, 1993
100
Uno Restaurant Corporation and Subsidiaries
Audited Consolidated Financial Statements
Fiscal years ended October 1, 1995, October 2, 1994
and October 3, 1993
CONTENTS
Report of Independent Auditors ............................................1
Audited Consolidated Financial Statements
Consolidated Balance Sheets ...............................................2
Consolidated Statements of Income .........................................3
Consolidated Statements of Shareholders' Equity ...........................4
Consolidated Statements of Cash Flows .....................................5
Notes to Consolidated Financial Statements ................................6
101
[ERNST & YOUNG LLP LETTERHEAD]
Report of Independent Auditors
The Board of Directors
Uno Restaurant Corporation
We have audited the accompanying consolidated balance sheets of Uno Restaurant
Corporation and subsidiaries (the Company) as of October 1, 1995 and October 2,
1994, and the related consolidated statements of income, shareholders' equity,
and cash flows for each of the three years in the period ended October 1, 1995.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Uno Restaurant
Corporation and subsidiaries at October 1, 1995 and October 2, 1994, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended October 1, 1995, in conformity with generally
accepted accounting principles.
/s/ Ernst & Young LLP
November 1, 1995
1
102
Uno Restaurant Corporation and Subsidiaries
Consolidated Balance Sheets
October 1 October 2
1995 1994
--------- ---------
(in thousands)
Assets
Current assets:
Cash $ 1,305 $ 961
Royalties receivable 725 553
Consumer product receivable 567 473
Inventory 2,226 1,744
Deferred pre-opening costs 1,253 568
Prepaid expenses and other assets 2,221 1,532
-------- -------
Total current assets 8,297 5,831
Property, equipment and leasehold improvements, net 112,498 80,057
Deferred income taxes 1,151 1,442
Other assets:
Liquor licenses and other assets 3,314 1,823
Deposit 3,000
-------- -------
3,314 4,823
-------- -------
$125,260 $92,153
======== =======
October 1 October 2
1995 1994
--------- ---------
(Dollar amounts
in thousands,
except per share data)
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $ 6,238 $ 5,006
Accrued expenses 3,913 3,996
Accrued compensation and taxes 2,231 2,357
Income taxes payable 126 654
Current portions of long-term debt and capital
lease obligations 3,404 3,400
-------- -------
Total current liabilities 15,912 15,413
Long-term debt, net of current portion 21,750 17,303
Capital lease obligations, net of current portion 749 820
Other liabilities 3,722 2,659
Commitments and contingencies
Shareholders' equity:
Preferred Stock, $1.00 par value, 1,000,000 shares
authorized, no shares issued or outstanding
Common Stock, $.01 par value, 25,000,000 shares
authorized, 13,682,270 shares in 1995 and 9,072,499
shares in 1994 issued 137 91
Additional paid-in capital 53,433 30,613
Retained earnings 32,457 25,254
-------- -------
86,027 55,958
Treasury Stock (358,100 shares, at cost) (2,900)
-------- -------
Total shareholders' equity 83,127 55,958
-------- -------
$125,260 $92,153
======== =======
See accompanying notes.
103
Uno Restaurant Corporation and Subsidiaries
Consolidated Statements of Income
YEAR ENDED
--------------------------------------------
OCTOBER 1 OCTOBER 2 OCTOBER 3
1995 1994 1993
--------------------------------------------
(53 WEEKS)
(Amounts in thousands, except
per share data)
Revenues:
Restaurant sales $ 146,100 $ 112,674 $ 98,234
Consumer product sales 8,477 7,418 7,073
Franchise income 4,129 3,973 3,638
-------------------------------------------
158,706 124,065 108,945
Costs and expenses:
Cost of food and beverages 39,420 30,177 26,024
Labor and benefits 47,377 36,935 32,990
Occupancy costs 22,925 18,979 17,295
Other operating costs 13,583 10,751 9,166
General and administrative 11,229 9,277 8,233
Depreciation and amortization 10,795 7,655 7,152
-------------------------------------------
145,329 113,774 100,860
-------------------------------------------
Operating income 13,377 10,291 8,085
Other income (expense):
Interest expense (1,924) (1,147) (1,077)
Other income (expense) (20) 302 (8)
-------------------------------------------
(1,944) (845) (1,085)
-------------------------------------------
Income before income taxes 11,433 9,446 7,000
Provision for income taxes 4,230 3,690 2,837
-------------------------------------------
Net income $ 7,203 $ 5,756 $ 4,163
===========================================
Earnings per common share $ .58 $ .51 $ .37
===========================================
Weighted-average number of common
shares 12,364 11,360 11,291
===========================================
See accompanying notes.
3
104
Uno Restaurant Corporation and Subsidiaries
Consolidated Statements of Shareholders' Equity
COMMON STOCK ADDITIONAL
---------------------- PAID-IN RETAINED TREASURY
SHARES AMOUNT CAPITAL EARNINGS STOCK TOTAL
-------------------------------------------------------------------------------------
(Amounts in thousands)
Balance at September 27, 1992 8,964 $ 90 $ 29,744 $ 15,335 $ (79) $ 45,090
Net income (53 weeks) 4,163 4,163
Exercise of stock options 12 20 79 99
Tax benefit from exercise of
nonqualified stock options 23 23
-------------------------------------------------------------------------------------
Balance at October 3, 1993 8,976 90 29,787 19,498 49,375
Net income 5,756 5,756
Exercise of stock options 96 1 712 713
Tax benefit from exercise of
nonqualified stock options 114 114
-------------------------------------------------------------------------------------
Balance at October 2, 1994 9,072 91 30,613 25,254 55,958
Net income 7,203 7,203
5-for-4 stock split 2,275 23 (23)
Sale of Common Stock, net of
offering costs 2,300 23 22,541 22,564
Exercise of stock options 35 226 226
Purchase of Treasury Stock (2,900) (2,900)
Tax benefit from exercise of
nonqualified stock options 76 76
-------------------------------------------------------------------------------------
Balance at October 1, 1995 13,682 $ 137 $ 53,433 $ 32,457 $ (2,900) $ 83,127
=====================================================================================
See accompanying notes.
4
105
Uno Restaurant Corporation and Subsidiaries
Consolidated Statements of Cash Flows
YEAR ENDED
-----------------------------------------
OCTOBER 1 OCTOBER 2 OCTOBER 3
1995 1994 1993
-----------------------------------------
(53 WEEKS)
(In thousands)
OPERATING ACTIVITIES
Net income $ 7,203 $ 5,756 $ 4,163
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 10,896 7,765 7,235
Deferred income taxes 291 547 (424)
Provision for deferred rent 637 462 735
Gain on disposal of equipment (28) (321) (82)
Changes in operating assets and liabilities,
net of effects from business
acquisitions:
Royalties receivable (172) (77) (55)
Inventory (482) (429) (127)
Prepaid expenses and other assets (3,736) (960) (1,629)
Accounts payable and other liabilities 2,055 1,948 794
Income taxes payable (528) (229) 377
---------------------------------------
Net cash provided by operating activities 16,136 14,462 10,987
INVESTING ACTIVITIES
Additions to property, equipment and leasehold
improvements (39,864) (22,170) (12,460)
Proceeds from sale of fixed assets 42 2,529 483
Increase in deposit (3,000)
Purchase of business, net of cash acquired (316) (1,800) 108
---------------------------------------
Net cash used in investing activities (40,138) (24,441) (11,869)
FINANCING ACTIVITIES
Proceeds from revolving line of credit 60,950 39,895 31,735
Principal payments on debt and capital lease
obligations (56,570) (30,780) (30,417)
Issuance of Common Stock 22,564
Purchase of Treasury Stock (2,900)
Exercise of stock options 302 827 122
---------------------------------------
Net cash provided by financing activities 24,346 9,942 1,440
---------------------------------------
Increase (decrease) in cash 344 (37) 558
Cash at beginning of year 961 998 440
---------------------------------------
Cash at end of year $ 1,305 $ 961 $ 998
=======================================
See accompanying notes.
5
106
Uno Restaurant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
October 1, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Uno Restaurant
Corporation and its wholly-owned subsidiaries (the Company). All intercompany
accounts and transactions have been eliminated in consolidation. Company-owned
restaurants are located predominately in the Northeast and Mid-Atlantic states
and franchised restaurants are located throughout the United States.
FISCAL YEAR
The Company's fiscal year ends on the close of business on the Sunday closest to
September 30 in each year. The fiscal year ended October 3, 1993 included 53
weeks of operations.
INVENTORY
Inventory, which consists of food, beverages and store supplies, is stated at
the lower of cost (first-in, first-out method) or market.
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Property, equipment and leasehold improvements are recorded at cost. The Company
provides for depreciation of buildings and equipment over their estimated useful
lives using the straight-line method. Leasehold improvements are amortized over
the shorter of their estimated useful lives or the term of the lease using the
straight-line method.
REVENUE RECOGNITION-FRANCHISE FEES
The Company defers franchise fees until the franchisee opens the restaurant and
all services have been substantially performed; at that time, the entire amount
of the fee is recorded as income. Royalty income is recorded as earned based on
rates provided by the
6
107
Uno Restaurant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
respective franchise agreements. Expenses related to franchise activities
amounted to approximately $1,889,000, $1,427,000 and $1,210,000 in fiscal years
1995, 1994 and 1993, respectively.
A summary of full-service franchise unit activity is as follows:
YEAR ENDED
-----------------------------------------
OCTOBER 1 OCTOBER 2 OCTOBER 3
1995 1994 1993
-----------------------------------------
Units operating at beginning of year 59 58 59
Units opened 5 5 3
Units closed (5) (1) (2)
Units converted to Company-owned units (3) (2)
-----------------------------------------
Units operating at end of year 59 59 58
=========================================
PRE-OPENING COSTS
Costs relating to the opening of new restaurants are deferred until the
restaurants open and are amortized over 12 months from that point using the
straight-line method.
INCOME TAXES
In fiscal years 1995 and 1994, deferred income taxes are recognized for
temporary differences between financial statement and income tax bases of assets
and liabilities for which income tax benefits and obligations will be realized
in future years. In fiscal year 1993, the provision for deferred income taxes
represents the tax effect of differences in the timing of income and expense
recognition for tax and financial statement purposes.
7
108
Uno Restaurant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
EARNINGS PER COMMON SHARE
Earnings per common share amounts are calculated based upon the weighted-average
number of shares outstanding, giving effect to the dilutive effect of stock
options. Average shares outstanding and all per share amounts included in the
accompanying consolidated financial statements and notes thereto are based on
the increased number of shares, giving retroactive effect to the five-for-four
stock split in fiscal year 1995 (see Note 7).
RECLASSIFICATIONS
Certain amounts in the accompanying 1994 and 1993 financial statements have been
reclassified to permit comparison with 1995.
2. BUSINESS ACQUISITIONS AND DISPOSITIONS
In December 1994, the Company completed an agreement with Bay Street
Restaurants, Inc. to purchase the net assets of three restaurants located in
Illinois, New Jersey and Pennsylvania. In December 1993, the Company acquired
the leasehold improvements and equipment of three franchised restaurants in
Connecticut. These acquisitions have been accounted for under the purchase
method of accounting. The results of operations of the acquired companies prior
to the dates of acquisition would not have a material impact on the consolidated
results of operations in fiscal years 1995, 1994 and 1993.
During 1995, the Company assigned its leasehold interest in its Fairview
Heights, Illinois restaurant to an unaffiliated party in exchange for the
leasehold interest in that unaffiliated party's restaurant located in Orlando,
Florida. The Company recorded the transaction at fair market value, and wrote
off the net book value of equipment no longer usable.
On November 8, 1993, the Company sold to a franchisee for $2,500,000 a Pizzeria
Uno restaurant in Lake Buena Vista, Florida and recorded a gain of $312,000,
which has been included in other income in fiscal year 1994.
8
109
Uno Restaurant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (continued)
3. PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Property, equipment and leasehold improvements consist of the following:
OCTOBER 1 OCTOBER 2
1995 1994
--------------------------
(In thousands)
Land $ 11,093 $ 7,601
Buildings 18,056 9,729
Equipment 42,430 31,797
Leasehold improvements 74,011 55,657
Construction in progress 3,263 2,870
-------------------------
148,853 107,654
Less allowances for depreciation and amortization 36,355 27,597
-------------------------
$112,498 $ 80,057
=========================
4. RELATED-PARTY TRANSACTIONS
The Company leases three buildings from its principal shareholder for a
restaurant and for corporate office space. Rent expense in the amount of
approximately $442,000 was charged to operations in each of the fiscal years
presented. The Company believes that the terms of these leases approximate fair
rental value.
The Company's President and his brother own and operate three franchised
restaurants. Additionally, the Chairman of the Company owns a 50% interest in a
franchised pizza takery, and one of the directors of the Company has a
partnership interest in a franchised restaurant. These franchisees pay royalties
to the Company under standard franchise agreements, with the exception of the
pizza takery, which is being operated as a test concept and, as a result, is not
currently being charged royalties.
5. LEASES
The Company conducts the majority of its operations in leased facilities, which
are accounted for as capital or operating leases. The leases typically provide
for a base rent plus real estate taxes, insurance and other expenses, plus
additional contingent rent based
9
110
Uno Restaurant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (continued)
5. LEASES (CONTINUED)
upon revenues of the restaurant. Contingent rent amounted to $1,017,000,
$981,000 and $842,000 in fiscal years 1995, 1994 and 1993, respectively. At
October 1, 1995, the minimum rental commitments under all noncancelable capital
and operating leases with initial or remaining terms of more than one year are
as follows:
OPERATING CAPITAL
FISCAL YEAR LEASES LEASES
-----------------------------
(In thousands)
1996 $ 8,334 $ 130
1997 8,741 130
1998 8,647 130
1999 8,457 130
2000 8,398 93
Thereafter 83,869 1,293
-----------------------------
$126,446 1,906
============
Less amount representing interest 1,086
--------
Present value of net minimum lease payments 820
Less current portion of obligation under capital leases 71
--------
Long-term obligation under capital leases $ 749
========
Total expenses for all leases were as follows:
CAPITAL
CAPITAL LEASE LEASE ASSET OPERATING
FISCAL YEAR INTEREST AMORTIZATION LEASE RENTALS
-------------------------------------------
(In thousands)
1995 $63 $71 $11,509
1994 51 58 10,193
1993 41 44 9,337
Certain operating lease agreements contain free rent inducements and scheduled
rent increases which are being amortized over the terms of the agreements,
ranging from 15 to 20 years, using the straight-line method. The deferred rent
liability, included in other liabilities, amounted to $3,296,000 at October 1,
1995 and $2,659,000 at October 2, 1994.
10
111
Uno Restaurant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (continued)
6. FINANCING ARRANGEMENTS
Long-term debt consists of the following:
OCTOBER 1 OCTOBER 2
1995 1994
----------------------
(In thousands)
Revolving credit and note agreement $21,750 $13,969
10.22% senior notes payable to Cigna Insurance
Company 3,333 6,667
---------------------
25,083 20,636
Less current portion 3,333 3,333
---------------------
$21,750 $17,303
=====================
The Company has a $50,000,000 unsecured revolving line of credit which converts
to a three-year term loan in December 1997. The Company is entitled to borrow at
its discretion amounts which accrue interest at variable rates based on either
the LIBOR or prime rate. At October 1, 1995, interest on outstanding borrowings
ranged from 6.87% to 8.75%. A commitment fee of approximately .33% is accrued on
unused borrowings under the credit agreement. The note agreements contain
certain financial and operating covenants, including maintenance of certain
levels of net worth and income.
The Company made cash payments of interest of $2,445,000, $1,465,000 and
$1,219,000 during fiscal years 1995, 1994 and 1993, respectively. The Company
capitalized interest during the construction period of newly constructed
restaurants amounting to $509,000 in fiscal year 1995, $228,000 in fiscal year
1994 and $186,000 in fiscal year 1993 and included those amounts in leasehold
improvements.
11
112
Uno Restaurant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (continued)
6. FINANCING ARRANGEMENTS (CONTINUED)
The Company provides certain limited lease financing to qualified franchisees
through an agreement with an unaffiliated finance company. The Company's maximum
guarantee under the agreement was $1,993,000 at October 1, 1995. The Company has
also guaranteed up to a maximum of $431,000 of future lease payments in the
event of default by specific franchisees.
The Company has an outstanding letter of credit in the amount of $150,000 at
October 1, 1995, which expires in December 1996.
7. COMMON STOCK TRANSACTIONS
On November 15, 1994, the Board of Directors of the Company declared a
five-for-four stock split payable to shareholders on February 28, 1995. In the
third quarter of fiscal 1995, the Company obtained $22.6 million in exchange for
2.3 million shares of common stock in connection with a secondary common stock
offering.
In July 1995, the Board of Directors authorized the purchase of up to 500,000
shares of the Company's common stock in the open market. Under this arrangement,
the Company purchased 358,100 shares as treasury stock during fiscal year 1995.
Subsequent to year end, the Board of Directors increased its authorization to
purchase up to a total of 1.5 million shares of the Company's common stock in
the open market.
8. PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets consist of the following:
OCTOBER 1 OCTOBER 2
1995 1994
-------------------------
(In thousands)
Prepaid insurance $ 821 $ 621
Prepaid rent 359 202
Prepaid other 233 100
Other accounts receivable 808 609
---------------------
$2,221 $1,532
=====================
12
113
Uno Restaurant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (continued)
9. ACCRUED EXPENSES
Accrued expenses consist of the following:
OCTOBER 1 OCTOBER 2
1995 1994
--------------------------
(In thousands)
Accrued rent $1,290 $1,380
Accrued insurance 778 459
Accrued utilities 616 539
Accrued vacation 330 175
Accrued interest 210 282
Other 689 1,161
-----------------------
$3,913 $3,996
=======================
10. EMPLOYEE BENEFIT PLANS
The Company maintains a 401(k) Savings and Employee Stock Ownership Retirement
Plan (the Plan) for all of its eligible employees. The Plan is maintained in
accordance with the provisions of Section 401(k) of the Internal Revenue Code
and allows all employees with at least six months of service to make annual
tax-deferred voluntary contributions up to 15% of their salary. Under the Plan,
the Company matches a specified percentage of the employees' contributions,
subject to certain limitations, and makes annual discretionary contributions of
the Company's Common Stock. Total contributions made to the plans were $153,000,
$110,000 and $25,000 in fiscal years 1995, 1994 and 1993, respectively.
The Company sponsors a Deferred Compensation Plan which allows officers to defer
up to 20% of their annual compensation. These assets are placed in a rabbi trust
and are presented as assets of the Company in the accompanying balance sheet as
they are available to the general creditors of the Company in the event of the
Company's insolvency. The related liability of $426,000 at October 1, 1995 is
included in other liabilities in the accompanying balance sheet. Deferred
compensation expense in the amounts of $173,000 and $265,000 were recorded in
fiscal year 1995 and 1994, respectively.
13
114
Uno Restaurant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (continued)
11. INCOME TAXES
Effective October 4, 1993, the Company adopted Financial Accounting Standards
Board (FASB) Statement No. 109 (Statement 109). As permitted by Statement 109,
the Company has elected not to restate the financial statements of any prior
years. The effect of the change on net income for fiscal 1994, as well as the
cumulative effect, was not material.
Deferred taxes are attributable to the following temporary differences:
OCTOBER 1 OCTOBER 2
1995 1994
-------------------------
(In thousands)
DEFERRED TAX ASSETS:
Deferred rent $1,337 $1,087
Accrued expenses 204 277
Franchise fees 100 101
Depreciation 38 350
Other 267 473
---------------------
Total deferred tax assets 1,946 2,288
DEFERRED TAX LIABILITIES:
Deferred pre-opening costs 484 313
Prepaid insurance 232 172
Royalty fee 76 92
Other 3 269
---------------------
Total deferred tax liabilities 795 846
---------------------
NET DEFERRED TAX ASSETS $1,151 $1,442
=====================
14
115
Uno Restaurant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (continued)
11. INCOME TAXES (CONTINUED)
The provision (credit) for income taxes consisted of the following:
DEFERRED
LIABILITY METHOD METHOD
------------------------------------------
YEAR ENDED
------------------------------------------
OCTOBER 1 OCTOBER 2 OCTOBER 3
1995 1994 1993
------------------------------------------
(In thousands)
Current:
Federal $3,098 $2,536 $2,490
State 841 607 771
----------------------------------------
3,939 3,143 3,261
Deferred:
Federal 228 243 (370)
State 63 304 (54)
----------------------------------------
291 547 (424)
----------------------------------------
Income tax expense $4,230 $3,690 $2,837
========================================
A reconciliation of the effective tax rates with the federal statutory rates is
as follows:
DEFERRED
LIABILITY METHOD METHOD
------------------------------------------
YEAR ENDED
------------------------------------------
OCTOBER 1 OCTOBER 2 OCTOBER 3
1995 1994 1993
------------------------------------------
Federal statutory rate 34.1% 34.0% 34.0%
State income taxes, net of federal income
tax benefit 4.9 6.0 6.7
Tax credits (2.6) (1.8)
Other .6 .9 (.2)
-----------------------------------
Effective income tax rate 37.0 % 39.1% 40.5%
===================================
15
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Uno Restaurant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (continued)
11. INCOME TAXES (CONTINUED)
The Company made income tax payments of $3,667,000, $3,779,000 and $2,826,000
during fiscal years 1995, 1994 and 1993, respectively.
12. STOCK OPTION PLANS
The 1987 Employee Stock Option Plan (the Plan) provides for up to 1,875,000
shares of common stock issuable upon exercise of options granted under the Plan.
Options may be granted at an exercise price not less than fair market value on
the date of grant. All options vest at a rate of 20% per year beginning one year
after the date of grant, with the exception of 93,750 and 62,500 options granted
to the President and Chairman of the Company, respectively, which vest
immediately at the date of grant. All options terminate ten years after the date
of grant, with the exception of the 175,000 options granted to the Chairman,
which terminate five years after the date of grant. Options outstanding at
October 1, 1995 are non-qualified stock options.
The 1989 and 1993 Non-Qualified Stock Option Plans for Non-Employee Directors
(the Directors Plans) provide for up to 101,563 shares of Common Stock issuable
upon exercise of options granted under the Directors Plans. The 1989 and 1993
Directors Plans terminate on November 10, 1999 and August 17, 2002,
respectively, but such termination shall not affect the validity of options
granted prior to the dates of termination. Options are to be granted at an
exercise price equal to the fair market value of the shares of Common Stock at
the date of grant. Options granted under the Directors Plans may be exercised
commencing one year after the date of grant and ending ten years from the date
of grant.
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117
Uno Restaurant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (continued)
12. STOCK OPTION PLANS (CONTINUED)
Information regarding the Company's stock option plans, updated to reflect the
five-for-four stock split described in Note 7, is summarized below:
YEAR ENDED
----------------------------------------------
OCTOBER 1 OCTOBER 2 OCTOBER 3
1995 1994 1993
----------------------------------------------
Options outstanding at beginning of period 1,043,735 960,483 713,013
Granted 277,489 257,298 334,966
Exercised (at $4.07 to $8.64 per share) (41,400) (120,101) (24,313)
Canceled (79,537) (53,945) (63,183)
---------------------------------------------
Options outstanding at close of period 1,200,287 1,043,735 960,483
=============================================
Option price range at close $4.07 $4.07 $4.07
of fiscal year to $11.80 to $11.40 to $11.40
Options exercisable at close of period 538,932 430,249 444,126
Options available for grant at close of period 481,496 679,448
13. QUARTERLY FINANCIAL DATA (UNAUDITED)
QUARTER ENDED
---------------------------------------------------
JANUARY 1 APRIL 2 JULY 2 OCTOBER 1
1995 1995 1995 1995
---------------------------------------------------
(Amounts in thousands, except per share information.)
Revenues $35,976 $37,151 $41,536 $44,043
Gross profit (1) 7,773 7,771 9,466 10,519
Operating income 2,786 2,555 3,527 4,509
Income before income taxes 2,415 1,972 2,940 4,106
Net income 1,520 1,243 1,852 2,588
Earnings per common share .13 .11 .15 .19
17
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Uno Restaurant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (continued)
13. QUARTERLY FINANCIAL DATA (UNAUDITED) (CONTINUED)
QUARTER ENDED
------------------------------------------------------
JANUARY 2 APRIL 3 JULY 3 OCTOBER 2
1994 1994 1994 1994
------------------------------------------------------
(Amounts in thousands, except per share information.)
Revenues $27,567 $28,028 $32,259 $36,211
Gross profit (1) 5,501 5,575 6,903 8,512
Operating income 1,755 1,771 2,639 4,126
Income before income taxes 1,780 1,483 2,362 3,821
Net income 1,059 882 1,490 2,325
Earnings per common share .09 .08 .13 .20
(1) Restaurant and consumer product sales, less cost of food and beverages,
labor and benefits, occupancy, and other operating expenses, excluding
advertising expenses.
14. SUBSEQUENT EVENT
On October 26, 1995, the Company entered into a five year interest rate swap
agreement involving the exchange of floating rate interest payment obligations
for fixed rate interest payment obligations. The notional amount of this
interest rate swap agreement was $20 million. The Company entered into this
agreement in order to manage interest costs and risks associated with
fluctuating interest rates. In the event that a counterparty fails to meet the
terms of the interest rate swap agreement, the Company's exposure is limited to
the interest rate differential. The Company has executed this agreement with a
creditworthy institution and considers the risk of nonperformance to be remote.
18
119
ATTACHMENT D
CONTRACTS
120
Revised as of December 22, 1995
PIZZERIA UNO
UNIT FRANCHISE AGREEMENT
BETWEEN
PIZZERIA UNO CORPORATION
AND
--------------------------------
FOR
FULL-SERVICE RESTAURANT
THE SUCCESS OF THE BUSINESS VENTURE CONTEMPLATED HEREIN INVOLVES SUBSTANTIAL
RISKS AND DEPENDS UPON THE ABILITY OF FRANCHISEE AS AN INDEPENDENT BUSINESS
PERSON AND THE ACTIVE PARTICIPATION OF FRANCHISEE IN THE DAILY AFFAIRS OF THE
BUSINESS. NO ASSURANCE OR WARRANTY, EXPRESS OR IMPLIED, CAN BE GIVEN AS TO THE
POTENTIAL SUCCESS OF SUCH BUSINESS VENTURE OR THE GROSS REVENUES, VOLUME, OR
EARNINGS LIKELY TO BE ACHIEVED. NO STATEMENT, REPRESENTATION, OR OTHER ACT,
EVENT, OR COMMUNICATION, EXCEPT AS SET FORTH HEREIN, IS BINDING ON FRANCHISOR IN
CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT.
BEFORE SIGNING THIS AGREEMENT, THE FRANCHISEE SHOULD READ IT CAREFULLY WITH THE
ASSISTANCE OF LEGAL COUNSEL.
121
TABLE OF CONTENTS
ARTICLE PAGE
1. Certain Definitions.................................................................................... 1
2. Franchisor's System.................................................................................... 2
3. Grant of License; Approved, Required, and Optional Products............................................ 3
4. License Term and Extension Periods..................................................................... 4
5. License Fee............................................................................................ 5
6. Gross Revenues......................................................................................... 5
7. Records, Information Systems and Audits; Late Payment Charge.......................................... 6
8. Advertising............................................................................................ 7
9. Services by Franchisor................................................................................. 11
10. Location of Outlet; Lease; Construction; Opening for Business.......................................... 11
11. Maintenance and Upgrading of Outlet.................................................................... 13
12. Confidential Manuals................................................................................... 13
13. Compliance with Standards.............................................................................. 14
14. Purchase of Equipment and Supplies..................................................................... 17
15. Insurance and Indemnification.......................................................................... 18
16. Intellectual Properties................................................................................ 19
17. Lease Termination, Condemnation, and Casualty.......................................................... 21
18. Restrictions on Competition............................................................................ 22
19. Termination of License................................................................................. 23
20. Assignment............................................................................................. 25
122
21. Option to Purchase..................................................................................... 28
22. Bankruptcy or Insolvency............................................................................... 29
23. Security Interest...................................................................................... 32
24. Miscellaneous.......................................................................................... 32
Ancillary Agreement: Guarantee (to be provided if Franchisee does not meet
certain standards of Franchisor regarding financial status and operating
history)
Exhibit A: Approved Product List
Exhibit B: Registered Trademarks and Service Marks
Exhibit C: Pizzeria Uno Variable Royalty Plan
123
In consideration of the mutual promises contained herein, and
intending to be legally bound, Franchisor and Franchisee hereby agree as
follows:
1. Certain Definitions.
As used herein, the following terms shall have the meanings set forth
below unless the context otherwise requires:
(a) Franchisor: Pizzeria Uno Corporation, a Delaware
corporation.
(b) Franchisor's Address: 100 Charles Park Road, West
Roxbury, Massachusetts 02132-4985.
(c) Franchisee:__________________________________
__________________________________
__________________________________
Control Person(s):___________________________
(See Article 13)_____________________________
(d) Franchisee's Address:________________________
________________________
(e) Territory: Franchisee is granted limited exclusive rights
as described in Article 3 of this Agreement within the circular geographic area
which has as its center the Outlet Location and either (i) has a radius of three
(3) miles, or (ii) within which 100,000 people reside and/or work, whichever
area contains fewer square miles.
(f) Outlet Location: Each Unit Franchise Agreement is limited
to a specific place of business (referred to as an "Outlet") in a defined trade
area. "Outlets", as a group, refer to Pizzeria Uno full-service restaurants,
whether or not operated by Franchisee or Franchisor or its affiliates.
(g) The premises located on the real property at the following
address: __________________________________________________
__________________________________________________;
;
or,
(i) A location to be designated in the following trade
area:
__________________________________________________
__________________________________________________;
(h) License Term: Twenty (20) Years commencing on the
Franchise Agreement Date plus any extension(s) thereof pursuant to Article 4.
(i) Extension Periods: Three (3) successive periods of Ten
(10) years each; see Article 4.
124
(j) Unit Franchise Fee: Thirty Thousand Dollars ($30,000),
payable upon execution hereof for one Outlet. This fee is non-refundable.
(k) Continuing License Fee: Five (5%) percent of Gross
Revenues (as defined in Article 6) or a percentage of Gross Revenues determined
in accordance with the Pizzeria Uno Variable Royalty Plan (Exhibit C to this
Agreement), but in either instance not less than the Minimum Continuing License
Fee, payable on or prior to the 25th day of each month in respect of the
previous month's Gross Revenues; see Article 5.
(l) Minimum Continuing License Fee: One Thousand Dollars
($1,000.00) per month (or a pro-rata portion thereof for any partial month of
operation) commencing in the month the Outlet first opens for business.
(m) Business Co-op Fee: Up to, but not more than, one (1%)
percent of Gross Revenues; as defined in Article 8.
(n) Minimum Local Advertising Expense: A minimum of two (2%)
percent of Gross Revenues; as described in Article 8.
(o) System Wide Media Fund Fee: Up to, but not more than, one
percent (1%) of Gross Revenues; as described in Article 8.
(p) Outlet Open for Business Date: __________________. See
Article 10.
(q) Unit Franchise Agreement Date: __________________.
(r) Intellectual Properties: Certain trademarks, service
marks, trade names, trade secrets, logotypes, commercial symbols, patents,
copyrights, and all related practices, procedures, methods, devices, techniques,
designs, and trade dress now or hereafter adopted by Franchisor for use in
identifying the System, as they may be modified by Franchisor from time to time,
including without limitation the marks set forth on Exhibit B. See Article 16.
(s) Related Agreements and Exhibits: (i) Franchise Offering
Circular Revised as of: December 30, 1995; (ii) Area Development Agreement, if
applicable; and
(iii) Personal Guarantee of:___________________________.
(t) Transfer Fee: Two Thousand Dollars ($2,000), payable upon
assignment of the franchise by Franchisee; see Article 20.
2. Franchisor's System.
As a result of the expenditure of time, skill, effort, and money,
Franchisor has developed a distinctive system (the "System") relating to the
establishment, operation, and marketing of food service facilities featuring
"Chicago Style" deep dish pizza and other products. The distinguishing
characteristics of the System include, without limitation, distinctive exterior
and interior designs, decors, color schemes, and furnishings; secret recipes and
special menu items, uniform standards, specifications, and procedures for
operations;
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quality and uniformity of products and services offered; procedures for
inventory, management and financial control; training and assistance; and
advertising and promotional programs; all of which may be changed, improved, and
further developed by Franchisor from time to time. Franchisor has also developed
and owns the rights to the Intellectual Properties. Franchisee recognizes the
value of the System, the Intellectual Properties and continued uniformity of
image to itself, to Franchisor, and to other franchisees of Franchisor. In order
to enhance the value of the System and the food service facilities operating
under the System, as well as the Intellectual Properties, and goodwill
associated therewith, this Agreement places detailed and substantial obligations
on Franchisee, including strict adherence to Franchisor's reasonable present and
future requirements regarding menu items, advertising, physical facilities, and
related matters. Future improvements may be required in the Outlet, and certain
provisions of this Agreement apply to other Uno outlets under common control
with the Outlet. The rights granted to Franchisee are for a limited time. Their
value derives principally from certain of Franchisor's Intellectual Properties
and associated goodwill, designs, systems, and processes developed at
considerable expense and effort.
3. Grant of License; Approved, Required, and Optional Products.
3.1 Subject to the limitations contained in this Agreement, Franchisor
hereby grants to Franchisee during the License Term the right and license (the
"License") and Franchisee hereby accepts the right and obligation, to (i)
establish and operate an Outlet under the System and the Intellectual Properties
in accordance with this Agreement, (ii) to prepare and market only Approved
Products at the Outlet only in connection with products and services meeting
Franchisor's quality standards, and (iii) such additional activities as are
specified in Article 3.3.
3.2 The Approved Products consist of Required Products and Optional
Products. Required Products are the initial Required Products and other products
(as periodically dictated by Franchisor in writing) incorporated into the System
in accordance with Article 13.5. Optional Products are products which are
authorized for sale under trademarks, but are not required to be sold. As
additional Optional Products are introduced by Franchisor, Franchisor will give
notice of the time and manner of introduction. Franchisee must seek the written
approval of Franchisor for additional Optional Products. If Franchisor approves
in writing, at its sole discretion, upon review of Franchisee's specifications,
Franchisee may also sell at the Outlet high quality food items for which
Franchisor does not presently have specifications. The Approved Products and the
Intellectual Properties presently authorized for use are shown on Exhibit A and
Exhibit B, respectively.
3.3 The License does not include the right to sell any product for
resale, the right to sell any product at or from any place except the Outlet, or
the right to prepare any Approved Product at any place other than the Outlet.
This License also does not include the right to deliver products beyond the
Territory. Provided, that Franchisee may engage in catering and special event
sales in strict accordance with Franchisor's catering and special event
procedures, which procedures are subject to change from time to time by
Franchisor. Franchisee shall give Franchisor at least thirty (30) days (or such
shorter period as may be reasonable under the circumstances) advance notice of
any special event sale (such as fairs,
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athletic events, and conventions). Provided further, that Franchisee may engage
in delivery sales in accordance with procedures and standards established by
Franchisor.
3.4 During the License Term, Franchisor shall not use or license others
to use any of the Intellectual Properties within the Territory (as defined in
Article 1) except as elsewhere specified in this Article 3.
3.5 Franchisor and its affiliates reserve the right to sell or license
others to sell, within the Territory, the following regardless of any impact on
the Outlet:
(a) through quick-service restaurants or otherwise, food
products which bear different trade names, trademarks, and service marks from
those licensed hereunder; or
(b) any food products sold through grocery or convenience
stores, or through other outlets that are primarily for retail goods, or
products sold through mail order or catalogue, including products which bear the
trade names, trademarks, and service marks; or
(c) any food products of any trade name within hotels,
theaters or other outlets that serve a primary target market residing or working
within the four walls of one facility; or
(d) any food products which bear the trade names, trademarks,
and service marks at special events; Franchisor must provide Franchisee with
thirty (30) days notice of any special event sale, and Franchisee shall have ten
(10) days following its receipt of such notice to elect to participate in that
special event; or
(e) any goods or services, other than food products, which are
identified by any marks, including the Intellectual Properties, through any
method of distribution.
3.6 Franchisor may franchise, license, or allow the use of any of the
Intellectual Properties anywhere outside of the Territory regardless of any
impact on the Outlet.
4. License Term and Extension Periods.
This Agreement shall be in effect for the License Term set forth in
Article 1 hereof. At the expiration of the License Term or any extension
thereof, Franchisee may, by written notice to Franchisor at least six (6)
months, but not more than twelve (12) months, prior to the expiration of the
License Term or any extension thereof, extend the License Term for the Extension
Periods up to a maximum aggregate period of fifty (50) years, provided that at
the time of such expiration:
(a) Franchisee shall not have failed to remedy any breach
specified by Franchisor in any notice hereunder;
(b) Subject to the terms of Articles 11.2 and 11.3, Franchisee
shall agree to make such capital expenditures as may be reasonably required to
renovate and modernize the Outlet, its signs, and its equipment so as to reflect
the image of Uno outlets;
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(c) Subject to the terms of Articles 11.2 and 11.3, if
renovation and modernization of the Outlet are not possible or feasible,
Franchisee shall relocate the Outlet within the Territory or such other area as
may be approved by Franchisor, in writing;
(d) Franchisee shall execute a new Unit Franchise Agreement in
the form then being used by Franchisor, but without payment of any Unit
Franchise Fee, any increase in the Continuing License Fee, or any change in
renewal or assignment provisions;
(e) All monetary obligations owed to Franchisor, its
subsidiaries, and its affiliates, to all trade creditors of Franchisee, and to
Franchisee's landlord (if any) must be current; and
(f) Franchisee shall not have committed two or more breaches
of this Agreement of a substantial nature within the twenty four (24) months
preceding the extension.
5. License Fee.
5.1 Upon the execution hereof, Franchisee shall pay to Franchisor the
non-refundable Unit Franchise Fee.
5.2 In the event no site is designated and approved pursuant to Article
10, and a lease or purchase agreement is not executed with respect to the Outlet
premises within six (6) months after the Unit Franchise Agreement Date, then
Franchisee or Franchisor may terminate this Agreement in accord with the
provisions of Article 10.1, in which event the Unit Franchise Fee will not be
refunded, and this Agreement shall be null and void.
5.3 Upon the opening of the Outlet for business, on or before the 25th
day of each month, Franchisee shall, with or without notice from Franchisor, pay
to Franchisor the non-refundable Continuing License Fee for the immediately
preceding month or partial month, but not less than the non-refundable Minimum
Continuing License Fee. Each such payment shall be accompanied by a statement as
to the relevant Gross Revenues, and the statement shall be in such form and
detail as may be requested by Franchisor from time to time.
6. Gross Revenues.
6.1 No mention of products or services in this Article is intended to
mean or imply that such products or services are approved for sale at the
Outlet.
6.2 For purposes of this Agreement, Gross Revenues includes the total
of all monies and receipts derived from products prepared or sold, and services
performed, at the Outlet, at special events, or from catering, from all sales
and orders made, solicited, or received at the Outlet or at special events, and
from all other business whatsoever conducted at or from the Outlet, whether such
revenues are evidenced by cash, credit, checks, gift certificates, scrip, food
stamps, coupons (but see Subarticle 6.3(b) below), services, property, or other
means of barter or exchange, and whether such sales are of food, beverages,
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tobacco products, vending machine items, services, merchandise, or products of
any nature whatsoever.
6.3 Gross Revenues shall not include: (a) sales taxes or other taxes
measured on the basis of the gross revenues of the business, imposed by
governmental authorities directly on sales and collected from customers,
provided, such taxes are in fact, paid by Franchisee to the appropriate
governmental authorities, (b) promotional or discount coupons, but only to the
extent that Franchisee realizes no revenue therefrom, (c) tips collected and
paid by Franchisee to employees, or (d) employee meals, to the extent not paid
for by an employee. Cash refunded and credit given to customers (not including
receivables uncollectible from customers) shall be deducted in computing Gross
Revenues, to the extent that such cash, credit, or receivables represent amounts
previously included in Gross Revenues on which a Continuing License Fee was
paid. However, Franchisee is not permitted to reduce gross revenues by netting
out associated expenses, e.g., if a Franchisee sells products to a delivery
service for a discounted price, and the delivery service collects the full price
from the customer, Franchisee must include the full price in gross revenues.
Similarly, credit card fees may not be deducted either. Franchisor views these
items as an expense or cost of doing business, rather than a "discount," and
gross revenues may not be reduced by expenses or costs of doing business.
6.4 Gross Revenues shall be deemed received by Franchisee at the time
the products, merchandise, or services from which they derive are delivered or
rendered, or at the time the relevant sale takes place, whichever occurs first.
Gross Revenues consisting of property or services shall be valued at the retail
prices applicable and in effect at the time such Gross Revenues are received.
7. Records, Information Systems and Audits; Late Payment Charge.
7.1 Franchisee shall, in a manner and form satisfactory to Franchisor,
prepare, on a current basis, complete and accurate records concerning Gross
Revenues and all financial, operating, marketing, and other aspects of the
Outlet and the business conducted under this Agreement, and maintain an
accounting system which fully and accurately reflects all aspects of the Outlet
and such business, including such uniform standards and reports as may be
required by Franchisor. Such records shall include, but not be limited to, books
of account, tax returns, daily reports, statements of Gross Revenues (to be
prepared each month for the preceding month), profit and loss statements (to be
prepared at least quarterly), and balance sheets (to be prepared at least
annually), cash register reports, including the electronic journal and used
guest checks. Franchisee also shall submit to Franchisor current financial
statements and such other reports as Franchisor reasonably may request in order
to evaluate or compile research data on any aspect of the Outlet or its
business. All financial data, with respect to Franchisee's business, required to
be submitted to Franchisor shall be for Franchisor's use, and shall be kept
confidential by Franchisor and not distributed or otherwise made available to
other Franchisees, prospective Franchisees, or third parties, except as
necessary for generating financial information to be used among franchisees and
company personnel in analyzing and comparing area restaurant performances
without identifying individual restaurants, or to support earnings claims in
Franchisor's then current Uniform Franchise Offering Circular. The records
required under this Article 7.1 pertain only to Franchisee's operations of "Uno"
restaurants. Franchisor has no right to inspect,
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audit, or copy the records of Franchisee or of Franchisee's affiliates that
pertain to business activities unrelated to the Outlet or the Intellectual
Properties.
7.2 From the date hereof until three (3) years after the end of the
License Term, Franchisor or its authorized agent shall have the right to
request, receive, inspect, and audit, at all reasonable times, any or all of the
records referred to above, wherever they may be located. Franchisee agrees to
keep all records and reports for three (3) years from the date when made. If any
such inspection or audit discloses a deficiency in the payment of any royalty,
advertising fee, or other amount required to be paid under this Agreement,
Franchisee shall immediately pay the deficiency to Franchisor, provided the
deficiency exceeds $50.00, without prejudice to any other remedy of Franchisor
hereunder. In addition, if the deficiency for any audit period equals or exceeds
two (2%) percent of the correct amount of royalties or advertising fee due,
Franchisee shall also immediately pay to Franchisor the entire cost of such
inspection or audit (including but not limited to travel, lodging, meals,
salaries, and other expenses of the inspecting or auditing personnel), as well
as the costs of the next follow-up audit that Franchisor may perform. For the
purposes of this Article 7.2, an audit period shall be each full fiscal year of
Franchisor and, in the case of the fiscal year at the time of any audit, the
audit period shall commence at the beginning of that fiscal year and extend
through the most recently completed fiscal period (four or five weeks) of
Franchisor. If the audit discloses an overpayment of royalties, Franchisor will
promptly pay the amount of such overpayment to Franchisee, provided that the
amount exceeds $50.00.
7.3 To encourage prompt payment and to cover the costs and expenses
involved in handling and processing late payments, Franchisee also shall pay,
upon demand, a late payment charge at the rate of up to one and one-half
(1-1/2%) percent per month of all payments due to Franchisor pursuant to any
provision of this Franchise Agreement which are unpaid, but not more than the
highest rate permitted by law. Notwithstanding the foregoing, each failure to
pay license fees, advertising fees, and other amounts payable to Franchisor when
due may result in material breach of this Agreement pursuant to Article 19.3..
7.4 In order to facilitate preparation, accuracy and inspection of
records, as well as customer service, Franchisee shall fully utilize
Franchisor's designated computer hardware and software systems for point of sale
information and controls. Furthermore, Franchisee shall allow Franchisor access
to such systems for the purpose of sourcing information on operation of the
Outlet.
8. Advertising.
8.1 Upon the opening of the Outlet for business, and during the entire
License Term, Franchisee shall pay the non-refundable Business Co-op Fee to
Franchisor. This fee shall cover Franchisee's share of advertising, marketing,
training and inspection costs that are incurred by Franchisor for the benefit of
the System. These costs shall include, without limitation, the following:
salaries for people who are dedicated to ad development, marketing and
production support; assessments for administrative costs and overhead for such
people; costs for marketing, advertising, and production activities; training
films; inspections and related functions. Such payments will be made on or
before the 25th day
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of each month for the immediately preceding month. Franchisee recognizes that
Franchisor is under no obligation to ensure that expenditures to benefit the
System are proportionate to contributions of Franchisee for any given market and
that the manner in which these funds are spent shall be at the sole discretion
of Franchisor.
8.2 Franchisee agrees that Franchisor shall have the right, in its
discretion, to designate any geographical area (e.g., an area of dominant
influence or "ADI") as a region for purposes of establishing an advertising
association ("Association"). An Association may be composed of one or more Uno
restaurants operated by Franchisor and/or one or more Uno restaurants operated
by Franchisee or another franchisee of Franchisor. If an Association has been
established for the geographic area in which Franchisee's Outlet is located at
the time Franchisee commences business hereunder, Franchisee shall immediately
execute such documentation as required by Franchisor and become a member of such
Association. If an Association applicable to the Franchisee's Outlet is
established at any later time during the term of this Agreement, Franchisee
shall execute such documentation as required by Franchisor and become a member
of the Association no later than thirty (30) days after the date on which the
Association commences operation as provided below:
(a) Each Association shall be organized and governed in a form
and manner, and shall commence operation on a date, approved in advance by
Franchisor in writing.
(i) Each Association shall be organized for the
purposes of, and all contributions pursuant to Article 8.2(a)(iii) and any
earnings thereon shall be used exclusively to meet any and all costs for,
maintaining, directing and preparing advertising and/or promotional activities
(including, among other things, the cost of preparing and conducting television,
radio, magazine and newspaper advertising campaigns, direct mail and outdoor
billboard advertising; marketing surveys and other public relations activities;
employing advertising agencies to assist therein; and providing promotional
brochures and other marketing materials to the Outlet operated under the System)
in connection with regional advertising. Such monies shall also be used to
defray Franchisor's reasonable administrative costs and overhead as Franchisor
may incur in activities reasonably related to the administration or direction of
the Association or related to any advertising program conducted by or on behalf
of the Association. The Association is operated solely as a conduit for the
collection and expenditure of advertising contributions for the purposes stated
herein.
(ii) No advertising or promotional plans or materials
may be used by an Association or furnished to its members without the prior
approval of Franchisor. All such plans and materials shall be submitted to
Franchisor in accordance with the procedure set forth in Article 8.4 hereof.
(iii) Franchisee shall contribute to the Association
such amount as prescribed by the Association, at such times and in such manner
as prescribed by the Association, and shall submit to the Association and to
Franchisor such other statements or reports as may be required by Franchisor or
by the Association with Franchisor's prior written approval. Franchisee's
obligation to provide such statements or reports shall be subject to Article 7.
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(b) Franchisor, in its sole discretion, may grant to any
franchisee an exemption for any length of time from the requirement of
membership in an Association, upon written request of such franchisee stating
reasons supporting such exemption. Franchisor's decision concerning such request
for exemption shall be final.
8.3 No action taken by any Association shall diminish Franchisee's
obligations to pay the Business Co-op Fee or any other fee due to Franchisor
hereunder, but shall count toward Franchisee's Minimum Local Advertising Expense
obligations.
8.4 Franchisee shall submit a sample of each type of advertising
material to Franchisor prior to use, and, upon receipt of such material,
Franchisor shall have ten (10) working days to approve or disapprove the
material. If Franchisor takes no action within said ten (10) days, Franchisee
may use the material submitted. Franchisor may disapprove if, in its sole
discretion, the material is offensive, inaccurate, strategically inappropriate,
potentially harmful to the Intellectual Properties or otherwise injurious to the
Franchisor or Franchisees. Any expenditures for advertising that Franchisor has
not approved shall not be counted toward satisfaction of Franchisee's Minimum
Local Advertising Expense.
8.5 Franchisee shall install and, at all times during the term of this
Agreement, maintain an outdoor sign in a prominent location in accordance with
Franchisor's sign specifications in effect from time to time, or as approved, in
writing, by Franchisor, unless prohibited from doing so by applicable laws and
regulations. Franchisee shall use Franchisee's best efforts to obtain any permit
or variance required in order to allow the installation and maintenance of an
outdoor sign, as described herein.
8.6 During the License Term, Franchisee shall advertise, at all times,
in the classified or yellow pages of the local telephone directory under the
listings of "Restaurants" or "Pizza," using mats approved, in advance, by
Franchisor, and such advertising shall count toward Franchisee's Minimum Local
Advertising Expense obligations.
8.7 During the License Term, Franchisee shall, in addition to the
other requirements of this Article 8, expend, each year, an amount at least
equal to the Minimum Local Advertising Expense, on local advertising, public
relations, and promotion, subject to the requirements of Article 8.4. The food
discount cost of coupons or gift certificates shall not be counted in
calculating dollars spent to satisfy Minimum Local Advertising Expense. At the
request of Franchisor, Franchisee shall furnish, to Franchisor, an accurate
accounting of the previous month's expenditure on local advertising, public
relations, and promotion, in form and content satisfactory to Franchisor.
Franchisor, at its option, may make available to Franchisee all advertising and
promotional materials for other Outlets which are used by it, its affiliates, or
other franchisees on a regular basis.
8.8 Franchisor also reserves the right to assess the Franchisee for
contributions to a system wide media fund which shall be designed to facilitate
media market spending in a way that benefits the System through cooperative
purchasing of media, (the "System Wide Media Fund"). The System Wide Media Fund
can be implemented on a National, local or regional basis. Such assessment, if
made, shall be included in the calculation of Franchisee's Minimum Local
Advertising Expense. Upon establishment of the System Wide Media Fund by
Franchisor, Franchisee's obligations shall be as follows:
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(a) On the twenty-fifth (25th) day of each month during the
term of this Agreement, Franchisee shall contribute an amount designated by
Franchisor, but not to exceed one percent (1%) of Franchisee's Gross Revenues
for the preceding month for advertising and promotional purposes in the manner
provided in Article 6.
(b) Franchisee agrees that the System Wide Media Fund shall be
maintained and administered by Franchisor or its designee, as follows:
(i) Franchisor shall oversee all advertising and
promotional programs with sole discretion to approve or disapprove the creative
concepts, materials and media used in such programs, and the placement and
allocation thereof. Franchisee agrees and acknowledges that the System Wide
Media Fund is intended to maximize general public recognition and acceptance of
the Intellectual Properties for the benefit of the System.
(ii) The System Wide Media Fund, all contributions
thereto, and any earnings thereon shall be used exclusively by Franchisor to
purchase radio, television or print media on a local, regional or national
basis.
(iii) Franchisee shall contribute to the System Wide
Media Fund by separate check made payable to the System Wide Media Fund. All
sums paid by the Franchisee to the System Wide Media Fund shall be maintained in
an account separate from the other monies of Franchisor and shall not be used to
defray any of Franchisor's expenses, except for such reasonable administrative
costs and overhead as Franchisor may incur in activities reasonably related to
the administration or direction of the System Wide Media Fund and advertising
programs for franchisees and the System as set forth in Article 8.8(b)(ii)
hereof. The System Wide Media Fund and its earnings shall not otherwise inure to
the benefit of Franchisor. Franchisor or its designee shall maintain separate
bookkeeping accounts for the System Wide Media Fund.
(iv) It is anticipated that all contributions to and
earnings of the System Wide Media Fund shall be expended for advertising and/or
promotional purposes as described herein during the taxable year within which
the contributions and earnings are received. If, however, excess amounts remain
in the System Wide Media Fund at the end of such taxable year, all expenditures
in the following taxable year(s) shall be made first out of accumulated earnings
from previous years, next out of earnings in the current year, and finally from
contributions.
(v) The System Wide Media Fund shall not be an asset
of Franchisor or its designee. The System Wide Media Fund is operated solely as
a conduit for the collection and expenditure of advertising contributions for
the purposes stated herein. A statement of the operations of the System Wide
Media Fund as shown on the books of Franchisor or its designee shall be prepared
annually by Franchisor and shall be made available to Franchisee upon
Franchisee's request.
(vi) Although the System Wide Media Fund is intended
to be of perpetual duration, Franchisor maintains the right to terminate the
System Wide Media Fund. The System Wide Media Fund shall not be terminated,
however, until all monies in
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the System Wide Media Fund have been expended for advertising and/or promotional
purposes.
9. Services by Franchisor.
The Unit Franchise Fee and the Continuing License Fee are paid for the
License and not for services rendered by Franchisor, and any failure by
Franchisor to provide services shall not excuse Franchisee from paying the Unit
Franchise Fee or the Continuing License Fee. Franchisor shall offer to
Franchisee such initial and continuing services as Franchisor deems necessary or
advisable in connection with furthering the business of Franchisee and the
System, and in connection with protecting the Intellectual Properties and
goodwill of Franchisor, all within the sole and absolute discretion of Licensor.
Such initial and continuing services may include assistance in restaurant
layout, design, and equipment specification; on-site assistance with respect to
pre-opening and opening activities; the furnishing of the Confidential Operating
Manual and recipes, and updates thereto; the provision of operating advice and
training, pursuant to Article 13., at Franchisor's designated location (which
may be an operating outlet), or otherwise on a continuing basis through its
representatives; further refinement of products and equipment, and engineering
research and development which, in Franchisor's opinion, may be beneficial to
Franchisee's operations; recommending such accounting and business procedures
which Franchisor believes may be of value; and scheduling and holding, from time
to time, local, regional, and national meetings and seminars for the advancement
and dissemination of its methods in processing and marketing Approved Products.
Franchisor may, upon advance notice, make reasonable charges for services
provided to any Franchisee or group of Franchisees on an optional basis.
Franchisor may offer certain products for sale to its franchisees for use in
their operations, but is not bound to do so, except for ensuring (subject to
causes or conditions beyond Franchisor's control) a source for items which
incorporate Franchisor's trade secrets and are essential for the operation of
the Outlet.
10. Location of Outlet; Lease; Construction; Opening for Business.
10.1 If no location is specified for the Outlet in Article 1,
Franchisee, at its sole cost and expense, shall be responsible for locating and
designating a site for the Outlet within the area specified in Article 1, and
for constructing and equipping an Uno outlet at such location in accordance with
Franchisor's standards. Request for approval of such site along with a complete
site package, including demographic information, pro forma business plan and any
other information designated by Franchisor, shall be submitted, in writing prior
to commencement of negotiations or expenditures for such site, to Franchisor's
applicable Vice President for acceptance, which shall be deemed given if
Franchisor does not specify its objections, in writing, within twenty (20)
working days. Franchisee is solely responsible for taking all steps necessary to
obtain approval of and open the Outlet in timely fashion in accord with any
applicable development schedule agreed to in writing by Franchisor and
Franchisee. Franchisee and Franchisor acknowledge that the location of the
Outlet is a major factor in the Outlet's potential for success, and Franchisor
may reject any location in its discretion if the location does not meet
Franchisor's criteria for site selection. Franchisor makes no representations or
warranties with respect to the availability of appropriate locations, or the
suitability or potential of locations which it approves. Franchisor's approval
of a location merely reflects its bonafide belief that the proposed location
appears to be
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suitable for the development of an Uno restaurant. Franchisee shall provide
Franchisor with such information and data as Franchisor may reasonably request
in connection with its evaluation of the location, including, without
limitation, the cost of acquisition, development, and construction and, if the
property is to be leased by Franchisee, a copy of such lease. Any location
inspection shall be made solely at the option of Franchisor, and shall not be
deemed to impose any liability, obligation, or responsibility on Franchisor for
the construction of the Outlet or otherwise.
10.2 If the Outlet is to be leased by Franchisee, such lease shall be
subject to Franchisor's reasonable approval and shall provide: (i) that upon
termination of this Agreement for any reason provided in this Agreement,
Franchisor or its designee shall have the option, for thirty (30) days, to
assume the remaining obligations of Franchisee under the lease without
responsibility for any liability accruing pursuant to the lease prior to the
effective date of the assignment, or to execute a new lease for the remaining
term on the same or more favorable terms and conditions that existed between
landlord and Franchisee; (ii) that copies of all notices of default under the
lease shall be sent to Franchisor; (iii) that, in the event of Franchisee's
default under the lease, Franchisor or its designee shall have an opportunity to
cure such default and assume the remaining obligations of Franchisee under the
lease, but shall not have any obligation to do so; and (iv) that all signs,
advertising, logos, or other forms or insignia indicative of the System or
products, be removed from the premises demised under the lease in the event that
Franchisee, Franchisor, or its designee is not the tenant under the lease, or
upon termination of this Agreement.
10.3 Franchisee agrees to construct (or renovate) and equip the
Outlet, at Franchisee's expense, in a good and workmanlike manner, in conformity
with all applicable laws, rules, regulations, and requirements, and in
accordance with the guidelines of Franchisor, or, subject to
Franchisor's prior written approval, the plans and specifications of Franchisee.
All plans, specifications, or modifications proposed by Franchisee shall be
submitted to Franchisor within a reasonable time prior to the commencement of
construction, and shall be modified as reasonably requested by Franchisor.
Franchisee agrees to make such changes as recommended by Franchisor for periodic
improvement of equipment or facilities whenever feasible within the space and
configuration of the Outlet.
10.4 Franchisee will forthwith cause any mechanics' liens,
materialmen's liens, or other liens which may be recorded or perfected, or which
may otherwise attach to all or any portion of the Outlet, as a result of work
done by or for Franchisee, to be discharged or released of record, or fully
bonded. In the event that the Outlet is not open for business on or before the
Outlet Open for Business Date (see Subarticle 1(p) of this Agreement), other
than as a result of a "force majeure" or acts or omissions of Franchisor,
Franchisor may terminate this Agreement by thirty (30) days prior written notice
unless the Outlet shall open for business pursuant to the terms of this
Agreement within such thirty (30)-day period. For purposes of this Agreement,
"force majeure" shall mean certain events including, but not limited to, acts of
God, unforeseen unavailability of raw materials or supplies, inability or
unavoidable delay in obtaining necessary equipment, approvals, permits, or
licenses, and unavoidable labor disputes.
10.5 No Outlet may be opened until such time as Franchisor reasonably
agrees that all construction has been completed satisfactorily, that the
designated managers and all
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employees of Franchisee have been duly trained, that the Outlet is ready for
opening in all other respects (including, without limitation, menus, signboards,
inventory, uniforms, furniture, fixtures, and equipment), that the Unit
Franchise Fee has been paid in full, that certificates of insurance have been
furnished in accordance with Article 15, that Franchisee is in compliance with
all of the terms of this Agreement, including, without limitation, those set
forth in Article 13, and that all items contained in Franchisor's Opening
Checklist (contained in the latest version of the Confidential Operating Manual)
have been completed to Franchisor's satisfaction. Franchisee acknowledges that
any opening for business prior to satisfaction of all of the foregoing
conditions will be seriously detrimental to the financial prospects of the
Outlet and will irreparably damage the goodwill and reputation of Franchisor.
11. Maintenance and Upgrading of Outlet.
11.1 Subject to the terms of this Article 11, as well as the terms of
Article 12, and particularly Articles 11.2, 11.3, and 12.4, Franchisee shall, at
all times, comply, and cause the Outlet to comply, with all standards,
specifications, processes, procedures, requirements, and instructions of
Franchisor regarding the Outlet's physical facilities, including the layout of
furnishings and fixtures, and facilities at which, or by means of which,
Franchisee is permitted, by Franchisor, to store, handle, prepare, or transport
Approved Products or ingredients. Franchisee shall maintain the Outlet and any
parking areas in good condition, and such parking areas shall be kept free of
snow and other obstructions.
11.2 Franchisee, from time to time, shall remodel or upgrade the
Outlet in accordance with Franchisor's standards for Outlets in the System.
Franchisee shall bear the entire cost thereof, and of adding equipment and
altering the Outlet.
12. Confidential Manuals.
12.1 Franchisee hereby acknowledges receipt and loan of a copy of the
Pizzeria Uno Recipe Manual, the Bar Manual, the Host Manual, the Server Manual,
the Dish and Kitchen Maintenance Manual, the Prep Manual, the Cook's Manual, the
Manager In Training Manual, the Quality Assurance Manual, the HazMat Manual, the
Facilities Management Manual, and the Confidential Operating Manual, also known
as the Management Operations Manual, (together, known as the "Manuals"). The
Manuals shall remain the sole property of Franchisor at all times; Franchisee
agrees to return the Manuals to Franchisor immediately at the expiration or
sooner termination of this Agreement.
12.2 Franchisee shall treat the contents of the Manuals as
confidential at all times, and shall never copy, duplicate, record, or otherwise
reproduce the Manuals, in whole or in part, or otherwise make the contents of
the Manuals available to any person, other than those persons employed by
Franchisee to whom disclosure is necessary to enable Franchisee to operate the
Outlet under the terms of this Agreement, and Franchisee shall not permit any
such prohibited act from being done by another.
12.3 Franchisor, from time to time, may revise the Manuals to reflect
changing needs of customers, employees, governmental entities or other pertinent
people or entities. The periodic revisions may include, but are not limited to,
changes with respect to:
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(a) Advertising and promotions;
(b) Intellectual Properties;
(c) Equipment and supplies;
(d) Employee uniforms;
(e) Internal and external design and layout of the Outlet;
(f) Accounting and reporting systems and forms;
(g) Insurance requirements;
(h) Operating procedures; and
(i) Menu changes.
12.4 Franchisee agrees to operate the Outlet in accordance with the
Manuals and to be responsible for ensuring strict compliance with the standards,
specifications, requirements, and instructions presently set forth therein, and
with any and all subsequent amendments and supplements thereto. Failure to
comply with the standards set forth in the Manuals, as periodically updated,
shall constitute a material breach of this Agreement.
13. Compliance with Standards.
13.1 Franchisee, consistent with the terms of this Agreement, shall
develop diligently the Outlet and use its best efforts to market and promote the
Required Products and the Optional Products which are offered for sale.
13.2 Subject to the terms of this Agreement, including Articles 2, 11
and 12, and particularly Articles 11.2 and 12.4, during the License Term,
Franchisee shall comply strictly with all present and future standards,
specifications, processes, procedures, requirements, and instructions of
Franchisor regarding the operation of the Outlet, including, but not limited to,
the following:
(a) Franchisee or the designated Control Person(s) (see
Article 13.7) must devote full time to the supervision, management, and
operation of the Outlet.
(b) Franchisee or its designated Control Person(s), and all
employees at the Outlet must attend and complete such courses, programs, and
seminars at such locations as Franchisor reasonably may require, from time to
time, and Franchisee shall pay all salary, travel, hotel, meal, and other
expenses of persons attending. Initial training is required for a minimum of
three (3) management employees of Franchisee's choice, which shall include
training at Franchisor's headquarters and at a company outlet. Such training
must be completed satisfactorily at least four (4) weeks prior to the opening of
the Outlet. At all times that the Outlet is in operation, a minimum of three (3)
employees will be certified by Franchisor's training program.
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(c) All Approved Products offered for sale at the Outlet must
be prepared at the Outlet for sale to customers at the Outlet, except that
beverages or "side items," as authorized by Franchisor, may be prepared
elsewhere, but any such authorization shall be subject to change or termination
by Franchisor.
(d) Each additional Required Product introduced into the
Outlet must be offered for sale on a continuing basis at the Outlet at the time
and in the manner required by Franchisor.
(e) No product, except Approved Products, may be prepared,
offered for sale, or sold at or from the Outlet.
(f) Promptly upon the request of Franchisor, the marketing of
any Optional Product must be discontinued.
(g) Only signs and menuboards, advertising and promotional
material, equipment, supplies, uniforms, paper goods, packaging, furnishings,
fixtures, food items, recipes, and food ingredients which meet Franchisor's
standards and specifications (as established from time to time) shall be used at
the Outlet or in connection with its business.
(h) All equipment, signs, menuboards, supplies, and other
items necessary in connection with adding new Approved Products must be
acquired, installed, and utilized, and the marketing of such new Approved
Products must begin at the Outlet as reasonably required by Franchisor.
(i) Equipment, signs, menuboards, supplies, and other items
must be added, eliminated, substituted, and/or modified at the Outlet as soon as
practicable, in accordance with changes in Franchisor's specifications and
requirements.
(j) The Outlet and everything located at the Outlet must be
maintained in first-class condition and repair, and must be kept clean, neat,
and sanitary; the Outlet must be adequately lighted and operated in a clean,
wholesome, and sanitary manner, consistent with Franchisor's requirements; all
maintenance, repairs, and replacements reasonably requested by Franchisor or
needed in connection with the Outlet must be promptly made; and all employees
must be clean and neat in appearance.
(k) No alterations of the Outlet materially affecting the
image of the Outlet may be made, except at Franchisor's written request or with
Franchisor's prior written approval, and any such alterations must strictly
conform to specifications and requirements established or approved by
Franchisor.
(l) The Outlet and its business must comply with all
applicable laws, ordinances, rules, regulations, and other requirements.
(m) Such advertising materials as may be furnished by
Franchisor, from time to time, may be used only in accord with Franchisor's
directions.
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(n) The Outlet must be open for business every day during the
License Term for the standard hours of operation for Franchisor's company
operated Pizzeria Uno full-service restaurants (or such later time as may be
permitted or such earlier time as may be required by applicable licensing laws
and local conditions), or such other hours reasonably approved by Franchisor,
except such days as the Outlet is closed for repairs, pursuant to Article 17
(Condemnation and Casualty), or as approved in writing by Franchisor. Hours of
operation must be posted.
(o) The employees, the equipment and supplies, the inventory,
and other items on hand at the Outlet must be, at all times, sufficient to meet
efficiently the anticipated volume of business.
(p) All debts and taxes arising in connection with the Outlet
and its business, except those duly contested in a bonafide dispute, must be
paid when due, including, but not limited to, debts payable to Franchisee's
landlord, Franchisor, Franchisor's affiliates, and Franchisee's distributors and
other creditors.
(q) All necessary and appropriate measures must be taken to
avoid an unsatisfactory or equivalent safety, sanitation, or health rating, at
any time, from any governmental agency or authority; conditions or practices
disapproved by any such agency or authority must be promptly corrected, except
that, with Franchisor's prior approval, Franchisee may contest the action by
such agency or authority as being arbitrary, capricious, unfair, and/or unwise.
(r) All dealings and transactions with customers, suppliers
and other parties must be fair and honest.
13.3 In prescribing standards, specifications, processes, procedures,
requirements, or instructions under Article 13.2, any other provision of this
Agreement, or otherwise, Franchisor shall take no part in determining the prices
charged by Franchisee for products or services of any kind, and shall not have
control over the day-to-day managerial operations of the Outlet.
13.4 Franchisor and its representatives shall have the right, during
business hours and at all other reasonable times, to enter and inspect the
Outlet and all other facilities used for the preparation, storage, sale, and
transportation of any Approved Products, to discuss with Franchisee, or such
other people as Franchisee may designate, all matters that may pertain to
compliance with this Agreement and with Franchisor's standards, specifications,
requirements, instructions, and procedures, to take photographs of the Outlet
and such other facilities, and to buy samples of food products and other items
at the Outlet and other points-of-sale. Franchisor and its representatives also
shall have the right, under the supervision of Franchisee or Franchisee's
designees, to collect such samples at any other facilities under the control of
Franchisee. Franchisee shall cooperate, in all respects, with Franchisor in its
exercise of rights under this Article, provided that Franchisor's exercise of
such rights will not interfere unreasonably with the conduct of Franchisee's
business.
13.5 When an Optional Product is sold in the United States by 90% of
all full-service Pizzeria Uno restaurants operated by Franchisor, or one-half of
the Outlets operating
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under the System, then, on advance notice of at least three (3) months,
Franchisor may specify such Optional Product as a Required Product. Such
Optional Product shall not be deemed a Required Product if Franchisee
demonstrates to Franchisor's reasonable satisfaction that (1) a substantial
capital improvement is required, that would result in a material hardship to
Franchisee, and (2) a material reduction in sales or profitability would result
therefrom.
13.6 Required Products include alcoholic beverages, including beer,
wine, and liquors. Franchisee must be authorized legally to sell alcoholic
beverages at all times permitted by law that the Outlet is open for business,
and Franchisee agrees to obtain and maintain, in full force and effect, all
permits, licenses, and authorizations necessary for the sale of alcoholic
beverages which are, from time to time, in the Required Products for consumption
at the Outlet.
13.7 Franchisor expects Franchisee to be or to designate the Control
Person for the Outlet. As used in this Agreement, "Control Person" means the
person(s) having direct responsibility for all operations of the Outlet on a
day-to-day basis. Each Control Person shall be a supervisor who is not a single
unit manager and shall be approved by Franchisor.
13.8 If Franchisee has, in Franchisor's sole judgment, insufficient
Uno or other food service experience, then, at Franchisor's request, Franchisee
shall designate, as Control Person, a person having such experience. Any change
in the Control Person shall be subject to the approval of Franchisor. The
Control Person may receive notices in accord with Article 24.9 in lieu of or
addition to other persons designated in that Article.
14. Purchase of Equipment and Supplies.
14.1 Franchisee shall have the right to purchase directly, from any
approved manufacturer, the equipment, paper goods, and other products required
for the Outlet. As to certain proprietary food and seasoning products,
Franchisor reserves the right to approve only one manufacturer, not affiliated
with Franchisor, notwithstanding the provisions of Article 14.3.
14.2 Franchisor shall promptly furnish to Franchisee, upon
Franchisee's written request, the then current standards and specifications
applicable to any equipment, supplies, trademarked paper goods, or other
products required by Franchisor, provided that Franchisor shall not be obligated
to disclose any of its trade secrets. In addition, Franchisor promptly shall
furnish to Franchisee, upon Franchisee's written request, the names and
addresses of all manufacturers, currently approved by Franchisor, from whom such
equipment, supplies, trademarked paper goods, and other products may be
purchased.
14.3 If Franchisee desires to purchase the required products from a
manufacturer not then approved by Franchisor, Franchisee shall provide
Franchisor with all information regarding such manufacturer reasonably requested
by Franchisor, and, upon Franchisor's request, the manufacturer may be required
to provide Franchisor with samples of such products. Any tests required by
Franchisor to determine whether the products meet Franchisor's standards and
specifications shall be performed by or under the direction or supervision of
Franchisor but at the cost of the manufacturer. Upon the completion of any
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such tests and any other procedures required by Franchisor, Franchisor shall
determine whether the goods are of sufficient quality, and whether the
manufacturer possesses adequate capacity and facilities to supply Franchisee's
needs in the quantities, at the times, and with the reliability requisite to an
efficient operation. Franchisor then shall advise Franchisee and the
manufacturer promptly as to whether the manufacturer has been approved as a
source of supply of the products involved, and of the basis for its decision.
Franchisor shall not be required to approve sources of equipment, paper goods,
or other products which do not meet Franchisor's standards and specifications.
14.4 Franchisor may, from time to time, review the quality of the
equipment, supplies, paper goods, and other products produced or supplied by
approved manufacturers (and their capacity and facilities), and shall have the
right to monitor the production, use, and ultimate disposition of items bearing
Franchisor's Intellectual Properties. On the basis of such review and
monitoring, Franchisor may remove such manufacturers from the list of approved
sources. In such event, Franchisor shall promptly advise Franchisee of such
action.
14.5 It shall be a material breach of this Agreement for Franchisee to wilfully
or repeatedly make late or inadequate payments to any supplier or manufacturer
to which a debt is lawfully owed.
15. Insurance and Indemnification.
15.1 Franchisee, upon commencement of the License Term, shall purchase
and obtain, and, at all times thereafter, maintain, in full force and effect:
(a) Workmen's Compensation insurance, in amounts prescribed by
law;
(b) Fire, lightning, extended coverage, vandalism and
malicious mischief, and sprinkler leakage insurance on the Outlet and all
fixtures, equipment, supplies, and other property used in the operation of the
Outlet, for not less than eighty (80%) percent of the cash value of the same,
except that an appropriate deductible clause shall be permitted;
(c) Comprehensive general liability (including liability
relating to the serving of alcoholic beverages) insurance and product liability
insurance coverage in such amounts and upon such terms as may from time to time
be customary for restaurant businesses located in the Territory, such amounts
not to be less than one million dollars per occurrence, insuring both Franchisee
and Franchisor (as an additional insured party) against all claims, suits,
obligations, liabilities, and damages, including attorneys' fees, based upon or
arising out of actual or alleged personal injuries and/or property damage
resulting from, or occurring in the course of, or on or about, or otherwise
relating to, the use or condition of the Outlet;
(d) Such additional insurance as may be required by the terms
of any lease for the Outlet; and
(e) Business interruption insurance sufficient to pay rent and
other monthly obligations, such as the Minimum Continuing License Fee, in the
event of a catastrophe.
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The insurance afforded by the policy or policies respecting liability
shall not be limited in any way by reason of any insurance which may be
maintained by Franchisor.
15.2 All policies of insurance required under this Article shall be
with responsible companies with a rating by Moody's or A.M. Best of A grade or
better qualified to do business and in good standing in the state where the
Outlet is located, and shall be in form reasonably satisfactory to Franchisor.
Prior to opening for business, Franchisee shall furnish to Franchisor
certificates, issued by each of Franchisee's insurers, indicating that all
premiums due have been paid, that all required insurance is in full force and
effect, and that such insurance will not be terminated or changed without at
least thirty (30) days prior written notice from the insurer to Franchisor. Such
insurance policies shall also name Franchisor as additional insured. New
certificates evidencing renewal of such insurance shall be furnished at least
thirty (30) days prior to the date of expiration of each such policy. Within
five (5) business days of any request by Franchisor, Franchisee shall deliver a
complete copy of each such insurance policy to Franchisor for examination.
15.3 If Franchisee fails to obtain or maintain adequate insurance,
Franchisor, at its election, may obtain and maintain said insurance for and in
the name of Franchisee. Within five (5) business days of any written request of
Franchisor, Franchisee shall furnish all information necessary to obtain and
maintain such insurance, and shall pay all costs thereof.
15.4 Franchisee shall indemnify, defend, and hold Franchisor harmless
against any and all claims, demands, losses, damages (including punitive
damages), costs, suits, judgments, penalties, expenses (including reasonable
attorneys' fees and amounts paid in settlement or compromise), and liabilities
of any kind or nature, whether or not ultimately determined to be meritorious
(and including damages suffered by Franchisee or any of Franchisee's property
(collectively, "Damages")) arising directly or indirectly out of or in
connection with the construction, operation, maintenance, or occupancy of the
Outlet, except to the extent that such liabilities arise from the negligence or
willful conduct of Franchisor.
15.5 All fixtures, equipment, signs, merchandise, supplies, and other
property, on or about the Outlet, shall be at Franchisee's sole risk and hazard,
and if the whole or any part thereof shall be destroyed or damaged in any way or
manner, no part of said loss or damage is to be charged to or borne by
Franchisor in any case whatsoever, except only to the extent caused by
Franchisor's gross negligence.
16. Intellectual Properties.
16.1 Franchisee recognizes and acknowledges Franchisor's sole and
exclusive ownership of and rights in Franchisor's Intellectual Properties. Any
and all goodwill now or hereafter associated with or relating to Franchisor's
Intellectual Properties is and shall be the property of Franchisor, and shall
accrue directly and exclusively to the benefit and as the property of
Franchisor. Nothing contained in this Agreement shall be construed to vest in
Franchisee any right, title, or interest in or to Franchisor's Intellectual
Properties or the goodwill now or hereafter associated therewith, other than the
rights and license expressly granted herein.
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16.2 Franchisee represents, warrants, and agrees that Franchisee shall
not (i) directly or indirectly contest or aid in contesting, either during the
term of this Agreement or following the termination hereof, the validity or
ownership of Franchisor's Intellectual Properties, or (ii) take any action
whatsoever in derogation of Franchisor's claimed rights therein, whether now
existing or hereafter obtained.
16.3 Franchisee agrees to use only Franchisor's existing or future
Intellectual Properties in connection with the promotion and conduct of the
Outlet, only in accordance with the instructions, rules, and procedures
established from time to time by Franchisor.
16.4 Franchisee shall cause Franchisor's trademarks, service marks,
trade names, logotypes, commercial symbols, and copyrighted materials to be
reproduced exactly and accurately and, when required by Franchisor, shall mark
all materials bearing or comprising the same with the appropriate symbols (i.e.,
(TM), (C), (R), or (sm)).
16.5 Franchisee shall not use the trademarks, service marks, trade
names, logotypes, commercial symbols, or copyrighted materials in its own
corporate or other entity name, but shall take such steps as shall be approved,
in writing by Franchisor, to register the name "Uno Restaurant" so as to be able
to operate the Outlet under the name "Uno Restaurant." With the exception of the
registration of a d/b/a or an assumed named certificate in connection with the
operation of the Outlet, Franchisee will not register or attempt to register
Franchisor's names or marks in its own name or in the name of any other entity.
16.6 Franchisee immediately shall provide Franchisor with all
information it has about the source and dissemination of any suspected or known
libel, defamation, infringement or threatened infringement or piracy of or
challenge to the Intellectual Properties used in Franchisor's System, and
Franchisee shall assist and cooperate with Franchisor in taking such action, at
Franchisor's cost and expense, as Franchisor deems appropriate to protect the
System.
16.7 Immediately upon the expiration or sooner termination of this
Agreement, Franchisee shall: (i) cease and forever abstain from using any of the
Intellectual Properties; (ii) take all actions necessary to cancel any d/b/a or
assumed name registration containing any of the foregoing; and (iii) furnish
Franchisor evidence satisfactory to Franchisor of compliance with the foregoing
obligations within thirty (30) days after said expiration or sooner termination.
16.8 Franchisee acknowledges that Franchisee had no part in creating
or developing, no prior knowledge of, and no rights or claims in or to, any
element of the System. Franchisee agrees that all materials loaned or otherwise
made available to Franchisee hereafter shall be kept confidential by Franchisee
and shall remain the property of Franchisor. Franchisee, at no time, shall
disclose, exhibit, or reproduce any confidential element of the System which
becomes known to Franchisee, whether through or at the direction of Franchisor,
or in any other manner whatsoever, except to those persons employed by
Franchisee to whom disclosure must be made to enable Franchisee to operate the
Outlet under the terms of this Agreement. After the expiration or sooner
termination of this Agreement, Franchisee and Franchisee's employees, if
Franchisee is an individual, or
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any of Franchisee's officers, directors, shareholders, and employees, if
Franchisee is incorporated, or Franchisee's employees, trustees, and
beneficiaries, if Franchisee is a trust, or Franchisee's employees and partners,
if Franchisee is a partnership, and Franchisee's employees, principals, joint
venturers, or the like, if Franchisee is some other type of unincorporated
entity, shall not disclose, exhibit, or reproduce any such confidential
information or trade secrets to any corporation, association, partnership, or
person whatsoever. Franchisee recognizes that all confidential elements of the
System are trade secrets, that Franchisor has made a substantial investment in
the aforesaid trade secrets, and that disclosure of such trade secrets is
prohibited. Franchisee agrees to cause its employees and such other persons
mentioned in the fourth sentence of this Article 16.8, as may be appropriate, to
execute proprietary information agreements containing the provisions of this
paragraph, if requested by Franchisor.
16.9 Except as specifically disclosed in Article XIII of the Franchise
Offering Circular, Franchisor represents and warrants, to the best of
Franchisor's knowledge, that the Intellectual Properties do not violate or
infringe upon any rights of others.
16.10 If, at any time, in Franchisor's reasonable judgment, Franchisor
requires Franchisee to modify or discontinue use of any mark or any of the
Intellectual Properties, and/or use one or more additional or substitute
trademarks, service marks, or logos, Franchisee shall comply, at Franchisee's
expense, with Franchisor's directions to modify or otherwise discontinue the use
of such marks, and/or to use one or more additional or substitute marks after
reasonable notice thereof by Franchisor.
17. Lease Termination, Condemnation, and Casualty.
17.1 Franchisee promptly shall advise Franchisor upon Franchisee's
receipt of a notice of default or termination, or a notice to quit under
Franchisee's lease, and promptly shall provide Franchisor with a copy of each
such notice. Franchisee also shall give Franchisor notice of any proposed taking
of the Outlet, or any portion thereof, through the exercise of the power of
eminent domain, at the earliest possible time. If the Outlet or a substantial
part thereof is to be taken, the Outlet may be relocated within the area
specified in Subarticle 1(f)(2), if any, or elsewhere, in each instance, with
Franchisor's prior written approval and in accordance with Franchisor's
relocation procedures. If Franchisee opens a new outlet at such other location,
in accordance with Franchisor's specifications within one year of the closing of
the old outlet, the new outlet will thenceforth be deemed to be the Outlet
licensed under this Agreement. If such a condemnation or lease termination takes
place and a new outlet, for whatever reason (other than those specified in
Article 10), does not become the Outlet, as provided in this Article 17.1, then
the License shall terminate upon notice by Franchisor.
17.2 If the Outlet is damaged, Franchisee will repair the damage
expeditiously. If the damage or repair requires closing the Outlet, Franchisee
immediately will notify Franchisor, will (i) relocate the Outlet as provided in
Article 17.1, or (ii) repair or rebuild the Outlet in accordance with
Franchisor's specifications, and will reopen the Outlet for continuous business
operations as soon as practicable (but in any event within twelve (12) months
after closing the Outlet), giving Franchisor advance notice of reopening not
less than thirty (30) days prior to the date of reopening. If the Outlet is not
(or, in the opinion of
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Franchisor, cannot be) reopened in accordance with this Article 17.2, or
relocated pursuant to Article 17.1, the License shall terminate upon notice to
Franchisee.
17.3 The License Term shall not be extended by any interruption in the
Outlet's operations, except for an act of God that results in the Outlet being
closed not less than sixty (60) days or more than one hundred eighty (180) days.
Franchisee must apply for any such extension within sixty (60) days following
the reopening of the Outlet. Except as provided herein, no event during the
License Term shall excuse Franchisee from paying license fees provided herein.
18. Restrictions on Competition.
18.1 During the License Term, and except as permitted in writing by
Franchisor, neither Franchisee nor any partner, officer, director, or principal
of Franchisee, or any person controlled by, controlling, or under common control
with Franchisee shall directly or indirectly, through corporations, or through
partnerships, trusts, associations, joint ventures, or other unincorporated
businesses, perform any services for, engage in or acquire, be an employee of,
have any financial, beneficial, or equity interest in, or have any interest
based on the profits or revenues of, any business similar to the Outlet within
three (3) miles of any restaurant or food facility operating under the System;
provided, however, that the individuals and entities described above may engage
in the activities and maintain the interests described above in connection with
other facilities franchised from Franchisor or its affiliates. For two (2) years
following the termination hereof, or the expiration of the License Term, the
same restrictions shall apply, with respect to any business operated within
three (3) miles of any restaurant or food facility operating under the System.
As used herein, the term "similar" means a restaurant business in the
full-service, "casual theme" (as that term is commonly understood in the
restaurant industry) segment of the restaurant industry, or a restaurant
business which looks like, copies, imitates, or operates in a manner similar to
a "Uno" restaurant, or a restaurant business which sells pizza as one of its
primary items. Nothing in this Article 18.1 shall prevent any active officer of
Franchisee or member of his family, collectively, or any partner, officer,
director, or principal of Franchisee, or any persons controlled by, controlling,
or under common control with Franchisee, from owning not more than a total of
five (5%) percent of the stock of any company which is subject to the reporting
requirements of Sections 12 or 15(d) of the Securities Exchange Act of 1934.
Neither Franchisee nor any partner, officer, director, or principal of
Franchisee, or any persons controlled by, controlling, or under common control
with Franchisee, shall employ, or seek to employ, or otherwise interfere with
the employment relationship of any person who is then employed by Franchisor
and/or by any affiliate of Franchisor.
18.2 If any court or other tribunal having jurisdiction to determine
the validity or enforceability of Article 18.1 determines that, strictly
applied, it would be invalid or unenforceable, the definition of "similar
business" or the time or geographical provisions of Article 18.1 shall be deemed
modified to the extent necessary (but only to that extent) so that such
restrictions, as modified, will be valid and enforceable.
18.3 Franchisee acknowledges that as an Uno franchisee, Franchisee
will have access to Franchisor's trade secrets and confidential practices, and,
therefore, is in a unique position to use the special knowledge Franchisee will
have gained while a franchisee.
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Franchisee acknowledges that a breach of the covenants contained in this Article
18 will be deemed to threaten immediate, substantial, and irreparable injury to
Franchisor. Accordingly, Franchisee agrees that Franchisor shall have the right,
without prior notice to Franchisee, to obtain immediate injunctive relief
without limiting any other rights or remedies of Franchisor.
19. Termination of License.
19.1 Termination by Franchisee. If no site has been designated and
approved pursuant to Article 10.1, or if Franchisee desires to close the Outlet
permanently and cease doing business, Franchisee may terminate the License by
giving sixty (60) days advance written notice to Franchisor, provided that the
Outlet is permanently closed simultaneously with such termination of the
License.
19.2 Termination by Franchisor without Notice. Unless Franchisor
promptly after discovery of the relevant facts notifies Franchisee, to the
contrary, in writing, the License will immediately terminate, without notice (or
in the event notice is required by law, immediately upon the giving of such
notice or at the earliest time thereafter permitted by applicable law), in the
event that:
(a) No site has been designated and accepted pursuant to
Article 10.1;
(b) A permanent or temporary receiver or trustee for the
Outlet, or for all, or substantially all, of Franchisee's property is appointed
by any court; or any such appointment is acquiesced in, consented to, or not
opposed, through legal action, by Franchisee; or Franchisee makes a general
assignment for the benefit of Franchisee's creditors, or makes a written
statement to the effect that Franchisee is unable to pay Franchisee's debts as
they become due; or a levy or execution is made upon the License; or an
attachment or lien remains on the Outlet for thirty (30) days, unless the
attachment or lien is being contested, in good faith, by Franchisee, and
Franchisor is so advised; or
(c) Franchisee loses possession, or the right of possession,
of all, or a significant part, of the Outlet through condemnation, casualty,
lease termination, or mortgage foreclosure (and the Outlet is not relocated or
reopened as provided in Article 17); or
(d) Franchisee contests, in any court or proceeding, the
validity or Franchisor's ownership of any of the Intellectual Properties; or
(e) A breach of Article 20 (Assignment) occurs; or
(f) If Franchisee is a corporation, a trust, or an
unincorporated entity other than a trust, any action is taken which purports to
merge, consolidate, dissolve, or liquidate Franchisee without Franchisor's prior
written consent.
19.3 Termination by Franchisor With Notice. The License will terminate
on the termination date specified in any notice by Franchisor to Franchisee
(without any further notice of termination unless required by law), provided
that (i) the notice is hand-delivered
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or mailed at least thirty (30) days (or such longer period as may be required by
law) in advance of the termination date, (ii) the notice reasonably identifies
one or more breaches or defaults in Franchisee's obligations or performance
hereunder or under the Manuals, (iii) the notice specifies the manner in which
the breach(es) or default(s) may be remedied, and (iv) the breach(es) and
default(s) are not fully remedied before, and as of, the termination date
specified in the notice. The period given to remedy breaches and defaults, if
permitted by law, shall be ten (10) days instead of thirty (30) days if
Franchisee shall have engaged in repeated breaches of, or defaults under, this
Agreement within the then preceding twenty-four (24) months for which Franchisee
shall have received notice of termination and termination failed to take effect
because the breaches or defaults were remedied. Such period shall be extended if
the breach reasonably cannot be cured in such ten (10) or thirty (30) days,
provided that (i) Franchisee has taken all steps to effect such cure which are
possible within such ten (10)- or thirty (30)-day period, that (ii) Franchisee
diligently prosecutes such cure to completion, and that (iii) such period shall
in no event be extended by more than sixty (60) days. Any under-reporting of
royalties or other fees by more than 2% in an audit period may result in
immediate termination by Franchisor without opportunity to cure, and any other
under-reporting may also result in termination if Franchisor finds the
under-reporting to be material, repeated or deliberate.
19.4 Effect of Termination. Should this Agreement be terminated or the
License expire for any reason, all rights and obligations between the parties
under this Agreement shall terminate, except for those pertinent to Articles
7.2, 12.1, 12.2, 16, 18, 19 and any other Articles involving continuing
protection of Franchisor's proprietary rights or Intellectual Properties.
Franchisee shall thereupon cease to be a licensed participant in the System, and
Franchisee shall:
(a) Promptly pay Franchisor all amounts owing from Franchisee
to Franchisor, based on operations of the Outlet through the date of termination
or expiration, plus interest at the lower of (a) eighteen (18%) percent per
annum or (b) the highest rate permitted by law;
(b) Immediately discontinue the use of all Intellectual
Properties, signs, structures, forms of advertising, telephone listings and
service, manuals, recipes, and all materials and products of any kind which are
identified or associated with the System, and, subject to Article 19.5, return
all such materials and products to Franchisor and, at Franchisor's request,
assign Franchisee's telephone number to Franchisor;
(c) Thereafter make no representation or state that Franchisee
is in any way approved, endorsed, or licensed by Franchisor, or associated or
identified with Franchisor or the System in any manner whatsoever;
(d) Immediately take all steps necessary to amend or terminate
any registration or filing of any d/b/a, fictitious name, or any other
registration or filing containing Franchisor's names and marks, so as to delete
Franchisor's names, marks, and all references to anything associated with the
System;
(e) Provide Franchisor the option to purchase required by
Article 21; and
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(f) Comply with the provisions of Articles 16.7 and 18.1.
19.5 If, within thirty (30) days after termination of this Agreement
by Franchisor, Franchisee fails to remove all displays of Franchisor's names and
marks, and any other materials of any kind from the Outlet which are identified
or associated with the System, Franchisor or its agents may enter the Outlet to
effect such removal. In such event, Franchisor shall not be charged with
trespass, or be accountable or required to pay for such displays or materials.
19.6 If, within thirty (30) days after termination, Franchisee has not
taken all steps necessary to amend or terminate any registration or filing of
any d/b/a, fictitious name, or any other registration or filing containing
Franchisor's names and marks, Franchisee hereby irrevocably makes, constitutes,
and appoints Franchisor as Franchisee's true and lawful attorney, for Franchisee
and in Franchisee's name, place, and stead, and on Franchisee's behalf, to take
such action as may be necessary to amend or terminate all such registrations and
filings, such appointment being coupled with an interest to enable Franchisor to
protect the System.
19.7 Termination of this Agreement shall not affect, modify, or
discharge any claims, rights, causes of action, or remedies which Franchisor may
have against Franchisee, whether such claims or rights arise before or after
termination.
20. Assignment.
20.1 General. None of Franchisee's rights under this Agreement, all of
which are personal in nature, may be the subject of any pledge, lien, levy,
attachment, security interest, or arrangement, or be acquired through execution,
foreclosure, or like action or event. None of Franchisee's rights or obligations
under this Agreement is assignable or transferable or can be encumbered without
Franchisor's prior written consent, and without compliance, in all other
respects, with the terms of this Article. Any transfer or assignment of
controlling interest in the stock or partnership rights of Franchisee or of all
or substantially all of the assets of the Outlet shall be considered a transfer
or assignment of this Agreement for purposes of this Article 20. Any purported
transaction, interest, or action contrary to this Article will be in breach of
this Agreement and will be void. Upon and after each valid assignment of this
Agreement pursuant to this Article 20, the assignee or assignees shall be deemed
to be Franchisee hereunder and shall be bound by and liable for all existing and
future obligations of Franchisee. No shareholder in any corporation which
becomes Franchisee shall have any rights in or under this Agreement by reason of
his stock ownership, and the name of such corporation shall not include any of
the names, trademarks, or service marks of Franchisor.
20.2 Conditions to Assignments and Transfers. No transfer or
assignment of this Agreement shall be approved by Franchisor or be effective
unless and until:
(a) There shall be no uncured default in the performance or
observance of any of Franchisee's obligations under this Agreement or any other
agreement with Franchisor;
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(b) Franchisee shall have settled all outstanding accounts
with Franchisor, and Franchisee and every principal of Franchisee shall have
executed a general release of Franchisor and all principals of Franchisor from
all claims that may be brought by Franchisee and/or any principal of Franchisee;
(c) The transferor (Franchisee) shall pay Franchisor the
Transfer Fee defined in Article 1, unless the proposed transferee is and will be
after closing (i) a corporation of which Franchisee is the majority shareholder,
or a child, parent, sibling, or spouse of Franchisee, in which case no Transfer
Fee shall be required, or (ii) another franchisee of Franchisor, in which case
Franchisee shall pay only One Thousand Dollars ($1,000) as the Transfer Fee;
(d) If requested by the Franchisor, the proposed transferee
shall execute a separate Unit Franchise Agreement with Franchisor, using
Franchisor's then current form of Unit Franchise Agreement, and the proposed
transferee shall execute an Acknowledgement of Receipt as to the receipt of a
then current copy of Franchisor's Uniform Franchise Offering Circular, as
required by applicable state and/or federal law;
(e) The proposed transferee shall pay for, attend, and
satisfactorily complete the training program for new franchisees;
(f) The individual proposed transferee, or the shareholders,
directors, officers, partners, trustees, beneficiaries, principals, and key
employees of a proposed transferee which is a corporation, partnership, trust,
or some other entity shall each execute a personal guarantee, jointly and
severally guaranteeing the performance of the proposed transferee's obligations;
(g) The proposed transferee shall have demonstrated, to
Franchisor's satisfaction, that the proposed transferee meets, in all respects,
Franchisor's high standards applicable to new franchisees regarding experience,
personal, and financial reputation and stability, willingness and ability to
devote the proposed transferee's full time and best efforts to the operation of
the franchised business, and such other criteria and conditions as Franchisor
reasonably may apply in evaluating new franchisees. Franchisor must be provided
such information about the proposed transferee as it reasonably may require.
Because of the confidential information available to a franchisee hereunder, no
assignment to a competitor of Franchisor or of an affiliate of Franchisor will
be permitted; and
(h) The parties to the proposed transaction shall have entered
a binding agreement, subject only to the rights of Franchisor hereunder;
Franchisor shall have been furnished a copy of said binding agreement (a
"Purchase and Sale Agreement"); and Franchisor has waived, in writing, its
rights under Article 21. Franchisee shall advise each prospective transferee of
this and the other provisions of this Agreement.
20.3 Any attempt by Franchisee to transfer any of Franchisee's rights
or interests under this Agreement, without having received the prior written
consent of Franchisor, shall constitute a material breach of this Agreement.
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20.4 Upon the death of an individual franchisee, the rights granted by
this Agreement may pass (without payment of any Transfer Fee) to the next of kin
or legatees, provided that the legal representatives of Franchisee shall, within
One Hundred Twenty (120) calendar days of such event, apply, in writing, to
Franchisor for the right to transfer, to such next of kin or legatee,
Franchisee's rights under this Agreement. Franchisor shall not withhold
unreasonably its permission so long as the proposed transferees meet each of the
requirements of Franchisor set forth in Article 20.2 (without regard to
Subarticle 20.2(c)). Franchisor may allow the proposed transferees to designate
additional Control Persons in order to obtain a level of experience that is
satisfactory.
20.5 If Franchisee is an individual and desires to transfer his/her
rights under this Agreement to a corporation, partnership, trust, or some other
entity which Franchisee shall newly form and of which Franchisee shall be a
majority shareholder, partner, trustee, beneficiary, officer, and/or principal,
Franchisee may do so only if:
(a) Franchisee's name remains on this Agreement, and the
corporation, partnership, trust, or other entity is added as a Co-franchisee;
(b) Franchisee or the designated Control Person(s) shall
continue to devote full time and best efforts to manage the day to day
operations of the Outlet;
(c) The activities of the Control Person(s) are confined
exclusively to operating the Outlet;
(d) The corporation, partnership, trust, or other entity, and
all principals thereof sign a guarantee, jointly and severally guaranteeing all
obligations of Franchisee under this Agreement;
(e) The partners in any partnership agreement with Franchisee
are approved by Franchisor; and
(f) The stock certificates, certificated units of partnership,
or certificated beneficial interests of the corporation, partnership, or trust
shall bear the following legend:
"The [shares of capital stock] [partnership interest]
[beneficial interest] represented by this certificate [is]
[are] subject to the terms and conditions set forth in a Unit
Franchise Agreement dated ___________, between the
[Corporation] [Partnership] [Trust] [other entity] and
PIZZERIA UNO CORPORATION, a copy of which is on file in the
principal office of the [Corporation] [Partnership] [Trust]
[other entity], and a copy of which will be provided to the
holder of record hereof, upon written request, without
charge."
It is expressly understood that the assumption of Franchisee's
obligations by any corporation, partnership, trust, or other entity does not
limit Franchisee's personal obligations under this Agreement, and that
Franchisee and the corporation, partnership, trust, or other entity shall be
jointly and severally liable.
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20.6 Franchisor's rights and obligations under this Agreement are
assignable.
21. Option to Purchase.
21.1 Unless otherwise explicitly provided by this Agreement,
Franchisor shall be entitled to exercise the rights provided in this Article 21
immediately upon (i) the expiration, without renewal or termination, for any
reason of the License or this Agreement, or (ii) any breach, default, or other
event which gives Franchisor the right to terminate the License or this
Agreement, or (iii) the receipt by Franchisor of a copy of a Purchase and Sale
Agreement (see Subarticle 20.2(h));
21.2 Upon any event described in Article 21.1, Franchisor shall have
the option to purchase all of Franchisee's rights, titles, and interests in and
to the Outlet, all improvements, furniture, fixtures, equipment, and products
contained therein, and all of Franchisee's accounts, contract rights, customer
and vendor lists, work in progress, and other business assets.
21.3 The purchase price for such assets shall be as follows:
(a) For tangible personal property: the undepreciated portion
of the purchase price paid by Franchisee therefor; and
(b) For all other assets, other than goodwill and customer
lists, for which there shall be no consideration:
(i) the prices therefor specified in any bonafide,
written Purchase and Sale Agreement (see Subarticle 20.2(h); or
(ii) if no such Purchase and Sale Agreement exists
the fair market value thereof, as determined pursuant to Article 21.4.
21.4 Franchisor shall notify Franchisee of its intention to exercise
its rights hereunder (a "Notice of Intent") within sixty (60) days following an
event described in Article 21.1. Such Notice of Intent shall specify the assets
to be purchased and the fair market value of assets referred to by Subarticle
21.3(b), as determined by Franchisor, unless the Purchase and Sale Agreement
referred to by Subarticle 21.3(b) exists and specifies prices for such assets.
Franchisee shall have fourteen (14) days following receipt of Franchisor's
Notice of Intent to object to any of the prices specified therein, and any
disputes over pricing may be resolved pursuant to Article 24.8. If Franchisor
declines to exercise its rights hereunder within sixty (60) days, Franchisee may
thereafter sell the Outlet to a third party, but not at a lower price and/or on
more favorable terms than set forth in said Purchase and Sale Agreement, if any,
and subject to the prior written permission of Franchisor and satisfaction of
the other conditions for assignment set forth above.
21.5 The purchase and sale contemplated herein shall be consummated as
soon as possible. The assets shall be sold and transferred immediately,
notwithstanding any dispute resolution pursuant to Articles 21.4 and 24.8.
Following the delivery of a Notice of Intent pursuant to Article 21.4,
Franchisor or its designee shall have the rights to take possession
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of the Outlet and to carry on and develop the Outlet for the exclusive benefit
of Franchisor or its designee.
21.6 In the event that Franchisor elects not to exercise its option to
purchase hereunder, the provisions of Article 20 shall nonetheless apply to any
proposed transfer by Franchisee.
22. Bankruptcy or Insolvency.
22.1 In the event that Franchisee shall become a Debtor under Chapter
7, 11 or 13 of the Bankruptcy Code, and the Trustee or Franchisee shall elect to
assume this Agreement for the purpose of assigning the same or otherwise, such
election and assignment may be made only if all of the terms and conditions of
Articles 22.2 and 22.4 hereof are satisfied. Franchisee acknowledges that it is
essential, to the operation of Franchisor's System, that a decision on whether
to assume or reject this Agreement be made promptly to ensure the continued
value and protection of Franchisor's Intellectual Properties and the goodwill
associated therewith. Franchisee agrees that should Franchisee, as
Debtor-In-Possession, or any Trustee appointed for Franchisee, fail to elect to
assume this Agreement within ninety (90) days after the filing of the Petition,
this Agreement shall be deemed to have been rejected. Franchisee further
knowingly and voluntarily waives any right to seek additional time to affirm or
reject this Agreement and acknowledges that there is no cause to seek such
extension. If Franchisee, as Debtor-In-Possession, or the Trustee either ceases
to do business or abandons the Outlet premises, this Agreement shall be deemed
rejected. Franchisor shall be entitled to at least thirty (30) days prior
written notice from Franchisee, as Debtor-In-Possession, or its Trustee of any
intention to abandon the Outlet premises. This Agreement shall thereupon be
canceled, but Franchisor's right to be compensated for damages in any
liquidation proceeding shall survive.
22.2 Conditions to Assumption.
(a) No election by the Trustee or Debtor-In-Possession to
assume this Agreement, whether under Chapter 7, 11, or 13, shall be effective
unless each of the following conditions, which Franchisor and Franchisee
acknowledge are commercially reasonable in the context of a bankruptcy
proceeding of Franchisee, have been satisfied, and Franchisor has so
acknowledged, in writing:
(i) The Trustee or the Debtor-In-Possession has
cured, or has provided Franchisor adequate assurance (as defined below) that:
(1) Prior to the date of such assumption,
the Trustee or the Debtor-In-Possession will cure all monetary defaults under
this Agreement; and
(2) Within thirty (30) days from the date of
such assumption, the Trustee or the Debtor-In-Possession will cure all
nonmonetary defaults under this Agreement.
(ii) The Trustee or the Debtor-In-Possession has
compensated, or has provided to Franchisor adequate assurance that prior to
thirty (30) days from the date
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of assumption, Franchisor will be compensated for any pecuniary loss incurred by
Franchisor arising from the default of Franchisee, the Trustee, or the
Debtor-In-Possession.
(iii) The Trustee or the Debtor-In-Possession has
provided Franchisor with adequate assurance of the future performance (as
defined below) of each of Franchisee's, the Trustee's, or the
Debtor-In-Possession's obligations under this Agreement, provided, however,
that:
(1) The Trustee or the Debtor-In-Possession
also shall deposit with Franchisor, as security for the timely payment of the
Continuing License Fee and other monetary charges accruing under this Agreement,
an amount equal to three (3) times the highest Continuing License Fee ever paid
or payable by Franchisee hereunder; and
(2) From and after the date of the
assumption of this Agreement, the Trustee or the Debtor-In-Possession shall pay,
when due, the Continuing License Fee and Advertising Fee otherwise payable
hereunder.
(iv) The assumption of this Agreement will not:
(1) Breach any provision in any lease,
mortgage, financing agreement, or other agreement by which Franchisor is bound
relating to Franchisor's System; or
(2) Disrupt, in Franchisor's judgment,
Franchisor's System or any other attempt by Franchisor to improve Franchisor's
System which, in Franchisor's judgment, would be beneficial to all Uno
franchisees and would enhance the image, reputation, and profitability of
Franchisor's System.
(v) Franchisee, as the Debtor-In-Possession, or its
Trustee shall provide Franchisor with at least forty-five (45) days prior
written notice of any proceeding concerning the assumption of this Agreement.
(b) For purposes of this Article 22.2, Franchisor and
Franchisee acknowledge that, in the context of a bankruptcy proceeding of
Franchisee, at a minimum, "adequate assurance" shall mean:
(i) The Trustee or the Debtor-In-Possession has and
will continue to have sufficient unencumbered assets, after the payment of all
secured obligations and administrative expenses, to assure Franchisor that the
Trustee or the Debtor-In-Possession will have sufficient funds to fulfill the
obligations of Franchisee under this Agreement, and to keep the Outlet premises
stocked with supplies and properly staffed with sufficient employees to conduct
a fully operational, actively promoted business on the Outlet premises; and
(ii) The Bankruptcy Court shall have entered an Order
segregating sufficient cash payable to Franchisor, and/or the Trustee or the
Debtor-In-Possession shall have granted a valid and perfected first lien and
security interest and/or mortgage in property of Franchisee, the Trustee or the
Debtor-In-Possession, acceptable as to value and
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kind to Franchisor, to secure to Franchisor the obligations of the Trustee or
the Debtor-In-Possession to cure the monetary and/or nonmonetary defaults under
this Agreement within the time periods set forth above.
22.3 Franchisor's Option to Terminate upon Subsequent Bankruptcy
Proceedings. In the event that this Agreement is assumed by a Trustee, appointed
for Franchisee, or by Franchisee, as the Debtor-In-Possession, under the
provisions of Article 22.2, and, thereafter, Franchisee is liquidated or files a
subsequent Petition for reorganization or adjustment of debts under Chapter 11
or 13 of the Bankruptcy Code, then, and in either of such events, Franchisor, at
its option, may terminate this Agreement and all rights of Franchisee hereunder,
by giving Franchisee written notice of Franchisee's election to so terminate,
within thirty (30) days after the occurrence of either of such events.
22.4 Conditions to the Assignment of this Agreement in Bankruptcy
Proceedings. If the Trustee or the Debtor-in-Possession has assumed this
Agreement, pursuant to the terms and provisions of Articles 22.1 and 22.2, for
the purpose of assigning (or elects to assign) Franchisee's interest under this
Agreement to any other person, such interest may be so assigned only if
Franchisor shall acknowledge, in writing, that the intended assignee has
provided adequate assurance of future performance, as defined in this Article
22.4, of all of the terms, covenants, and conditions of this Agreement to be
performed by Franchisee.
For purposes of this Article 22.4, Franchisor and Franchisee
acknowledge that, in the context of a bankruptcy proceeding of Franchisee, at a
minimum, "adequate assurance of future performance" shall mean that each of the
following conditions has been satisfied, and Franchisor has so acknowledged, in
writing:
(a) The assignee has submitted a current financial statement,
audited by a Certified Public Accountant, which shows a net worth and working
capital in amounts determined to be sufficient, by Franchisor, to ensure the
future performance by such assignee of Franchisee's obligations under this
Agreement;
(b) The assignee, if requested by Franchisor, shall have
obtained guarantees, in form and substance satisfactory to Franchisor, from one
or more persons who satisfy Franchisor's standards of creditworthiness;
(c) The assignee has submitted, in writing, evidence,
satisfactory to Franchisor, of substantial experience in restaurant operations
and in the sale of merchandise and services permitted under this Agreement, all
for a volume and to a market comparable to those which Franchisee originally was
intending to serve;
(d) The assignee has obtained all consents or waivers, as to
such assignment, from any third parties which are required under any lease,
mortgage, financing arrangement, or other agreement; and
(e) The terms and conditions of Article 22.2 of this Agreement
will not be breached by any such assignment.
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22.5 State Insolvency Law. Franchisee's interest in this Agreement, or
any lesser interest of Franchisee herein, or any estate of Franchisee hereby
created, shall not pass to any trustee, receiver, assignee for the benefit of
creditors, or any other person or entity, or otherwise by operation of law under
the laws of any state having jurisdiction of the person and/or property of
Franchisee (hereinafter referred to as the "State Law"), unless Franchisor shall
consent to such transfer, in writing. No acceptance by Franchisor of royalty or
any other payments from any such trustee, receiver, assignee, person, or other
entity shall be deemed to have waived, or shall it waive, the need to obtain
Franchisor's consent or Franchisor's right to terminate this Agreement for any
transfer of Franchisee's interest under this Agreement without such consent.
22.6 Franchisor's Option to Terminate upon Insolvency. In the event
the rights of Franchisee hereunder shall be taken in execution or by the process
of law, or if Franchisee or Franchisee's Guarantor shall be adjudicated
insolvent, pursuant to the provisions of any present or future insolvency law
under State Law, or if any proceedings are filed by or against the Guarantor
under the Bankruptcy Code, or any similar provisions of any future federal
bankruptcy law, or if a Custodian, Receiver, or Trustee of the property of
Franchisee or the Guarantor shall be appointed, under State Law, by reason of
Franchisee's or the Guarantor's insolvency or inability to pay its debts as they
become due, or otherwise, or if any assignment shall be made of Franchisee's or
the Guarantor's property for the benefit of creditors under State Law, then, and
in such event, Franchisor may, at its option, terminate this Agreement and all
rights of Franchisee hereunder by giving Franchisee written notice of the
election to so terminate within sixty (60) days after the occurrence of such
event.
23. Security Interest. Franchisee hereby grants to Franchisor a security
interest in and to all assets of Franchisee (real, personal, and mixed, tangible
and intangible), including, without limitation, all equipment, fixtures,
furniture, inventory, general intangibles, trademarks, goodwill, customer lists,
contracts, contract rights, accounts, accounts receivable, documents,
instruments, and chattel papers, now owned or hereafter acquired by Franchisee,
or held by Franchisor, and all replacements and substitutions therefor, and
accessions thereto, and all products and proceeds therefrom, to secure the
payment and performance by Franchisee of any and all amounts and obligations due
Franchisor under this Agreement or under any other agreement, instrument, or
document between the parties. Franchisee, upon the request of Franchisor,
promptly shall execute whatever Financing Statements, agreements, instruments,
or documents, and take whatever other actions, as Franchisor may reasonably
request, in order to (i) perfect the security interest granted by this Article
23, or (ii) grant to Franchisor and perfect a security interest in such other
collateral as Franchisor may deem necessary to secure such payment and
performance. In connection therewith, Franchisee shall execute the form of
conditional assignment of lease currently employed by Franchisor, providing for
the assignment by Franchisee to Franchisor of the lease of the Outlet premises.
24. Miscellaneous.
24.1 Relationship of Parties. Franchisee shall neither have nor
exercise any authority, express, implied, or apparent, to act on behalf or as an
agent of Franchisor or any of its affiliates or subsidiaries for any purpose,
and shall take no action which might tend to
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create an apparent employer-employee or agency relationship between Franchisor
and Franchisee. No fiduciary relationship exists between Franchisor and
Franchisee. Franchisee is, and shall remain, an independent contractor
responsible for all obligations and liabilities of, and for all loss or damage
to, the Outlet and its business, and for all claims and demands based on damages
or destruction of property, or based on injury, illness, or death of any person
or persons, directly or indirectly arising from or in connection with the
operation of the Outlet, except as provided for in Article 15 above. Franchisor
shall neither have nor exercise the right to control the day-to-day managerial
operations of the Outlet, or to manage the business of the Outlet, or to hire,
fire, or discipline persons employed by Franchisee at the Outlet. Franchisor
shall have no right, authority or obligation hereunder to direct, consult with,
or participate in the decisions or actions of Franchisee concerning any of
Franchisee's environmental liabilities, responsibilities, or programs, or
training with respect to environmental impacts or concerns of its business.
Franchisee shall also post at prominent locations within its Outlet
signs bearing the following legend: "This facility is controlled and operated by
a qualified independent licensee of the Pizzeria Uno Corporation."
24.2 No Conflict with Other Agreements. Franchisee represents that
Franchisee is not a party to or subject to agreements which might conflict with
the terms of this Agreement, and agrees not to enter into any such agreement
during the License Term.
24.3 Cost of Enforcement. If either party institutes a law suit and
prevails in any court, arbitration, or any other type of action against the
other, or successfully defends any such action based, entirely or in part, on
the terms of this Agreement, the prevailing party shall be entitled to recover,
in addition to any judgment or award in its favor, reasonable attorneys' fees,
costs, and all expenses in connection with such action.
24.4 No Waiver. No failure, forbearance, neglect, or delay of any kind
or extent on the part of Franchisor, in connection with the enforcement or
exercise of any rights under this Agreement, shall affect or diminish
Franchisor's right to strictly enforce and take full benefit of each provision
of this Agreement at any time, whether at law for damages, in equity for
injunctive relief or specific performance, or otherwise. No custom, usage, or
practice with regard to this Agreement, Franchisee, or Franchisor's other
franchisees shall preclude, at any time, the strict enforcement of this
Agreement in accordance with its literal terms. No waiver by Franchisor of
performance of any provision of this Agreement shall constitute or be implied as
a waiver of Franchisor's right to enforce such provision at any future time.
24.5 Entire Agreement; Amendments. This Agreement, together with
documents incorporated by reference, such as the Operations Manual, and the
Related Agreements and all Exhibits hereto, constitutes the entire understanding
and agreement of the parties concerning the subject matter hereof and supersedes
all prior and contemporaneous understandings and agreements of the parties,
whether oral or written, pertaining to the Outlet. No interpretation, change,
termination, or waiver of any provision hereof, and no consent or approval
hereunder, shall be binding upon the other party or effective unless in writing
and signed by Franchisee and by Franchisor's President, Senior Vice President of
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Marketing and Business Development, Vice President in charge of franchising or
field services, or General Counsel, except that a waiver need be signed only by
the party waiving.
24.6 Severability. If any term or provision of this Agreement or the
application thereof to any person, property, or circumstances shall be invalid
or unenforceable, to any extent, the remainder of this Agreement shall be
unaffected thereby and shall remain in full force and effect, and each term and
provision shall be valid and enforced to the fullest extent permitted by law.
Should this prove impractical, Franchisor shall have the option of terminating
this Agreement upon written notice to Franchisee.
24.7 Governing Law, Jurisdiction, and Venue. This Agreement has been
made and accepted in the Commonwealth of Massachusetts and shall be interpreted
in accordance with and governed by the laws of the Commonwealth of Massachusetts
and any applicable federal and state franchise laws. Franchisee hereby consents
to non-exclusive jurisdiction in the Superior Court Department of the
Commonwealth of Massachusetts, in the County of Suffolk, or, in the alternative,
in the United States District Court for the District of Massachusetts, sitting
in the City of Boston.
24.8 Arbitration and Alternative Dispute Resolution. Except as
specifically otherwise provided in this Agreement, the parties agree that any
disputes between them, and any claims by either party that cannot be amicably
settled, may, if the parties agree, be determined by binding arbitration in
accordance with the appropriate rules of the American Arbitration Association at
a mutually agreed location, or by any other means of mutually acceptable
alternative dispute resolution, provided that, for arbitration:
(a) Both parties must agree in writing to submit their dispute
to arbitration and be bound by the result.
(b) A single arbitrator shall be selected by the American
Arbitration Association upon application of either party. Arbitration
proceedings shall be conducted in accordance with the appropriate rules then
prevailing of the American Arbitration Association. Judgment upon an award of
the arbitrator shall be binding, and shall be entered in a court of competent
jurisdiction.
(c) Nothing herein contained shall bar the right of either
party to obtain injunctive relief against threatened conduct that would violate
this Agreement and cause loss or damages.
24.9 Notices. All notices and other communications provided for herein
must be in writing and shall be delivered in person, or by certified or other
receipted mail, or by Federal Express, United Parcel Service, U.S. Express Mail,
or another reputable delivery service providing overnight delivery; if to
Franchisee, delivery shall be made at Franchisee's Address; if to Franchisor,
delivery shall be made at Franchisor's Address, Attention: Chief Operating
Officer, with a copy separately addressed and delivered to Franchisor's General
Counsel. Either party, by such notice, may change the address to which notices
shall be sent. Notices delivered in person shall be deemed given when delivered,
and mailed notices shall be deemed given on the date of delivery if by certified
or other receipted mail, (or three (3) days after mailing if the addressee fails
or refuses to claim such notice); and notices given by Federal Express or some
other form of overnight delivery shall be deemed given one (1) business day
after pick-up by the overnight delivery service provider. If a corporation or
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more than one individual is Franchisee, then Franchisee will authorize one
natural person as correspondent with authority to bind Franchisee.
24.10 Certain References. References to weeks and months mean calendar
weeks and calendar months. References to persons include legal entities, as well
as natural persons. Whenever the pronoun "he" or the possessive "his" are used
herein, they refer to masculine, feminine, and neuter genders, and also singular
and plural, as the context may require; the same applies to the uses of "it" and
"its," and "she" and "her." Except as otherwise specifically set forth in this
Agreement, this Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators,
successors, and assigns.
24.11 Offering Circular. Franchisee acknowledges that it received on
(date of receipt), a copy of Franchisor's Franchise Offering Circular dated
December 22, 1995 (Effective Date of Circular).
IN WITNESS WHEREOF, the parties hereto set their hands and seals, in
duplicate, the day and year written in Subarticle 1(q) of this Agreement.
PIZZERIA UNO CORPORATION
Witnesses:
__________________________________ By:_____________________________________
Its__________________________________
__________________________________
Witnesses:
__________________________________ ________________________________________
Franchisee
__________________________________
__________________________________ ________________________________________
Franchisee
__________________________________
__________________________________ ________________________________________
Franchisee
__________________________________
NOTE: Each signature should have two witnesses. The name of each witness should
be printed or typed under the witness's signature.
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GUARANTEE
The undersigned hereby request(s) Pizzeria Uno Corporation
("Franchisor") to enter into the foregoing Unit Franchise Agreement (the
"Agreement"), and as an inducement to Franchisor to do so, and additional
consideration therefor, the undersigned hereby (a) guarantee(s) unconditionally
to Franchisor the full, faithful, and punctual performance, fulfillment, and
observance of all of the obligations and liabilities of Franchisee under the
Agreement, and all other obligations and liabilities of Franchisee to
Franchisor; (b) waive(s) notice of and consent(s) to any and all amendments,
extensions, and renewals of the Agreement, any and all assignments, and any and
all other actions that may be permitted thereunder by Franchisee or Franchisor,
any and all other amendments, extensions, and renewals, any and all advances,
extensions, settlements, compromises, favors, and indulgences, any and all
receipts, substitutions, additions, exchanges, and releases of collateral, any
and all additions and releases of persons primarily or secondarily liable, and
any and all acceptances by Franchisor of negotiable instruments, commercial
paper, and other property, and agree(s) that none of the foregoing, should there
be any, shall discharge or affect in any way the liability of the undersigned
hereunder; (c) agree(s) that all rights and remedies of Franchisor under the
Agreement and hereunder shall survive and discharge moratorium, or other relief,
granted to any person primarily or secondarily liable in any proceeding under
federal or state law relating to bankruptcy, insolvency, or the relief or
rehabilitation of debtors, and any consent by Franchisor to or participation by
Franchisor in the proceeds of any assignment, trust, or mortgage for the benefit
of creditors, or any composition or arrangement of debts, may be made without
the undersigned being discharged or affected in any way thereby; (d) waive(s)
any right to require marshaling, or exhaustion of any right or remedy against
any person, collateral, or other property; and (e) waive(s) presentment, demand,
protest, and notice of default, non-payment, and protest, and all demands,
notices, and suretyship defenses, generally.
WITNESS the execution hereof under seal as of the day and year
written in Subarticle 1(q) of the Agreement.
WITNESSES: GUARANTOR(S):
__________________________________ ________________________________________
__________________________________
__________________________________ ________________________________________
__________________________________
NOTE: Each signature should have two witnesses. The name of each guarantor and
witness should be printed or typed under the respective signature.
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EXHIBIT A
APPROVED PRODUCT LIST
December 22, 1995
NOTE: EACH PRODUCT IS TO BE MADE ACCORDING TO UNO RECIPES AND
PROCEDURES.
CHICAGO'S ORIGINAL DEEP DISH PIZZA(R)
Served in two or three sizes: individual, regular, and/or large.
Required
1. Cheese & Tomato
2. Numero Uno(R)
3. Chicago Classic(TM)
4. Four Cheese
5. Prima Pepperoni
6. Chicken Fajita Pizza(R)
7. Spinoccoli(R)
8. Veggie
9. Shroom(R)
Optional
1. Sea Delico(R)
2. Bianco
3. Chicken & Roasted Red Pepper
4. White Pizza
EXHIBIT A - Page 1
160
GOURMET THIN CRUST PIZZAS
Served in two or three sizes: individual, regular, and/or large, as appetizers
or entrees. The small size may be prepared as calzones.
Required
1. Lemon-Lime Chicken
2. Superoni
3. Artipeggio
4. Harvest
Optional
1. Sausage
2. BBQ Chicken
3. Quesadilla
SANDWICHES (Minimum of eight items, not more than ten)
1. Stockyard Burger
2. Cheddar Burger
3. Bacon & Swiss Burger
4. Grilled Chicken Breast
5. Turkey Club
6. Philly Burger
7. Jumbo Hot Dog
8. Steak N'Cheese
9. Veggie Burger
10. Deluxe Chicken Breast
11. Buffalo Chicken
EXHIBIT A - Page 2
161
12. Roasted Red Pepper
13. Grilled Eggplant
APPETIZERS
Required
1. Pizza Skins(R)
2. Tuscany Bread
3. Garlic Bread
4. Buffalo Wings
Optional
1. Chicken Thumbs(R)
2. Veggie Dip
3. Cheese Sticks
4. Chips & Dip
5. Muchos Nachos
6. Bacon Cheddar Fries
7. Onion Rings
8. The Sampler
SOUPS
Required
1. Cream of Broccoli
Optional
1. Windy City Chili
EXHIBIT A - Page 3
162
2. Tomato Garden Vegetable
3. Sometime Soup (Soup of the Day)
KIDS MEALS
Optional
1. Pizza
2. Taters & Fraters(R)
3. Bruno's Pasta
4. Chix & Stix
5. Ocean Spray Juice Drinks
SALADS
Required
1. House
2. Caesar
3. Grilled Chicken
4. Chicken Caesar
5. Greek
Optional
1. Chicken Fajita
2. BBQ Chicken
SPECIALTIES
Required
1. Baked Chicken Spinoccoli
Optional
EXHIBIT A - Page 4
163
1. Chicken Frommaggi
2. Chicken Fajitas
3. Low Fat Fajitas
4. Baby Back Ribs
5. Ribs & Wings
6. Grilled Chicken
7. Sirloin Tips
8. Wings'N Thumbs
9. Top Sirloin Steak
PASTA
1. Tomato & Basil Marinara
2. Uno Sausage & Ziti
3. Pick A Pasta - Ziti or Fettuccine w/Meat, Marinara or Alfredo
4. Lasagna
5. Broccoli & Chicken Fettuccini
6. Vegetable & Pasta Stir Fry
7. Wild Mushroom Ravioli
8. Grilled Vegetable Primavera
LUNCH SPECIALS
Required
1. Priority Lunch(R)
2. Soup & Salad
3. Pasta of the Day
EXHIBIT A - Page 5
164
4. Light Lunch
5. Today's Sandwich
DESSERTS
Required
1. The All-American
2. The Smart Cookie
3. Brownie Bowl
4. Chicago Cheesecake
Optional
1. Mug of Ice Cream
2. Cappuccino Cake
3. Carrot Cake
4. Tira Mi Su
BEVERAGES
1. Soft drinks
2. Milk
3. Coffee
4. Tea / Iced Tea
5. Espresso (optional)
6. Cappuccino (optional)
7. Bottled beer
8. Draft beer
9. Wine (glass, small and large carafes)
EXHIBIT A - Page 6
165
10. Sangria (glass, small and large carafes)
11. Mineral waters
12. Non-alcoholic beer
LIQUORS
Full range required, including, but not limited to:
1. Long Island Iced Tea
2. Devious Daiquiris
3. Pina Colada
4. Mocha Frost
5. Mug of Margarita
6. Irish Coffee
7. Keoke Coffee
8. Cafe Uno
9. Cafe Royale
10. Dutch Coffee
11. Raspberry Cooler
12. Key Lime Freeze
TAKE-OUT
All Pizzeria Uno restaurants are required to have available for sale:
1. Fully baked pizza to take out.
2. Partially baked pizza to take out.
3. Frozen pizza to take out.
4. All burgers, sandwiches, salads, and soups to take out.
EXHIBIT A - Page 7
166
EXHIBIT B
UNITED STATES REGISTERED TRADEMARKS AND SERVICE MARKS
(as of December 22, 1995)
REGISTRATION
MARK NO. ISSUE DATE
---- --- ----------
PIZZERIA UNO 1,089,458 04/11/78
PIZZERIA DUE 1,143,732 12/16/80
PIZZA SKINS 1,314,885 01/15/85
UNO(sm) 1,329,014 04/02/85
SEA DELICO 1,331,089 04/16/85
SPINOCCOLI 1,404,309 08/05/86
TATERS & FRATERS 1,452,356 08/11/87
IT COULD ONLY HAPPEN AT UNO'S 1,585,188 02/27/90
UNO'S(sm) 1,586,246 03/06/90
THE WATCH A MA CALL IT 1,606,604 07/17/90
NUMERO UNO 1,613,333 09/11/90
UNO(TM) 1,615,917 10/02/90
PRIORITY LUNCH 1,639,304 03/26/91
PIZZA PLATTER 1,642,501 04/23/91
CHICKEN THUMBS 1,646,171 05/28/91
THE DUMB MONKEY 1,658,402 09/24/91
CHICAGO'S ORIGINAL DEEP DISH PIZZA(sm) 1,673,124 01/21/92
PLIZZETTAS 1,694,684 06/16/92
UNO (calzones) 1,757,093 03/09/93
CHICAGO'S ORIGINAL DEEP DISH PIZZA(TM) 1,772,694 05/18/93
SU CASA 1,780,720 07/06/93
BRUNO and Design 1,795,389 09/28/93
MONEY FOR SALE 1,799,788 10/19/93
THE GOOD BOOK 1,800,755 10/26/93
UNO 1,814,299 12/28/93
UNO & Design 1,846,019 07/19/94
EXHIBIT B - Page 1
167
FARM STAND CHICKEN 1,855,875 09/27/94
SHROOM 1,863,400 11/15/94
TAKERY 1,917,477 09/05/95
UNO (clothing) 1,928,784 10/24/95
UNITED STATES APPLICATIONS
FILING
MARK APPLICATION NO. DATE
---- -------------- ------
UNOWEAR 225,217 11/25/91
UNO (bakeware) 342,188 12/22/92
AUTENTICO 419,462 07/27/93
VITORIO 419,463 07/27/93
PIZZA BAGELS 466,686 12/06/93
PIZZA TAKERY 597,247 11/09/94
THE UNO WAY 614,930 12/23/94
PIZZERIA UNO CHICAGO BAR & GRILL 666,695 04/27/95
THE SMART COOKIE 667,470 04/28/95
THINSY (for pizza) 701,439 07/14/95
THINZETTAS 710,183 08/02/95
EXHIBIT B - Page 2
168
EXHIBIT C
PIZZERIA UNO VARIABLE ROYALTY PLAN
Franchisor and Franchisee agree that, to the extent of Franchisee's present and
continuing eligibility, the percentage rate of the Continuing License Fee shall
be determined in accordance with the Pizzeria Uno Variable Royalty Plan.
Concept
The Pizzeria Uno Variable Royalty Plan (the "Plan") enables an eligible
Franchisee to lower the percentage rate of the Continuing License Fee
(the "royalty rate") during the first five years following the opening
of the Outlet. The Plan accomplishes this by identifying Franchisee's
Total Investment in the Outlet, then dividing the Outlet's Annual Gross
Sales by the Total Investment and then multiplying that result by the
royalty rate required by the Agreement.
Formula
Step 1. If Franchisee leases the Outlet premises, begin with the
minimum (base) rent to be paid during the first five years of the lease
for the Outlet, dividing it by five to determine the average for one
year. Multiply this average by seven and go to Step 2. If Franchisee
owns the Outlet premises, begin with the purchase price and immediately
go to Step 2.
Step 2. To the final answer obtained in Step 1., add the Unit Franchise
Fee paid for the Outlet plus the cost of the Outlet's fixed assets
(furniture, fixtures, equipment, and premises improvements, excluding
"soft costs"). The resulting sum will be the Total Investment.
Step 3. Determine the Annual Gross Sales for the Outlet. For the period
before the first January 1 establishment of the royalty for that
calendar year, sales will be annualized to determine the Annual Gross
Sales (see item 1.(a) under "Conditions"), and the royalty rate will be
adjusted on a monthly basis. The first time the royalty rate is
established on January 1 for that calendar year (see items 1.(b) and
1.(c) under "Conditions"), Franchisor will determine the annualized
gross sales for the immediately preceding cumulative operating history
of the Outlet, up to, but not exceeding, 52 full weeks, and that
determination will equal the Annual Gross Sales. After the first
January 1 on which the royalty rate is established for that calendar
year, Franchisor, on January 1 of each year, will determine the Annual
Gross Sales to be equal to total gross sales by the Outlet during the
immediately preceding calendar year.
169
Step 4. Divide the Annual Gross Sales (Step 3.) by the Total Investment
(Steps 1. and 2.). If the result is one or greater, Franchisee will be
subject to the royalty rate stated in the Agreement which governs the
Outlet. If the result is less than one, go to Step 5.
Step 5. Multiply the decimal fraction resulting in Step 4. by the
royalty rate stated in the Agreement which governs the Outlet. The
result will be the royalty rate until the next calculation date under
the Plan, provided that the applicable royalty rate may not be less
than 3.00%.
EXAMPLE: Franchisee will pay an average of $100,000 minimum
annual rent during the first five years of the lease
term, paid a $30,000 Unit Franchise Fee, has a fixed
assets cost of $1,200,000, and has Annual Gross Sales
of $1,650,000. The Agreement states a royalty rate of
5%.
Step 1. $100,000 x 7 = $700,000
Step 2. $700,000 + $30,000 + $1,200,000 = $1,930,000
Step 3. Annual Gross Sales = $1,650,000 (given)
Step 4. $1,650,000 / $1,930,000 = .85
Step 5. 5% x.85 = 4.25%
Therefore, the Plan results in a royalty rate of 4.25% instead of 5%.
Conditions
1. Using the Plan Formula, the royalty rate will be calculated
and set initially on a calendar month basis, and then on a
calendar year basis, subject to the following:
(a) Until the first January 1 calculation establishing
the royalty rate for that calendar year, (see (b) and
(c), below), the royalty rate will be calculated as
of the end of each calendar month, based on
annualized gross sales during the immediately
preceding, cumulative operating history of the
Outlet, up to, but not exceeding, 52 full weeks. The
calculation of annualized gross sales will provide
the Annual Gross Sales for the Plan Formula (Step
3.). The royalty rate so determined will be the
royalty rate for the most recently ended calendar
month.
(b) If the Plan is effective, as to the Outlet, before
July 1 in a calendar year, the first January 1
calculation establishing the royalty rate for a
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full calendar year (subject to Condition 2., below)
will be January 1 of the next calendar year following
the calendar year of such effectiveness. (Example:
The Plan is effective, as to the Outlet, June 24,
1993; the royalty rate will be calculated January 1,
1994, for calendar year 1994, based on gross sales
during the immediately preceding 27 weeks.)
(c) If the Plan is effective, as to the Outlet, on or
after July 1 in a calendar year, the first January 1
calculation establishing the royalty rate for a full
calendar year (subject to Condition 2., below) will
be January 1 of the second calendar year following
the calendar year of such effectiveness. (Example:
The Plan is effective, as to the Outlet, August 19,
1993; the royalty rate will be calculated January 1,
1995, for calendar year 1995, based on gross sales
during calendar year 1994.)
2. The Plan is available only during first five years of the
franchised Outlet, beginning on the original opening date.
(For example, if the Outlet has been open for exactly two
years when it is placed on the Plan, it can remain on the Plan
only for three years.)
3. Participation in the Plan may not be assigned, delegated, or
transferred by Franchisee.
4. The applicable royalty rate may be no less than 3.00% and may
be no greater than the royalty rate stated in the Agreement
which governs the Outlet (see Steps 4. and 5. of the Plan
Formula). If the Plan Formula yields a royalty rate outside of
this range, the applicable royalty rate will be adjusted to be
within this range. (Example: The Plan Formula yields a royalty
rate of 2.38%; the applicable royalty rate will be adjusted to
3.00%.)
5. The Plan will not modify any terms or provisions of the
Agreement (including, but not limited to, the Minimum
Continuing License Fee, as defined in Article 1. of the
Agreement) other than the royalty rate.
6. Franchisee must make timely payments of the Continuing License
Fee, the Advertising Fee, and all other payments required to
be made by Franchisee to Franchisor, each in strict, literal
compliance with the applicable terms for each such payment.
Failure of Franchisee to comply with this condition shall
result in Franchisee being required to pay the maximum
Continuing License Fee, as provided by the Agreement, in the
month in which non-compliance with such payment terms occurs.
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AREA DEVELOPMENT AGREEMENT
FOR FULL-SERVICE RESTAURANTS
Effective _____________________ , 199 , Pizzeria Uno Corporation, a
Delaware corporation ("Franchisor"), and ________________________________
("Franchisee") hereby agree as follows:
A. Exclusive Development Rights. Under and subject to the terms and
conditions of this Agreement and the Pizzeria Uno Unit Franchise Agreement (the
"Unit Agreement"), the NOW CURRENT form of which is attached hereto as Exhibit
A, Franchisor hereby grants to Franchisee the exclusive right to construct and
operate ____________ Pizzeria Uno Full-Service Restaurant Outlets (singularly or
cumulatively hereinafter referred to as the "Outlet" or "Outlets") in the
following geographical area (the "Territory"):
Franchisee shall execute a separate, THEN CURRENT (i.e., most
recently revised form of) Unit Agreement with respect to each Outlet opened
pursuant to this Agreement.
B. Development Schedule. Franchisee agrees to open Outlets within the
Territory in accordance with the following schedule (the "Development
Schedule"):
Outlet Number Open for Business Date
1. ________________________________
2. ________________________________
3. ________________________________
4. ________________________________
5. ________________________________
An initial proposed Outlet must be submitted for Franchisor's approval
within six (6) months of the date of this Agreement. If such approval is not
obtained within that time, Franchisor may terminate this Agreement and retain
the entire Area Development Fee paid hereunder.
C. Area Development Fee. Franchisee shall pay an Area Development Fee
to Franchisor in the amount of ____________________ Dollars ($__________) as
consideration for the Franchisee's privilege to develop the Territory with the
building of Outlets in accord
172
with the Development Schedule. This sum is payable to Franchisor by Franchisee
upon the execution of this Agreement by Franchisee. This sum of _______ Thousand
Dollars ($______) shall be paid solely in consideration of the granting of the
exclusive rights in the Territory and shall be non-refundable. The Unit
Franchise Fee applicable in the year of this Agreement shall also be paid by
Franchisee to Franchisor upon the execution by Franchisee of the THEN CURRENT
Unit Agreement for an Outlet. Nothing herein shall reduce or constitute a waiver
of Franchisee's obligations to pay any other amounts due under the respective,
THEN CURRENT Unit Agreements that eventually are executed for each Outlet
located in the Territory pursuant to the terms of this Agreement.
D. Default and Termination.
1. The occurrence of any of the following events shall constitute
an event of default under this Agreement:
(a) Franchisee, in any respect and for any reason, shall
fail to meet the Development Schedule by failing to develop Outlets for opening
on or before the Open for Business Dates specified in Section B herein.
(b) Franchisee shall use the licensed rights, or any
Intellectual Properties (as defined in the THEN CURRENT Unit Agreement) of
Franchisor, or shall commence construction of any Outlet, except pursuant to,
and in accordance with, a valid, effective, and THEN CURRENT Unit Agreement.
(c) Franchisee, or any person controlling, controlled by, or
under common control with Franchisee, shall have any interest, either direct or
indirect, in the ownership or operation of any business which meets the
definition of "similar" found in Section 18.1 of the now current Unit Agreement,
or such definition found in the respective THEN CURRENT Unit Agreement for each
Outlet.
(d) Franchisee shall purport to effect any assignment or
encumbrance of this Agreement, or of Franchisee's rights hereunder, except
pursuant to the terms of the respective Unit Agreement for each Outlet.
(e) Franchisee shall default in the performance of any
obligation imposed upon Franchisee under this Agreement or under any Unit
Agreement or any of the Manuals.
(f) Franchisee, or any person controlling, controlled by, or
under common control with Franchisee, shall be adjudicated a bankrupt or become
insolvent; or if a receiver (permanent or temporary) of Franchisee's or of any
such person's property, or
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any part thereof, shall be appointed by a court of competent jurisdiction; or if
Franchisee or any such person shall make a general assignment for the benefit of
creditors; or if a final judgment against Franchisee or any such person shall
remain unsatisfied of record longer than thirty (30) days; or if execution shall
be levied against Franchisee's or any such person's business or property; or
suit to foreclose any lien or mortgage against any Outlet premises and/or
equipment shall be instituted against Franchisee or any such person and not be
dismissed within thirty (30) days.
(g) Franchisee shall default in the performance of any term,
condition, or obligation in payment of any indebtedness to Franchisor,
Franchisee's suppliers, or others arising out of the purchase of supplies, or
the purchase or lease of equipment for operation of any Outlet, and if any such
default is not cured within thirty (30) days.
2. Upon the occurrence of any of the events of default set forth in
this Article D., Franchisor, without prejudice to any other rights or remedies
contained in this Agreement or provided by law, may terminate this Agreement,
which termination shall be effective thirty (30) days after written notice is
given by Franchisor to Franchisee if such defaults are not cured within such
thirty (30)-day period, provided, however, that if any such default is also a
default under a Unit Agreement which provides for a cure period of ten (10)
days, the cure period for the said default under this Agreement also shall be
ten (10) days. In the event of any such default, Franchisor, at its option, may
terminate this Agreement as it applies to any one or more franchise locations
which, at the time of such default, have not been opened for business pursuant
to the provisions of this Agreement. In the event of any termination, without
limitation as to Franchisor's right to seek its full measure of compensatory
damages, the consideration paid to Franchisor by Franchisee for the granting of
exclusive rights in the Territory shall be retained by Franchisor, and
Franchisor shall not be obligated to refund to Franchisee any part of such
payment under any circumstances. Franchisor also shall have the right, upon any
termination hereunder, to grant rights for the construction and operation of
Outlets within the Territory to any other person or entity, or Franchisor itself
may elect to develop and construct Outlets within the Territory.
E. Right of First Refusal. If, at any time or from time to time, within
the term of any Unit Agreement pursuant to which Franchisee shall open a Outlet
within the Territory, and following full compliance by Franchisee with the
Development Schedule, Franchisor determines that it is desirable to operate one
or more additional Outlets within the Territory, and provided that Franchisee is
then in full compliance with all terms and conditions of all Unit Agreements
pursuant to which Franchisee is then operating Outlets, Franchisor may create,
operate or permit creation and operation of additional food service facilities
within the Territory, but Franchisee shall have a right of first refusal to
obtain the developmental rights to all such additional Outlets upon such terms
and conditions as are
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174
then determined by Franchisor. If Franchisee shall have such right of first
refusal, Franchisor shall advise Franchisee, in writing, of the terms and
conditions for the acquisition of the developmental rights for all such
additional Outlets. Franchisee must notify Franchisor, in writing, within thirty
(30) days of the receipt of such notice, if Franchisee wishes to acquire the
developmental rights to all such additional Outlets which Franchisor then deems
advisable to construct within the Territory. If Franchisee does not exercise
this right of first refusal, Franchisor, within ninety (90) days from the
expiration of the thirty (30)-day period, may grant developmental rights to any
one or more of such additional Outlets to any other persons or entities under
the same terms and conditions, or Franchisor may elect to develop and construct
any one or more of such additional Outlets within the Territory, as it deems
desirable; provided, however, that no person, other than Franchisee, shall be
permitted to construct, own, or operate a Outlet, within the "Territory" of any
Pizzeria Uno Outlet, as defined in the Unit Agreement.
F. Relationship of Parties. The parties hereto are completely separate
entities, and are not partners, joint venturers, or agents of the other in any
sense. Neither party has the power to obligate or bind the other. Franchisee
shall not hold itself out as an agent, legal representative, joint venturer,
partner, employee, or servant of Franchisor for any purpose whatsoever.
G. General Provisions.
1. Waiver by Franchisor of any violation or default by Franchisee
shall not alter or impair Franchisor's right with respect to any subsequent
violation or default, and any delay or omission of Franchisor to exercise any
right arising from such violation or default shall not alter or impair
Franchisor's right as to the same or any future violation or default.
2. Except as otherwise specifically set forth in this Agreement,
this Agreement shall inure to and be binding upon the parties hereto and their
respective heirs, executors, administrators, successors, and assigns.
3. Every notice under this Agreement shall be in writing and
delivered in person, or by certified or other receipted mail, or by Federal
Express, United Parcel Service, U.S. Express Mail, or another reputable delivery
service providing overnight delivery, addressed as follows:
If to Franchisor:
Pizzeria Uno Corporation
100 Charles Park Road
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175
West Roxbury, Massachusetts 02132-4985
Attention: Chief Operating Officer
A separate copy of each notice to Franchisor shall be
separately addressed and delivered to General Counsel for
Franchisor.
If to Franchisee:
_____________________________________
_____________________________________
_____________________________________
Either party, by such notice, may change the address to which notices
shall be sent. Notices delivered in person shall be deemed given when delivered,
and mailed notices shall be deemed given on the date of delivery if by certified
mail or other receipted mail, (or three (3) days after mailing if the addressee
fails or refuses to claim such notice); and notices given by Federal Express or
some other form of overnight delivery shall be deemed given one (1) business day
after pick-up by the overnight delivery service provider.
4. If any term or provision of this Agreement, or the application
thereof to any person, property, or circumstance, shall be invalid or
unenforceable to any extent, the remainder of this Agreement shall be unaffected
thereby and shall remain in full force and effect, and each term and provision
shall be valid and enforced to the fullest extent permitted by law.
5. This instrument contains the entire Agreement of the parties,
and supersedes, cancels, and revokes any and all other agreements between the
parties relating to the subject matter of this Agreement. There are no
representations or warranties, either oral or written, except those contained
herein. This Agreement may be modified only by an agreement, in writing, signed
by each party hereto.
6. This Agreement has been entered into and shall be governed by,
and construed and enforced in accordance with, the laws of the Commonwealth of
Massachusetts.
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Franchisee hereby consents to personal and subject matter jurisdiction of the
Superior Court of Suffolk County, Massachusetts.
WITNESS the execution hereof, under seal, as of the day and year first
above written.
FRANCHISOR:
WITNESS: PIZZERIA UNO CORPORATION
__________________________________ By:_____________________________________
__________________________________ Its:____________________________________
FRANCHISEE:
WITNESS: ________________________________________
__________________________________ By:_____________________________________
__________________________________ Its:____________________________________
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AMENDMENT TO PIZZERIA UNO CORPORATION
UNIT FRANCHISE AGREEMENT FOR FULL-SERVICE RESTAURANT
FOR THE STATE OF CALIFORNIA
The Pizzeria Uno Corporation Unit Franchise Agreement for Full-Service
Restaurant between _______________________ ("Franchisee") and Pizzeria Uno
Corporation ("Franchisor") dated ____________________ (the "Agreement") shall be
amended by the addition of the following language, which shall be considered an
integral part of the Agreement:
CALIFORNIA LAW MODIFICATIONS
1. The California Department of Corporations requires that certain
provisions contained in franchise documents be amended to be consistent with
California law, including the California Franchise Investment Law, CAL. BUS. &
PROF. CODE Section 31000 et seq., and the California Franchise Relations Act,
CAL. BUS. & PROF. CODE Section 20000 et seq. To the extent that the Agreement
contains provisions that are inconsistent with the following, such provisions
are hereby amended:
a. If the Agreement contains a provision regarding
termination and nonrenewal that is inconsistent
with California Business and Professions Code
Sections 20000 through 20043 and the Federal
Bankruptcy Code, these laws will control.
b. If the Agreement requires Franchisee to execute a
release of claims, such release shall exclude
claims arising under the California Franchise
Investment Law and the California Franchise
Relations Act.
c. If the Agreement requires Franchisee to pay
liquidated damages that are inconsistent with
California Civil Code Section 1671, such law shall
prevail.
d. If the Agreement contains a covenant not to
compete which extends beyond the expiration or
termination of the Agreement, the covenant may be
unenforceable under California law.
e. If the Agreement requires litigation, arbitration,
or mediation to be conducted in a forum other than
the State of California, the requirement may be
unenforceable under California law.
f. If the Agreement requires that it be governed by a
state's law, other than the State of California,
such requirement may be unenforceable.
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178
2. Each provision of this Amendment shall be effective only to the
extent that the jurisdictional requirements of the California law applicable to
the provision are met independent of this Amendment. This Amendment shall have
no force or effect if such jurisdictional requirements are not met.
IN WITNESS WHEREOF, the parties hereto set their hands and seals, in
duplicate, on this ___ day of ___________, 199_.
PIZZERIA UNO CORPORATION
Witnesses:
____________________________ By: ________________________________
Its ____________________________
____________________________
Witnesses:
____________________________ ____________________________________
Franchisee
____________________________
____________________________ ____________________________________
Franchisee
____________________________
____________________________ ____________________________________
Franchisee
____________________________
NOTE: Each signature should have two witnesses. The name of each witness should
be printed or typed under the witness's signature.
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AMENDMENT TO PIZZERIA UNO CORPORATION
UNIT FRANCHISE AGREEMENT FOR FULL-SERVICE RESTAURANT
FOR THE STATE OF HAWAII
The Pizzeria Uno Corporation Unit Franchise Agreement for Full-Service
Restaurant between ________________________ ("Franchisee") and Pizzeria Uno
Corporation ("Franchisor") dated _____________________ (the "Agreement") shall
be amended by the addition of the following language, which shall be considered
an integral part of the Agreement:
HAWAII LAW MODIFICATIONS
1. The Director of the Hawaii Department of Commerce and Consumer
Affairs requires that certain provisions contained in franchise documents be
amended to be consistent with Hawaii law, including the Hawaii Franchise
Investment Law, Hawaii Revised Statutes, Title 26, Chapter 482E-1 Through
482E-12 (1988). To the extent that the Agreement contains provisions that are
inconsistent with the following, such provisions are hereby amended:
a. The Hawaii Franchise Investment Law provides rights to
Franchisee concerning nonrenewal, termination and transfer
of the Agreement. If the Agreement contains a provision that
is inconsistent with the Law, the Law will control. Among
those rights, the Law may require that upon termination or
nonrenewal Franchisor repurchase for fair market value
Franchisee's inventory, supplies, equipment and furnishings
purchased from Franchisor or a supplier designated by
Franchisor, provided that personalized materials which have
no value to Franchisor need not be repurchased. If the
non-renewal or termination is for the purpose of converting
Franchisee's business to one owned and operated by
Franchisor, Franchisor may, additionally, be obligated to
compensate Franchisee for loss of goodwill. Franchisor may
deduct all amounts due from Franchisee and any costs related
to the transportation or disposition of items repurchased
against any payment for those items. If the parties cannot
agree on the fair market value, fair market value shall be
determined in the manner set forth in the Agreement. If the
Agreement does not provide for determination of the fair
market value of assets for purchase by Franchisor, such
amount shall be determined by an independent appraiser
approved by both parties, and the costs of the appraisal
shall be shared equally by the parties.
b. If the Agreement requires Franchisee to execute a release of
claims, such release shall exclude claims arising under the
Hawaii Franchise Investment Law.
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180
2. Each provision of this Amendment shall be effective only to the
extent that the jurisdictional requirements of the Hawaii Franchise Investment
Law applicable to the provision are met independent of this Amendment. This
Amendment shall have no force or effect if such jurisdictional requirements are
not met.
IN WITNESS WHEREOF, the parties hereto set their hands and seals, in
duplicate, on this ____ day of _______, 199_.
PIZZERIA UNO CORPORATION
Witnesses:
____________________________ By: ________________________________
Its ____________________________
____________________________
Witnesses:
____________________________ ____________________________________
Franchisee
____________________________
____________________________ ____________________________________
Franchisee
____________________________
____________________________ ____________________________________
Franchisee
____________________________
NOTE: Each signature should have two witnesses. The name of each witness should
be printed or typed under the witness's signature.
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AMENDMENT TO PIZZERIA UNO CORPORATION
UNIT FRANCHISE AGREEMENT FOR FULL-SERVICE RESTAURANT
FOR THE STATE OF ILLINOIS
The Pizzeria Uno Corporation Unit Franchise Agreement for Full-Service
Restaurant between ________________________ ("Franchisee") and Pizzeria Uno
Corporation ("Franchisor") dated _____________________ (the "Agreement") shall
be amended by the addition of the following language, which shall be considered
an integral part of the Agreement:
ILLINOIS LAW MODIFICATIONS
1. The Illinois Attorney General's Office requires that certain
provisions contained in franchise documents be amended to be consistent
with Illinois law, including the Franchise Disclosure Act of 1987, Il1.
Rev. Stat. ch. 815 para. 705/1 - 705/44 (1994). To the extent that the
Agreement contains provisions that are inconsistent with the following,
such provisions are hereby amended:
a. Illinois Franchise Disclosure Act paragraphs 705/19 and
705/20 provide rights to Franchisee concerning nonrenewal
and termination of the Agreement. If the Agreement
contains a provision that is inconsistent with such
provisions of the Act, the Act will control.
b. If the Agreement requires Franchisee to execute a release
of claims or to acknowledge facts that would negate or
remove from judicial review any statement,
misrepresentation or action that would violate the Act, or
a rule or order under the Act, such release shall exclude
claims arising under the Illinois Franchise Disclosure
Act, and such acknowledgments shall be void and are hereby
deleted with respect to claims under the Act.
c. If the Agreement requires litigation to be conducted in a
forum other than the State of Illinois, the requirement
shall be void with respect to claims under the Illinois
Franchise Disclosure Act.
d. If the Agreement requires that it be governed by a state's
law, other than the State of Illinois, to the extent that
such law conflicts with the Illinois Franchise Disclosure
Act, the Act will control.
2. The first paragraph of the cover page of the Agreement shall
be amended to delete the last sentence thereof.
3. Each provision of this Amendment shall be effective only to
the extent that the jurisdictional requirements of the Illinois
Franchise Disclosure Act, with respect to each such provision, are met
independent
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182
of this Amendment. This Amendment shall have no force or effect if such
jurisdictional requirements are not met.
IN WITNESS WHEREOF, the parties hereto set their hands and seals, in
duplicate, on this ____ day of __________,199_.
PIZZERIA UNO CORPORATION
Witnesses:
____________________________ By: ________________________________
Its ____________________________
____________________________
Witnesses:
____________________________ ____________________________________
Franchisee
____________________________
____________________________ ____________________________________
Franchisee
____________________________
____________________________ ____________________________________
Franchisee
____________________________
NOTE: Each signature should have two witnesses. The name of each witness should
be printed or typed under the witness's signature.
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AMENDMENT TO PIZZERIA UNO CORPORATION
UNIT FRANCHISE AGREEMENT FOR FULL-SERVICE RESTAURANT
FOR THE STATE OF INDIANA
The Pizzeria Uno Corporation Unit Franchise Agreement for Full-Service
Restaurant between ________________________ ("Franchisee") and Pizzeria Uno
Corporation ("Franchisor") dated _____________________ (the "Agreement") shall
be amended by the addition of the following language, which shall be considered
an integral part of the Agreement:
INDIANA LAW MODIFICATIONS
1. The Indiana Securities Commissioner requires that certain
provisions contained in franchise documents be amended to be consistent
with Indiana law, including the Indiana Franchises Act, Ind. Code Ann.
Section 1 - 51 (1994) and the Indiana Deceptive Franchise Practices Act,
Ind. Code Ann. Section 23-2-2.7 (1985). To the extent that the Agreement
contains provisions that are inconsistent with the following, such
provisions are hereby amended:
a. If the Agreement contains a provision regarding
termination and nonrenewal that is inconsistent
with these provisions of the Indiana Deceptive
Franchise Practices Act, the Act will control.
b. If the Agreement requires Franchisee to execute a
release of claims or to acknowledge facts that
would negate or remove from judicial review any
statement, misrepresentation or action that would
violate the Act, or a rule or order under the
Act, such release shall exclude claims arising
under the Indiana Deceptive Franchise Practices
Act and the Indiana Franchises Act, and such
acknowledgments shall be void with respect to
claims under the Acts.
c. If the Agreement contains covenants not to
compete upon expiration or termination of the
Agreement that are inconsistent with the Indiana
Deceptive Franchise Practices Act, the
requirements of the Act will control.
d. The Indiana Deceptive Franchise Practices Act
provides that substantial modification of the
Agreement by Franchisor requires written consent
of Franchisee. If the Agreement contains
provisions that are inconsistent with this
requirement, the Act will control.
e. If the Agreement requires litigation to be
conducted in a forum other than the State of
Indiana, the requirement may be unenforceable as
a limitation on litigation under the Indiana
Deceptive Franchise Practices Act Section
23-2-2.7(10).
f. If the Agreement requires that it be governed by
a state's law, other than the State of Indiana,
to the extent that such law conflicts with the
Indiana Deceptive Franchise Practices Act and the
Indiana Franchises Act, the Acts will control.
2. Each provision of this Amendment shall be effective only to
the extent that the jurisdictional requirements of the Indiana Deceptive
Franchise Practices Act and the Indiana Franchises Act, with respect
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184
to each such provision, are met independent of this Amendment. This Amendment
shall have no force or effect if such jurisdictional requirements are not met.
IN WITNESS WHEREOF, the parties hereto set their hands and seals, in
duplicate, on this ___ day of ________, 199_.
PIZZERIA UNO CORPORATION
Witnesses:
____________________________ By: ________________________________
Its ____________________________
____________________________
Witnesses:
____________________________ ____________________________________
Franchisee
____________________________
____________________________ ____________________________________
Franchisee
____________________________
____________________________ ____________________________________
Franchisee
____________________________
NOTE: Each signature should have two witnesses. The name of each witness should
be printed or typed under the witness's signature.
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AMENDMENT TO PIZZERIA UNO CORPORATION
UNIT FRANCHISE AGREEMENT FOR FULL-SERVICE RESTAURANT
FOR THE STATE OF MARYLAND
The Pizzeria Uno Corporation Unit Franchise Agreement for Full-Service
Restaurant between ________________________ ("Franchisee") and Pizzeria Uno
Corporation ("Franchisor") dated ____________________ (the "Agreement") shall be
amended by the addition of the following language, which shall be considered an
integral part of the Agreement:
MARYLAND LAW MODIFICATIONS
1. The Maryland Securities Division requires that certain
provisions contained in franchise documents be amended to be consistent
with Maryland law, including the Maryland Franchise Registration and
Disclosure Law, Md. Code Ann., Bus. Reg. Sections 14-201 - 14-233
(1994). To the extent that this Agreement contains provisions that are
inconsistent with the following, such provisions are hereby amended:
a. If the Agreement requires Franchisee to execute a
release of claims or to acknowledge facts that would
negate or remove from judicial review any statement,
misrepresentation or action that would violate the
Law, or a rule or order under the Law, such release
shall exclude claims arising under the Maryland
Franchise Registration and Disclosure Law, and such
acknowledgments shall be void with respect to claims
under the Law.
b. If the Agreement requires litigation to be conducted
in a forum other than the State of Maryland, the
requirement shall not be interpreted to limit any
rights Franchisee may have under Sec. 14-216 (c)(25)
of the Maryland Franchise Registration and
Disclosure Law to bring suit in the state of
Maryland.
2. Each provision of this Amendment shall be effective only to
the extent that the jurisdictional requirements of the Maryland
Franchise Registration and Disclosure Law, with respect to each such
provision,
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186
are met independent of this Amendment. This Amendment shall have no force or
effect if such jurisdictional requirements are not met.
IN WITNESS WHEREOF, the parties hereto set their hands and seals, in
duplicate, on this ____ day of ___________, 199_.
PIZZERIA UNO CORPORATION
Witnesses:
____________________________ By: ________________________________
Its ____________________________
____________________________
Witnesses:
____________________________ ____________________________________
Franchisee
____________________________
____________________________ ____________________________________
Franchisee
____________________________
____________________________ ____________________________________
Franchisee
____________________________
NOTE: Each signature should have two witnesses. The name of each witness should
be printed or typed under the witness's signature.
187
AMENDMENT TO PIZZERIA UNO CORPORATION
UNIT FRANCHISE AGREEMENT FOR FULL-SERVICE RESTAURANT
AND OFFERING CIRCULAR
FOR THE STATE OF MINNESOTA
The Pizzeria Uno Corporation Unit Franchise Agreement for Full-Service
Restaurant between ________________________ ("Franchisee") and Pizzeria Uno
Corporation ("Franchisor") dated ___________________ (the "Agreement") shall be
amended by the addition of the following language, which shall be considered an
integral part of the Agreement:
MINNESOTA LAW MODIFICATIONS
1. The Commissioner of Commerce for the State of Minnesota requires
that certain provisions contained in franchise documents be amended to be
consistent with Minnesota Franchise Act, Minn. Stat. Section 80.01 et seq.,
and of the Rules and Regulations promulgated under the Act (collectively the
"Franchise Act"). To the extent that the Agreement and Offering Circular
contain provisions that are inconsistent with the following, such provisions
are hereby amended:
a. The Minnesota Department of Commerce requires that
Franchisor indemnify Minnesota franchisees against liability
to third parties resulting from claims that the Franchisees'
use of the intellectual Properties infringes trademark
rights of the third party. If the Agreement contains a
provision that is inconsistent with the Franchise Act, the
provisions of the Agreement shall be superseded by the Act's
requirements and shall have no force or effect.
b. Franchise Act, Sec. 80C.14, Subd. 4., requires, except in
certain specified cases, that a franchisee be given written
notice of a franchisor's intention not to renew 180 days
prior to expiration of the franchise and that the franchisee
be given sufficient opportunity to operate the franchise in
order to enable the franchisee the opportunity to recover
the fair market value of the franchise as a going concern.
If the Agreement contains a provision that is inconsistent
with such requirement of the Franchise Act, the provisions
of the Agreement shall be superseded by the Act's
requirements and shall have no force or effect.
c. Franchise Act, Sec. 80C.14, Subd. 3., requires, except in
certain specified cases that a franchisee be given 90 days
notice of termination (with 60 days to cure). If the
Agreement contains a provision that is inconsistent with
such requirement of the Franchise Act, the provisions of the
Agreement shall be superseded by the Act's requirements and
shall have no force or effect.
d. If the Agreement requires Franchisee to execute a release of
claims or to acknowledge facts that would negate or remove
from judicial review any statement, misrepresentation or
action that would violate the Franchise Act, such release
shall exclude claims arising under the Franchise Act, and
such acknowledgments shall be void with respect to claims
under the Act.
e. If the Agreement requires that it be governed by a state's
law, other than the State of Minnesota or arbitration or
mediation, those provisions shall not in any way abrogate or
reduce any rights of the Franchisee as provided for in the
Franchise Act, including the right to submit matters to the
jurisdiction of the courts of Minnesota.
188
2. Each provision of this Agreement shall be effective only to the
extent that the jurisdictional requirements of the Minnesota law applicable to
the provision are met independent of this Amendment. This Amendment shall have
no force or effect if such jurisdictional requirements are not met.
IN WITNESS WHEREOF, the parties hereto set their hands and seals, in
duplicate, on this ____ day of ___________, 199_.
PIZZERIA UNO CORPORATION
Witnesses:
____________________________ By: ________________________________
Its ____________________________
____________________________
Witnesses:
____________________________ ____________________________________
Franchisee
____________________________
____________________________ ____________________________________
Franchisee
____________________________
____________________________ ____________________________________
Franchisee
____________________________
NOTE: Each signature should have two witnesses. The name of each witness should
be printed or typed under the witness's signature.
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189
AMENDMENT TO PIZZERIA UNO CORPORATION
UNIT FRANCHISE AGREEMENT FOR FULL-SERVICE RESTAURANT
FOR THE STATE OF NEW YORK
The Pizzeria Uno Corporation Unit Franchise Agreement for full-Service
Restaurant between ________________________ ("Franchisee") and Pizzeria Uno
Corporation ("Franchisor") dated ___________________ (the "Agreement") shall be
amended by the addition of the following language, which shall be considered an
integral part of the Agreement:
NEW YORK LAW MODIFICATIONS
1. The New York Department of Law requires that certain provisions
contained in franchise documents be amended to be consistent with New York
law, including the General Business Law, Article 33, Sections 680 through
695 (1989). To the extent that the Agreement contains provisions that are
inconsistent with the following, such provisions are hereby amended:
a. If the Agreement requires Franchisee to execute a
release of claims or to acknowledge facts that would
negate or remove from judicial review any statement,
misrepresentation or action that would violate the
General Business Law, or any regulation, rule or order
under the Law, such release shall exclude claims
arising under the New York General Business Law,
Article 33, Section 680 through 695 and the regulations
promulgated thereunder, and such acknowledgments shall
be void. It is the intent of this provision that
non-waiver provisions of Sections 687.4 and 687.5 of
the General Business Law be satisfied.
b. If the Agreement requires that it be governed by a
state's law, other than the State of New York, the
choice of law provision shall not be considered to
waive any rights conferred upon the Franchisee under
the New York General Business Law, Article 33,
Sections 680 through 695.
2. Each provision of this Amendment shall be effective only to the
extent that the jurisdictional requirements of the New York General Business
Law, with respect to each such provision, are met
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190
independent of this Amendment. This Amendment shall have no force or effect if
such jurisdictional requirements are not met.
IN WITNESS WHEREOF, the parties hereto set their hands and seals, in
duplicate, on this ______ day of _________, 199_.
PIZZERIA UNO CORPORATION
Witnesses:
____________________________ By: ________________________________
Its ____________________________
____________________________
Witnesses:
____________________________ ____________________________________
Franchisee
____________________________
____________________________ ____________________________________
Franchisee
____________________________
____________________________ ____________________________________
Franchisee
____________________________
NOTE: Each signature should have two witnesses. The name of each witness should
be printed or typed under the witness's signature.
191
AMENDMENT TO PIZZERIA UNO CORPORATION
UNIT FRANCHISE AGREEMENT FOR FULL-SERVICE RESTAURANT
FOR THE STATE OF NORTH DAKOTA
The Pizzeria Uno Corporation Franchise Agreement for Full-Service
Restaurant between _______________________ ("Franchisee") and Pizzeria Uno
Corporation ("Franchisor") dated ____________________ (the "Agreement") shall be
amended by the addition of the following language, which shall be considered an
integral part of the Agreement:
NORTH DAKOTA LAW MODIFICATIONS
1. The North Dakota Securities Commissioner requires that certain
provisions contained in franchise documents be amended to be consistent
with North Dakota law, including the North Dakota Franchise Investment Law,
North Dakota Century Code Annotated Chapter 51-19, Sections 51-19-01
through 51-19-17 (1993). To the extent that the Agreement contains
provisions that are inconsistent with the following, such provisions are
hereby amended:
a. If the Franchisee is required in the Agreement to
execute a release of claims or to acknowledge facts
that would negate or remove from judicial review any
statement, misrepresentation or action that would
violate the Law, or a rule or order under the Law, such
release shall exclude claims arising under the North
Dakota Franchise Investment Law, and such
acknowledgments shall be void with respect to claims
under the Law.
b. Covenants not to compete during the term of and upon
termination or expiration of the Agreement are
enforceable only under certain conditions according to
North Dakota law. If the Agreement contains a covenant
not to compete which is inconsistent with North Dakota
law, the covenant may be unenforceable.
c. If the Agreement requires litigation to be conducted in
a forum other than the State of North Dakota, the
requirement is void with respect to claims under the
North Dakota Franchise Investment Law.
d. If the Agreement requires that it be governed by a
state's law, other than the State of North Dakota, to
the extent that such law conflicts with the North
Dakota Franchise Investment Law, the North Dakota
Franchise Investment Law will control.
e. If the Agreement requires mediation or arbitration to
be conducted in a forum other than the State of North
Dakota, the requirement may be unenforceable under the
North Dakota Franchise Investment Law. Arbitration
involving a franchise purchased in the State of North
Dakota must be held either in a location mutually
agreed upon prior to the arbitration or if the parties
cannot agree on a location, the location will be
determined by the arbitrator.
f. If the Agreement requires payment of a termination
penalty, the requirement may be unenforceable under the
North Dakota Franchise Investment Law.
192
2. Each provision of this Amendment shall be effective only to the
extent that the jurisdictional requirements of the North Dakota Franchise
Investment Law, with respect to each such provision, are met independent of
this Amendment. This Amendment shall have no force or effect if such
jurisdictional requirements are not met.
IN WITNESS WHEREOF, the parties hereto set their hands and seals, in
duplicate, on this ______ day of __________, 199_.
PIZZERIA UNO CORPORATION
Witnesses:
____________________________ By: ________________________________
Its ____________________________
____________________________
Witnesses:
____________________________ ____________________________________
Franchisee
____________________________
____________________________ ____________________________________
Franchisee
____________________________
____________________________ ____________________________________
Franchisee
____________________________
NOTE: Each signature should have two witnesses. The name of each witness should
be printed or typed under the witness's signature.
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193
AMENDMENT TO PIZZERIA UNO CORPORATION
UNIT FRANCHISE AGREEMENT FOR FULL-SERVICE RESTAURANT
FOR THE STATE OF RHODE ISLAND
The Pizzeria Uno Corporation Unit Franchise Agreement for Full-Service
Restaurant between ______________________ ("Franchisee") and Pizzeria Uno
Corporation ("Franchisor") dated _____________________ (the "Agreement") shall
be amended by the addition of the following language, which shall be considered
an integral part of the Agreement:
RHODE ISLAND LAW MODIFICATIONS
1. The Rhode Island Securities Division requires that certain
provisions contained in franchise documents be amended to be consistent
with Rhode Island law, including the Franchise Investment Act, R.I. Gen.
Law. ch. 395 Sec. 19-28.1-1 -19-28.1-34. To the extent that this Agreement
contains provisions that are inconsistent with the following, such
provisions are hereby amended:
a. If this Agreement requires litigation to be
conducted in a forum other than the State of Rhode
Island, the requirement is void under Rhode Island
Franchise Investment Act Sec. 19-28.1-14.
b. If this Agreement requires that it be governed by
a state's law, other than the State of Rhode
Island, to the extent that such law conflicts with
Rhode Island Franchise Investment Act it is void
under Sec. 19-28.1-14.
c. If the Franchisee is required in this Agreement to
execute a release of claims or to acknowledge
facts that would negate or remove from judicial
review any statement, misrepresentation or action
that would violate the Act, or a rule or order
under the Act, such release shall exclude claims
arising under the Rhode Island Franchise
Investment Act, and such acknowledgments shall be
void with respect to claims under the Act.
2. Each provision of this Amendment shall be effective only
to the extent that the jurisdictional requirements of the Rhode Island
Franchise Investment Act, with respect to each such provision, are met
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194
independent of this Amendment. This Amendment shall have no force or effect if
such jurisdictional requirements are not met.
IN WITNESS WHEREOF, the parties hereto set their hands and seals, in
duplicate, on this _______ day of ___________, 199_.
PIZZERIA UNO CORPORATION
Witnesses:
____________________________ By: ________________________________
Its ____________________________
____________________________
Witnesses:
____________________________ ____________________________________
Franchisee
____________________________
____________________________ ____________________________________
Franchisee
____________________________
____________________________ ____________________________________
Franchisee
____________________________
NOTE: Each signature should have two witnesses. The name of each witness should
be printed or typed under the witness's signature.
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195
AMENDMENT TO PIZZERIA UNO CORPORATION
UNIT FRANCHISE AGREEMENT FOR FULL-SERVICE RESTAURANT
FOR THE STATE OF SOUTH DAKOTA
The Pizzeria Uno Corporation Unit Franchise Agreement for Full-Service
Restaurant between ________________________ ("Franchisee") and Pizzeria Uno
Corporation ("Franchisor") dated ____________________ (the "Agreement") shall be
amended by the addition of the following language, which shall be considered an
integral part of the Agreement:
SOUTH DAKOTA LAW MODIFICATIONS
1. The Director of the South Dakota Division of Securities
requires that certain provisions contained in franchise documents be
amended to be consistent with South Dakota law, including the South Dakota
Franchises for Brand-Name Goods and Services Law, South Dakota Codified
Laws, Title 37, Chapter 37-5A, Sections 37-5A-1 through 37-5A-87 (1994). To
the extent that the Agreement contains provisions that are inconsistent
with the following, such provisions are hereby amended:
a. If the Franchisee is required in the Agreement to
execute a release of claims or to acknowledge
facts that would negate or remove from judicial
review any statement, misrepresentation or action
that would violate the Law, or a rule or order
under the Law, such release shall exclude claims
arising under the South Dakota Franchises for
Brand-Name Goods and Services Law, and such
acknowledgments shall be void with respect to
claims under the Law.
b. Covenants not to compete upon termination or
expiration of the Agreement are generally
unenforceable in the state of South Dakota, except
in certain limited instances as provided by law.
If the Agreement contains a covenant not to
compete which is inconsistent with South Dakota
law, the covenant may be unenforceable.
c. Regardless of the terms of the Agreement
concerning termination, if Franchisee fails to
meet performance and quality standards or fails to
make any royalty payments under the Agreement,
Franchisee will be afforded thirty (30) days'
written notice with an opportunity to cure the
default before termination.
d. If the Agreement requires payment of liquidated
damages that are inconsistent with South Dakota
Law, the liquidated damage clauses may be void
under SDCL 53-9-5.
e. If the Agreement requires litigation to be
conducted in a forum other than the State of South
Dakota, the requirement is void with respect to
any cause of action otherwise enforceable under
South Dakota Law.
f. If the Agreement requires that it be governed by a
state's law, other than the State of South Dakota,
matters regarding franchise registration,
employment, covenants not to compete, and other
issues of local concern will be governed by the
laws of the State of South Dakota; but as to
contractual and all other matters, the Agreement
and all provisions of this Amendment will be and
remain subject to the application, construction,
enforcement, interpretation under the governing
law set forth in the Agreement.
196
g. If the Agreement requires that disputes between
Franchisor and Franchisee be mediated/arbitrated
at a location that is outside the State of South
Dakota, the mediation/arbitration will be
conducted at a location mutually agreed upon by
the parties. If the parties cannot agree on
location for the mediation/arbitration, the
location shall be determined by the
mediator/arbitrator selected.
2. Each provision of this Amendment shall be effective only to the
extent that the jurisdictional requirements of the South Dakota Franchise
Investment Law, with respect to each such provision, are met independent of
this Amendment. This Amendment shall have no force or effect if such
jurisdictional requirements are not met.
IN WITNESS WHEREOF, the parties hereto set their hands and seals, in
duplicate, on this ____ day of _________, 199_.
PIZZERIA UNO CORPORATION
Witnesses:
____________________________ By: ________________________________
Its ____________________________
____________________________
Witnesses:
____________________________ ____________________________________
Franchisee
____________________________
____________________________ ____________________________________
Franchisee
____________________________
____________________________ ____________________________________
Franchisee
____________________________
NOTE: Each signature should have two witnesses. The name of each witness should
be printed or typed under the witness's signature.
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197
AMENDMENT TO PIZZERIA UNO CORPORATION
UNIT FRANCHISE AGREEMENT FOR FULL-SERVICE RESTAURANT
FOR THE STATE OF WASHINGTON
The Pizzeria Uno Corporation Unit Franchise Agreement for Full-Service
Restaurant between ________________________ ("Franchisee") and Pizzeria Uno
Corporation ("Franchisor") dated ___________________ (the "Agreement") shall be
amended by the addition of the following language, which shall be considered an
integral part of the Agreement:
WASHINGTON LAW MODIFICATIONS
1. The Director of the Washington Department of Financial Institutions
requires that certain provisions contained in franchise documents be amended to
be consistent with Washington law, including the Washington Franchise
Investment Protection Act, WA Rev. Code Sections 19.100.010 to 19.100.940
(1991). To the extent that the Agreement contains provisions that are
inconsistent with the following, such provisions are hereby amended:
a. The Washington Franchise Investment Protection Act provides
rights to Franchisee concerning nonrenewal and termination
of the Agreement. If the Agreement contains a provision that
is inconsistent with the Act, the Act will control.
b. If the Agreement requires Franchisee to execute a release of
claims, such release shall exclude claims arising under the
Washington Franchise Investment Protection Act; except when
the release is executed under a negotiated settlement after
the Agreement is in effect and where the parties are
represented by independent counsel. If there are provisions
in the Agreement that unreasonably restrict or limit the
statute of limitations period for claims brought under the
Act, or other rights or remedies under the Act, those
provisions may be unenforceable.
c. If the Agreement requires litigation, arbitration, or
mediation to be conducted in a forum other than the State of
Washington, the requirement may be unenforceable under
Washington law. Arbitration involving a franchise purchased
in the State of Washington, must either be held in the State
of Washington or in a place mutually agreed upon at the time
of the arbitration, or as determined by the arbitrator.
d. If the Agreement requires that it be governed by a state's
law, other than the State of Washington, and there is a
conflict between the law and the Washington Franchise
Investment Protection Act, the Washington Franchise
Investment Protection Act will control.
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198
2. Each provision of this Amendment shall be effective only to the
extent that the jurisdictional requirements of the Washington law applicable to
the provision are met independent of this Amendment. This Amendment shall have
no force or effect if such jurisdictional requirements are not met.
IN WITNESS WHEREOF, the parties hereto set their hands and seals, in
duplicate, on this ____ day of ____________, 199_.
PIZZERIA UNO CORPORATION
Witnesses:
____________________________ By: ________________________________
Its ____________________________
____________________________
Witnesses:
____________________________ ____________________________________
Franchisee
____________________________
____________________________ ____________________________________
Franchisee
____________________________
____________________________ ____________________________________
Franchisee
____________________________
NOTE: Each signature should have two witnesses. The name of each witness should
be printed or typed under the witness's signature.
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199
AMENDMENT TO PIZZERIA UNO CORPORATION
UNIT FRANCHISE AGREEMENT FOR FULL-SERVICE RESTAURANT
FOR THE STATE OF WISCONSIN
The Pizzeria Uno Corporation Unit Franchise Agreement for Full-Service
Restaurant between ________________________ ("Franchisee") and Pizzeria Uno
Corporation ("Franchisor") dated __________________ (the "Agreement") shall be
amended by the addition of the following language, which shall be considered an
integral part of the Agreement:
WISCONSIN LAW MODIFICATIONS
1. The Securities Commissioner of the State of Wisconsin requires that
certain provisions contained in franchise documents be amended to be consistent
with Wisconsin Fair Dealership Law, Wisconsin Statutes, Chapter 135 ("Fair
Dealership Law"). To the extent that the Agreement contains provisions that are
inconsistent with the following, such provisions are hereby amended:
a. The Wisconsin Fair Dealership Law, among other things,
grants Franchisee the right, in most circumstances, to 90
days' prior written notice of termination or non-renewal and
60 days within which to remedy any claimed deficiencies. If
the Agreement contains a provision that is inconsistent with
these provisions of the Wisconsin Fair Dealership Law, the
provisions of the Agreement shall be superseded by the Law's
requirements and shall have no force or effect.
b. If the Agreement requires that it be governed by a state's
law, other than the State of Wisconsin, to the extent that
any provision of the Agreement conflicts with the Wisconsin
Fair Dealership Law such provision shall be superseded by
the law's requirements.
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200
2. Each provision of this Amendment shall be effective only to the
extent that the jurisdictional requirements of the Wisconsin law applicable to
the provision are met independent of this Amendment. This Amendment shall have
no force or effect if such jurisdictional requirements are not met.
IN WITNESS WHEREOF, the parties hereto set their hands and seals, in
duplicate, on this ____ day of __________, 199_.
PIZZERIA UNO CORPORATION
Witnesses:
____________________________ By: ________________________________
Its ____________________________
____________________________
Witnesses:
____________________________ ____________________________________
Franchisee
____________________________
____________________________ ____________________________________
Franchisee
____________________________
____________________________ ____________________________________
Franchisee
____________________________
NOTE: Each signature should have two witnesses. The name of each witness should
be printed or typed under the witness's signature.
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201
AMENDMENT TO PIZZERIA UNO CORPORATION
AREA DEVELOPMENT AGREEMENT FOR FULL-SERVICE RESTAURANTS
FOR THE STATE OF CALIFORNIA
The Pizzeria Uno Corporation Area Development Agreement for
Full-Service Restaurants between ______________________ ("Franchisee") and
Pizzeria Uno Corporation ("Franchisor") dated _____________________ (the
"Agreement") shall be amended by the addition of the following language, which
shall be considered an integral part of the Agreement:
CALIFORNIA LAW MODIFICATIONS
1. The California Department of Corporations requires that certain
provisions contained in franchise documents be amended to be consistent with
California law, including the California Franchise Investment Law, CAL. BUS. &
PROF. CODE Section 31000 et seq., and the California Franchise Relations Act,
CAL. BUS. & PROF. CODE Section 20000 et seq. To the extent that the Agreement
contains provisions that are inconsistent with the following, such provisions
are hereby amended:
a. If the Agreement contains a provision regarding
termination and nonrenewal that is inconsistent with
California Business and Professions Code Sections 20000
through 20043 and the Federal Bankruptcy Code, these
laws will control.
b. If the Agreement requires Franchisee to execute a
release of claims, such release shall exclude claims
arising under the California Franchise Investment Law
and the California Franchise Relations Act.
c. If the Agreement requires Franchisee to pay liquidated
damages that are inconsistent with California Civil Code
Section 1671, such law shall prevail.
d. If the Agreement contains a covenant not to compete
which extends beyond the expiration or termination of
the Agreement, the covenant may be unenforceable under
California law.
e. If the Agreement requires litigation, arbitration, or
mediation to be conducted in a forum other than the
State of California, the requirement may be
unenforceable under California law.
f. If the Agreement requires that it be governed by a
state's law, other than the State of California, such
requirement may be unenforceable.
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202
2. Each provision of this Amendment shall be effective only to the
extent that the jurisdictional requirements of the California law applicable to
the provision are met independent of this Amendment. This Amendment shall have
no force or effect if such jurisdictional requirements are not met.
IN WITNESS WHEREOF, the parties hereto set their hands and seals, in
duplicate, on this ______ day of _______________, 199__.
Witnesses: PIZZERIA UNO CORPORATION
______________________________ By:_____________________________
Its__________________________
______________________________
Witnesses:
______________________________ ________________________________
Franchisee
______________________________
______________________________ ________________________________
Franchisee
______________________________
______________________________ ________________________________
Franchisee
______________________________
NOTE: Each signature should have two witnesses. The name of each witness should
be printed or typed under the witness's signature.
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203
AMENDMENT TO PIZZERIA UNO CORPORATION
AREA DEVELOPMENT AGREEMENT FOR FULL-SERVICE RESTAURANTS
FOR THE STATE OF HAWAII
The Pizzeria Uno Corporation Area Development Agreement for
Full-Service Restaurants between ______________________ ("Franchisee") and
Pizzeria Uno Corporation ("Franchisor") dated _____________________ (the
"Agreement") shall be amended by the addition of the following language, which
shall be considered an integral part of the Agreement:
HAWAII LAW MODIFICATIONS
1. The Director of the Hawaii Department of Commerce and Consumer
Affairs requires that certain provisions contained in franchise documents
amended to be consistent with Hawaii law, including the Hawaii Franchise
Investment Law, Hawaii Revised Statutes, Title 26, Chapter 482E-1 Through
482E-12 (1988). To the extent that the Agreement contains provisions that are
inconsistent with the following, such provisions are hereby amended:
a. The Hawaii Franchise Investment Law provides rights to
Franchisee concerning nonrenewal, termination and
transfer of the Agreement. If the Agreement contains a
provision that is inconsistent with the Law, the Law
will control. Among those rights, the Law may require
that upon termination or nonrenewal Franchisor
repurchase for fair market value Franchisee's inventory,
supplies, equipment and furnishings purchased from
Franchisor or a supplier designated by Franchisor,
provided that personalized materials which have no value
to Franchisor need not be repurchased. If the
non-renewal or termination is for the purpose of
converting Franchisee's business to one owned and
operated by Franchisor, Franchisor may, additionally, be
obligated to compensate Franchisee for loss of goodwill.
Franchisor may deduct all amounts due from Franchisee
and any costs related to the transportation or
disposition of items repurchased against any payment for
those items. If the parties cannot agree on the fair
market value, fair market value shall be determined in
the manner set forth in the Agreement. If the Agreement
does not provide for determination of the fair market
value of assets for purchase by Franchisor, such amount
shall be determined by an independent appraiser approved
by both parties, and the costs of the appraisal shall be
shared equally by the parties.
b. If the Agreement requires Franchisee to execute a
release of claims, such release shall exclude claims
arising under the Hawaii Franchise Investment Law.
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204
2. Each provision of this Amendment shall be effective only to the
extent that the jurisdictional requirements of the Hawaii Franchise Law
applicable to the provision are met independent of this Amendment. This
Amendment shall have no force or effect if such jurisdictional requirements are
not met.
IN WITNESS WHEREOF, the parties hereto set their hands and seals, in
duplicate, on this ______ day of _______________, 199__.
Witnesses: PIZZERIA UNO CORPORATION
______________________________ By:_____________________________
Its__________________________
______________________________
Witnesses:
______________________________ ________________________________
Franchisee
______________________________
______________________________ ________________________________
Franchisee
______________________________
______________________________ ________________________________
Franchisee
______________________________
NOTE: Each signature should have two witnesses. The name of each witness should
be printed or typed under the witness's signature.
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205
AMENDMENT TO PIZZERIA UNO CORPORATION
AREA DEVELOPMENT AGREEMENT FOR FULL-SERVICE RESTAURANTS
FOR THE STATE OF ILLINOIS
The Pizzeria Uno Corporation Area Development Agreement for Full-Service
Restaurants between _________________________ ("Franchisee") and Pizzeria Uno
Corporation ("Franchisor") dated ________________________ (the "Agreement")
shall be amended by the addition of the following language, which shall be
considered an integral part of the Agreement:
ILLINOIS LAW MODIFICATIONS
1. The Illinois Attorney General's Office requires that certain
provisions contained in franchise documents be amended to be consistent with
Illinois law, including the Franchise Disclosure Act of 1987, Ill. Rev. Stat.
ch. 815 para. 705/1-705/44 (1994). To the extent that the Agreement contains
provisions that are inconsistent with the following, such provisions are hereby
amended:
a. Illinois Franchise Disclosure Act paragraphs 705/19 and 705/20 provide
rights to Franchise concerning nonrenewal and termination of the
Agreement. If the Agreement contains a provision that is inconsistent
with such provisions of the Act, the Act will control.
b. If the Agreement requires Franchisee to execute a release of claims or
to acknowledge facts that would negate or remove from judicial review
any statement, misrepresentation or action that would violate the Act,
or a rule or order under the Act, such release shall exclude claims
arising under the Illinois Franchise Disclosure Act, and such
acknowledgments shall be void and are hereby deleted with respect to
claims under the Act.
c. If the Agreement requires litigation to be conducted in a forum other
than the State of Illinois, the requirement shall be void with respect
to claims under the Illinois Franchise Disclosure Act.
d. If the Agreement requires that it be governed by a state's law, other
than the State of Illinois, to the extent that such law conflicts with
the Illinois Franchise Disclosure Act, the Act will control.
2. Each provision of this Amendment shall be effective only to the
extent that the jurisdictional requirements of the Illinois Franchise
Disclosure Act, with respect to each such provision, are met independent
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206
of this Amendment. This Amendment shall have no force or effect if such
jurisdictional requirements are not met.
IN WITNESS WHEREOF, the parties hereto set their hands and seals, in
duplicate, on this ______ day of _______________, 199__.
Witnesses: PIZZERIA UNO CORPORATION
______________________________ By:_____________________________
Its__________________________
______________________________
Witnesses:
______________________________ ________________________________
Franchisee
______________________________
______________________________ ________________________________
Franchisee
______________________________
______________________________ ________________________________
Franchisee
______________________________
NOTE: Each signature should have two witnesses. The name of each witness should
be printed or typed under the witness's signature.
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207
AMENDMENT TO PIZZERIA UNO CORPORATION
AREA DEVELOPMENT AGREEMENT FOR FULL-SERVICE RESTAURANTS
FOR THE STATE OF INDIANA
The Pizzeria Uno Corporation Area Development Agreement for Full-Service
Restaurants between _________________________ ("Franchisee") and Pizzeria Uno
Corporation ("Franchisor") dated ________________________ (the "Agreement")
shall be amended by the addition of the following language, which shall be
considered an integral part of the Agreement:
INDIANA LAW MODIFICATIONS
1. The Indiana Securities Commissioner requires that certain provisions
contained in franchise documents be amended to be consistent with Indiana law,
including the Indiana Franchises Act, Ind. Code Ann. Sections 1-51 (1994) and
the Indiana Deceptive Franchise Practices Act, Ind. Code Ann. Section 23-2-2.7
(1985). To the extent that the Agreement contains provisions that are
inconsistent with the following, such provisions are hereby amended:
a. If the Agreement contains a provision regarding termination and
nonrenewal that is inconsistent with these provisions of the Indiana
Deceptive Franchise Practices Act, the Act will control.
b. If the Agreement requires Franchisee to execute a release of claims or
to acknowledge facts that would negate or remove from judicial review
any statement, misrepresentation or action that would violate the Act,
or a rule or order under the Act, such release shall exclude claims
arising under the Indiana Deceptive Franchise Practices Act and the
Indiana Franchises Act, and such acknowledgments shall be void with
respect to claims under the Acts.
c. If the Agreement contains covenants not to compete upon expiration or
termination of the Agreement that are inconsistent with the Indiana
Deceptive Franchise Practices Act, the requirements of the Act will
control.
d. The Indiana Deceptive Franchise Practices Act provides that
substantial modification of the Agreement by Franchisor requires
written consent of Franchisee. If the Agreement contains provisions
that are inconsistent with this requirement, the Act will control.
e. If the Agreement requires litigation to be conducted in a forum other
than the State of Indiana, the requirement may be unenforceable as a
limitation on litigation under the Indiana Deceptive Franchise
Practices Act Section 23-2-2.7(10).
f. If the Agreement requires that it be governed by a state's law, other
than the State of Indiana, to the extent that such law conflicts with
the Indiana Deceptive Franchise Practices Act and the Indiana
Franchises Act, the Act will control.
2. Each provision of this Amendment shall be effective only to the
extent that the jurisdictional requirements of the Indiana Deceptive Franchise
Practices Act and the Indiana Franchises Act, with respect
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208
to each such provision, are met independent of this Amendment. This Amendment
shall have no force or effect if such jurisdictional requirements are not met.
IN WITNESS WHEREOF, the parties hereto set their hands and seals, in
duplicate, on this ______ day of _______________, 199__.
Witnesses: PIZZERIA UNO CORPORATION
______________________________ By:_____________________________
Its__________________________
______________________________
Witnesses:
______________________________ ________________________________
Franchisee
______________________________
______________________________ ________________________________
Franchisee
______________________________
______________________________ ________________________________
Franchisee
______________________________
NOTE: Each signature should have two witnesses. The name of each witness should
be printed or typed under the witness's signature.
-2-
209
AMENDMENT TO PIZZERIA UNO CORPORATION
AREA DEVELOPMENT AGREEMENT FOR FULL-SERVICE RESTAURANTS
FOR THE STATE OF MARYLAND
The Pizzeria Uno Corporation Area Development Agreement for
Full-Service Restaurants between _______________________("Franchisee") and
Pizzeria Uno Corporation ("Franchisor") dated _________________ (the
"Agreement") shall be amended by the addition of the following language, which
shall be considered an integral part of the Agreement:
MARYLAND LAW MODIFICATIONS
1. The Maryland Securities Division requires that certain
provisions contained in franchise documents be amended to be consistent
with Maryland law, including the Maryland Franchise Registration and
Disclosure Law, Md. Code Ann., Bus. Reg. Sections 14-201 - 14-233
(1994). To the extent that this Agreement contains provisions that are
inconsistent with the following, such provisions are hereby amended:
a. If the Agreement requires Franchisee to execute a
release of claims or to acknowledge facts that
would negate or remove from judicial review any
statement, misrepresentation or action that would
violate the Law, or a rule or order under the Law,
such release shall exclude claims arising under
the Maryland Franchise Registration and Disclosure
Law, and such acknowledgements shall be void with
respect to claims under the Law.
b. If the Agreement requires litigation to be
conducted in a forum other than the State of
Maryland, the requirement shall not be interpreted
to limit any rights Franchisee may have under
Sec. 14-216(c)(25) of the Maryland Franchise
Registration and Disclosure Law to bring suit in
the state of Maryland.
2. Each Provision of this Amendment shall be effective only to the
extent that the jurisdictional requirements of the Maryland Franchise
Registration and Disclosure Law, with respect to each such provision,
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210
are met independent of this Amendment. This Amendment shall have no force or
effect if such jurisdictional requirements are not met.
IN WITNESS WHEREOF, the parties hereto set their hands and seals, in
duplicate, on this ______ day of _______________, 199__.
Witnesses: PIZZERIA UNO CORPORATION
______________________________ By:_____________________________
Its__________________________
______________________________
Witnesses:
______________________________ ________________________________
Franchisee
______________________________
______________________________ ________________________________
Franchisee
______________________________
______________________________ ________________________________
Franchisee
______________________________
NOTE: Each signature should have two witnesses. The name of each witness should
be printed or typed under the witness's signature.
211
AMENDMENT TO PIZZERIA UNO CORPORATION
AREA DEVELOPMENT AGREEMENT FOR FULL-SERVICE RESTAURANTS
AND OFFERING CIRCULAR
FOR THE STATE OF MINNESOTA
The Pizzeria Uno Corporation Area Development Agreement for
Full-Service Restaurants between _______________________("Franchisee") and
Pizzeria Uno Corporation ("Franchisor") dated _________________ (the
"Agreement") shall be amended by the addition of the following language, which
shall be considered an integral part of the Agreement:
MINNESOTA LAW MODIFICATIONS
1. The Commissioner of Commerce for the State of Minnesota requires
that certain provisions contained in franchise documents be amended to be
consistent with Minnesota Franchise Act, Minn. Stat. Section 80.01 et seq., and
of the Rules and Regulations promulgated under the Act (collectively the
"Franchise Act"). To the extent that the Agreement and Offering Circular
contain provisions that are inconsistent with the following, such provisions
are hereby amended:
a. The Minnesota Department of Commerce requires that
Franchisor indemnify Minnesota franchisees against
liability to third parties resulting from claims that the
Franchisees' use of the Intellectual Properties infringes
trademark rights of the third party. If the Agreement
contains a provision that is inconsistent with the
Franchise Act, the provisions of the Agreement shall be
superseded by the Act's requirements and shall have no
force or effect.
b. Franchise Act, Sec. 80C.14, Subd. 4., requires, except in
certain specified cases, that a franchisee be given
written notice of a franchisor's intention not to renew
180 days prior to expiration of the franchise and that the
franchisee be given sufficient opportunity to operate the
franchise in order to enable the franchisee the
opportunity to recover the fair market value of the
franchise as a going concern. If the Agreement contains a
provision that is inconsistent with such requirement of
the Franchise Act, the provisions of the Agreement shall
be superseded by the Act's requirements and shall have no
force or effect.
c. Franchise Act, Sec. 80C.14, Subd. 3., requires, except in
certain specified cases that a franchisee be given 90 days
notice of termination (with 60 days to cure). If the
Agreement contains a provision that is inconsistent with
such requirement of the Franchise Act, the provisions of
the Agreement shall be superseded by the Act's
requirements and shall have no force or effect.
d. If the Agreement requires Franchisee to execute a release
of claims or to acknowledge the facts that would negate or
remove from judicial review any statement,
misrepresentation or action that would violate the
Franchise Act, such release shall exclude claims arising
under the Franchise Act, and such acknowledgements shall
be void with respect to claims under the Act.
c. If the Agreement requires that it be governed by a state's
law, other than the State of Minnesota or arbitration or
mediation, those provisions shall not in any way abrogate
or reduce any rights of the Franchisee as provided for in
the Franchise Act, including the right to submit matters
to the jurisdiction of the courts of Minnesota.
212
2. Each provision of this Amendment shall be effective only to the
extent that the jurisdictional requirements of the Minnesota law applicable to
the provision are met independent of this Amendment. This Amendment shall have
no force or effect if such jurisdictional requirements are not met.
IN WITNESS WHEREOF, the parties hereto set their hands and seals, in
duplicate, on this ______ day of _______________, 199__.
Witnesses: PIZZERIA UNO CORPORATION
______________________________ By:_____________________________
Its__________________________
______________________________
Witnesses:
______________________________ ________________________________
Franchisee
______________________________
______________________________ ________________________________
Franchisee
______________________________
______________________________ ________________________________
Franchisee
______________________________
NOTE: Each signature should have two witnesses. The name of each witness should
be printed or typed under the witness's signature.
-2-
213
AMENDMENT TO PIZZERIA UNO CORPORATION
AREA DEVELOPMENT AGREEMENT FOR FULL-SERVICE RESTAURANTS
FOR THE STATE OF NORTH DAKOTA
The Pizzeria Uno Corporation Area Development Agreement for
Full-Service Restaurant between _______________________("Franchisee") and
Pizzeria Uno Corporation ("Franchise") dated ____________(the "Agreement")
shall be amended by the addition of the following language, which shall be
considered an integral part of the Agreement:
NORTH DAKOTA LAW MODIFICATIONS
1. The North Dakota Securities Commissioner requires that
certain provisions contained in franchise documents be amended to be
consistent with North Dakota law, including the North Dakota Franchise
Investment Law, North Dakota Century Code Annotated Chapter 51-19,
Sections 51-19-01 through 51-19-17 (1993). To the extent that the
Agreement contains provisions that are inconsistent with the following,
such provisions are hereby amended:
a. If the Franchisee is required in the Agreement to
execute a release of claims or to acknowledge facts that
would negate or remove from judicial review any
statement, misrepresentation or action that would
violate the Law, or a rule or order under the Law, such
release shall exclude claims arising under the North
Dakota Franchise Investment Law, and such
acknowledgments shall be void with respect to claims
under the Law.
b. Covenants not to compete during the term of and upon
termination or expiration of the Agreement are
enforceable only under certain conditions according to
North Dakota Law. If the Agreement contains a covenant
not to compete which is inconsistent with North Dakota
law, the covenant may be unenforceable.
c. If the Agreement requires litigation to be conducted in
a forum other than the State of North Dakota, the
requirement is void with respect to claims under the
North Dakota Franchise Investment Law.
d. If the Agreement requires that it be governed by a
state's law, other than the State of North Dakota, to
the extent that such law conflicts with the North Dakota
Franchise Investment Law, the North Dakota Franchise
Investment Law will control.
e. If the Agreement requires mediation or arbitration to be
conducted in a forum other than the State of North
Dakota, the requirement may be unenforceable under the
North Dakota Franchise Investment Law. Arbitration
involving a franchise purchased in the State of North
Dakota must be held either in a location mutually agreed
upon prior to the arbitration or if the parties cannot
agree on a location, the location will be determined by
the arbitrator.
f. If the Agreement requires payment of a termination
penalty, the requirement may be unenforceable under the
North Dakota Franchise Investment Law.
214
2. Each provision of this Amendment shall be effective only to the
extent that the jurisdictional requirements of the North Dakota Franchise
Investment Law, with respect to each such provision, are met independent of
this Amendment. This Amendment shall have no force or effect if such
jurisdictional requirements are not met.
IN WITNESS WHEREOF, the parties hereto set their hands and seals, in
duplicate, on this ______ day of _______________, 199__.
Witnesses: PIZZERIA UNO CORPORATION
______________________________ By:_____________________________
Its__________________________
______________________________
Witnesses:
______________________________ ________________________________
Franchisee
______________________________
______________________________ ________________________________
Franchisee
______________________________
______________________________ ________________________________
Franchisee
______________________________
NOTE: Each signature should have two witnesses. The name of each witness should
be printed or typed under the witness's signature.
-2-
215
AMENDMENT TO PIZZERIA UNO CORPORATION
AREA DEVELOPMENT AGREEMENT FOR FULL-SERVICE RESTAURANTS
FOR THE STATE OF NEW YORK
The Pizzeria Uno Corporation Area Development Agreement for
Full-Service Restaurants between __________________ ("Franchisee") and Pizzeria
Uno Corporation ("Franchisor") dated ______________ (the "Agreement") shall be
amended by the addition of the following language, which shall be considered an
integral part of the Agreement:
NEW YORK LAW MODIFICATIONS
1. The New York Department of Law requires that certain
provisions contained in franchise documents be amended to be consistent
with New York law, including the General Business Law, Article 33,
Sections 680 through 695 (1989). To the extent that the Agreement
contains provisions that are inconsistent with the following, such
provisions are hereby amended:
a. If the Agreement requires Franchisee to execute a
release of claims or to acknowledge facts that would
negate or remove from judicial review any statement,
misrepresentation or action that would violate the
General Business Law, or any regulation, rule or order
under the Law, such release shall exclude claims arising
under the New York General Business Law, Article 33,
Section 680 through 695 and the regulations promulgated
thereunder, and such acknowledgments shall be void. It
is the intent of this provision that non-waiver
provisions of Sections 687.4 and 687.5 of the General
Business Law be satisfied.
b. If the Agreement requires that it be governed by a
state's law, other than the State of New York, the
choice of law provision shall not be considered to
waive any rights conferred upon the Franchisee under the
New York General Business Law, Article 33, Sections 680
through 695.
2. Each provision of this Amendment shall be effective only
to the extent that the jurisdictional requirements of the New York
General Business Law, with respect to each such provision, are met
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216
independent of this Amendment. This Amendment shall have no force or effect if
such jurisdictional requirements are not met.
IN WITNESS WHEREOF, the parties hereto set their hands and seals, in
duplicate, on this ______ day of _______________, 199__.
Witnesses: PIZZERIA UNO CORPORATION
______________________________ By:_____________________________
Its__________________________
______________________________
Witnesses:
______________________________ ________________________________
Franchisee
______________________________
______________________________ ________________________________
Franchisee
______________________________
______________________________ ________________________________
Franchisee
______________________________
NOTE: Each signature should have two witnesses. The name of each witness should
be printed or typed under the witness's signature.
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217
AMENDMENT TO PIZZERIA UNO CORPORATION
AREA DEVELOPMENT AGREEMENT FOR FULL-SERVICE RESTAURANTS
FOR THE STATE OF RHODE ISLAND
The Pizzeria Uno Corporation Area Development Agreement for Full-Service
Restaurants between _________________________ ("Franchisee") and Pizzeria Uno
Corporation ("Franchisor") dated ________________________ (the "Agreement")
shall be amended by the addition of the following language, which shall be
considered an integral part of the Agreement:
RHODE ISLAND LAW MODIFICATIONS
1. The Rhode Island Securities Division requires that certain provisions
contained in franchise documents be amended to be consistent with Rhode Island
law, including the Franchise Investment Act, R.I. Gen. Law. ch. 395 Sec.
19-28.1-1 -19-28.1-34. To the extent that this Agreement contains provisions
that are inconsistent with the following, such provisions are hereby amended:
a. If this Agreement requires litigation to be conducted in a forum other
than the State of Rhode Island, the requirement is void under Rhode
Island Franchise Investment Act Sec. 19-28.1-14.
b. If this Agreement requires that it be governed by a state's law, other
than the State of Rhode Island, to the extent that such law conflicts
with Rhode Island Franchise Investment Act it is void under Sec.
19-28.1-14.
c. If the Franchisee is required in this Agreement to execute a release
of claims or to acknowledge facts that would negate or remove from
judicial review any statement, misrepresentation or action that would
violate the Act, or a rule or order under the Act, such release shall
exclude claims arising under the Rhode Island Franchise Investment
Act, and such acknowledgements shall be void with respect to claims
under the Act.
2. Each provision of this Amendment shall be effective only to the
extent that the jurisdictional requirements of the Rhode Island Franchise
Investment Act, with respect to each such provision, are met
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218
independent of this Amendment. This Amendment shall have no force or effect if
such jurisdictional requirements are not met.
IN WITNESS WHEREOF, the parties hereto set their hands and seals, in
duplicate, on this ______ day of _______________, 199__.
Witnesses: PIZZERIA UNO CORPORATION
______________________________ By:_____________________________
Its__________________________
______________________________
Witnesses:
______________________________ ________________________________
Franchisee
______________________________
______________________________ ________________________________
Franchisee
______________________________
______________________________ ________________________________
Franchisee
______________________________
NOTE: Each signature should have two witnesses. The name of each witness should
be printed or typed under the witness's signature.
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219
AMENDMENT TO PIZZERIA UNO CORPORATION
AREA DEVELOPMENT AGREEMENT FOR FULL-SERVICE RESTAURANTS
FOR THE STATE OF SOUTH DAKOTA
The Pizzeria Uno Corporation Area Development Agreement for
Full-Service Restaurants between _______________________("Franchisee") and
Pizzeria Uno Corporation ("Franchisor") dated _________________ (the
"Agreement") shall be amended by the addition of the following language, which
shall be considered an integral part of the Agreement:
SOUTH DAKOTA LAW MODIFICATIONS
1. The Director of the South Dakota Division of Securities
requires that certain provisions contained in franchise documents be amended to
be consistent with South Dakota law, including the South Dakota Franchises for
Brand-Name Goods and Services Law, South Dakota Codified Laws, Title 37,
chapter 37-5A, Sections 37-5A-1 through 37-5A-87 (1994). To the extent that the
Agreement contains provisions that are inconsistent with the following, such
provisions are hereby amended:
a. If the Franchisee is required in the Agreement to execute a
release of claims or to acknowledge facts that would
negate or remove from judicial review any statement,
misrepresentation or action that would violate the Law, or
a rule or order under the Law, such release shall exclude
claims arising under the South Dakota Franchises for
Brand-Name Goods and Services Law, and such acknowledgments
shall be void with respect to claims under the Law.
b. Covenants not to compete upon termination or expiration of
the Agreement are generally unenforceable in the state of
South Dakota, except in certain limited instances as
provided by law. If the Agreement contains a covenant not to
compete which is inconsistent with South Dakota law, the
covenant may be unenforceable.
c. Regardless of the terms of the Agreement concerning
termination, if Franchisee fails to meet performance and
quality standards or fails to make any royalty payments
under the Agreement, Franchisee will be afforded thirty (30)
days' written notice with an opportunity to cure the default
before termination.
d. If the Agreement requires payment of liquidated damages that
are inconsistent with South Dakota Law, the liquidated
damage clauses may be void under SDCL 53-9-5.
e. If the Agreement requires litigation to be conducted in a
forum other than the State of South Dakota, the requirement
is void with respect to any cause of action otherwise
enforceable under South Dakota Law.
f. If the Agreement requires that it be governed by a state's
law, other than the State of South Dakota, matters regarding
franchise registration, employment, covenants not to
compete, and other issues of local concern will be governed
by the laws of the State of South Dakota; but as to
contractual and all other matters, the Agreement and all
provisions of this Amendment will be and remain subject to
the application, construction, enforcement, interpretation
under the governing law set forth in the Agreement.
220
g. If the Agreement requires that disputes between
Franchisor and Franchisee be mediated/arbitrated at a
location that is outside the Sate of South Dakota, the
mediation/arbitration will be conducted at a location
mutually agreed upon by the parties. If the parties
cannot agree on location for the mediation/arbitration,
the location shall be determined by the
mediator/arbitrator selected.
2. Each provision of this Amendment shall be effective only to the
extent that the jurisdictional requirements of the South Dakota Franchise
Investment Law, with respect to each such provision, are met independent of
this Amendment. This Amendment shall have no force or effect if such
jurisdictional requirements are not met.
IN WITNESS WHEREOF, the parties hereto set their hands and seals, in
duplicate, on this ______ day of _______________, 199__.
Witnesses: PIZZERIA UNO CORPORATION
______________________________ By:_____________________________
Its__________________________
______________________________
Witnesses:
______________________________ ________________________________
Franchisee
______________________________
______________________________ ________________________________
Franchisee
______________________________
______________________________ ________________________________
Franchisee
______________________________
NOTE: Each signature should have two witnesses. The name of each witness should
be printed or typed under the witness's signature.
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221
AMENDMENT TO PIZZERIA UNO CORPORATION
AREA DEVELOPMENT AGREEMENT FOR FULL-SERVICE RESTAURANTS
FOR THE STATE OF WASHINGTON
The Pizzeria Uno Corporation Area Development Agreement for
Full-Service Restaurants between ______________________ ("Franchisee") and
Pizzeria Uno Corporation ("Franchisor") dated _____________________ (the
"Agreement") shall be amended by the addition of the following language, which
shall be considered an integral part of the Agreement:
WASHINGTON LAW MODIFICATIONS
1. The Director of the Washington Department of Financial
Institutions requires that certain provisions contained in franchise documents
be amended to be consistent with Washington law, including the Washington
Franchise Investment Protection Act, WA Rev. Code Sections 19.100.010 to
19.100.940 (1991). To the extent that the Agreement contains provisions that are
inconsistent with the following, such provisions are hereby amended:
a. The Washington Franchise Investment Protection Act
provides rights to Franchisee concerning nonrenewal and
termination of the Agreement. If the Agreement contains
a provision that is inconsistent with the Act, the Act
will control.
b. If the Agreement requires Franchisee to execute a
release of claims, such release shall exclude claims
arising under the Washington Franchisee Investment
Protection Act; except when the release is executed
under a negotiated settlement after the Agreement is in
effect and where the parties are represented by
independent counsel. If there are provisions in the
Agreement that unreasonably restrict or limit the
statute of limitations period for claims brought under
the Act, or other rights or remedies under the Act,
those provisions may be unenforceable.
c. If the Agreement requires litigation, arbitration, or
mediation to be conducted in a forum other than the
State of Washington, the requirement may be
unenforceable under Washington law. Arbitration
involving a franchise purchased in the State of
Washington, must either be held in the State of
Washington or in a place mutually agreed upon at the
time of the arbitration, or as determined by the
arbitrator.
d. If the Agreement requires that it be governed by a
state's law, other than the State of Washington, and
there is a conflict between the law and the Washington
Franchise Investment Protection Act, the Washington
Franchise Investment Protection Act will control.
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222
2. Each provision of this Amendment shall be effective only to the
extent that the jurisdictional requirements of the Washington law applicable to
the provision are met independent of this Amendment. This Amendment shall have
no force or effect if such jurisdictional requirements are not met.
IN WITNESS WHEREOF, the parties hereto set their hands and seals, in
duplicate, on this ______ day of _______________, 199__.
Witnesses: PIZZERIA UNO CORPORATION
______________________________ By:_____________________________
Its__________________________
______________________________
Witnesses:
______________________________ ________________________________
Franchisee
______________________________
______________________________ ________________________________
Franchisee
______________________________
______________________________ ________________________________
Franchisee
______________________________
NOTE: Each signature should have two witnesses. The name of each witness should
be printed or typed under the witness's signature.
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223
AMENDMENT TO PIZZERIA UNO CORPORATION
AREA DEVELOPMENT AGREEMENT FOR FULL-SERVICE RESTAURANTS
FOR THE STATE OF WISCONSIN
The Pizzeria Uno Corporation Area Development Agreement for Full-Service
Restaurants between _________________________ ("Franchisee") and Pizzeria Uno
Corporation ("Franchisor") dated ________________________ (the "Agreement")
shall be amended by the addition of the following language, which shall be
considered an integral part of the Agreement:
WISCONSIN LAW MODIFICATIONS
1. The Securities Commissioner of the State of Wisconsin requires that
certain provisions contained in franchise documents be amended to be consistent
with Wisconsin Fair Dealership Law, Wisconsin Statutes, Chapter 135 ("Fair
Dealership Law"). To the extent that the Agreement contains provisions that are
inconsistent with the following, such provisions are hereby amended:
a. The Wisconsin Fair Dealership Law, among other things, grants
Franchisee the right, in most circumstances, to 90 days' prior written
notice or termination or non-renewal and 60 days within which to
remedy any claimed deficiencies. If the Agreement contains a provision
that is inconsistent with these provisions of the Wisconsin Fair
Dealership Law, the provisions of the Agreement shall be superseded by
the Law's requirements and shall have no force or effect.
b. If the Agreement requires that it be governed by a state's law, other
than the State of Wisconsin, to the extent that any provision of the
Agreement conflicts with the Wisconsin Fair Dealership Law such
provision shall be superseded by the law's requirements.
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224
2. Each provision of this Amendment shall be effective only to the
extent that the jurisdictional requirements of the Wisconsin law applicable to
the provision are met independent of this Amendment. This Amendment shall have
no force or effect if such jurisdictional requirements are not met.
IN WITNESS WHEREOF, the parties hereto set their hands and seals, in
duplicate, on this ______ day of _______________, 199__.
Witnesses: PIZZERIA UNO CORPORATION
______________________________ By:_____________________________
Its__________________________
______________________________
Witnesses:
______________________________ ________________________________
Franchisee
______________________________
______________________________ ________________________________
Franchisee
______________________________
______________________________ ________________________________
Franchisee
______________________________
NOTE: Each signature should have two witnesses. The name of each witness should
be printed or typed under the witness's signature.
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225
[STEPHENS DIVERSIFIED LEASING, INC.]
, 1995
Mr. John Doe
dba _________________________
1111 Street
Any Town, USA 00000
Dear Mr. Doe:
Stephens Diversified Leasing, Inc. dba Stephens Franchise Finance ("SFF") is
pleased to inform you that SFF is willing to finance your Pizzeria Uno location
in Anytown, USA up to a total amount of $_______________.
In addition to permanent financing, SFF offers an interim financing option, the
terms and conditions of which are set forth in this letter. This commitment is
subject to the terms and conditions set forth in this letter.
COMMITMENT DEPOSIT: Borrower agrees to pay a deposit equal to 1% of the
loan request. This deposit becomes the property of SFF and is
non-refundable if the transaction is approved and not funded by SFF. At
the time the permanent loan is funded, the commitment deposit will be
applied to the advance payments due.
(a) INTERIM FINANCING
BORROWER: Mr. John Doe
1111 Street
Anytown, USA 00000
AMOUNT: $________________
INTEREST RATE: The rate is the prime rate as quoted in The Wall Street
Journal plus three hundred basis points. The rate is currently _____%.
The rate may be adjusted during the term of the loan to reflect changes
in the prime rate.
INTEREST PAYMENT DATE: At maturity.
MATURITY DATE: One hundred eighty (180) days from the date of executing
the commitment letter or thirty (30) days after opening of the
_______________, whichever occurs first. At that time, the interim
funding may be converted to a permanent loan.
Post Office Box 2299 Little Rock, AR 72203 501-374-6036
226
Mr. John Doe
__________________, 1995
Page 2
(b) PERMANENT FINANCING
BORROWER: Mr. John Doe
1111 Street
Anytown, USA 00000
LOAN AMOUNT: $_________________
TERM: ______ Months
REPAYMENT: For the term of the loan the monthly payment shall be
determined by multiplying the amount financed times the rate factor
provided. For the loan the rate factor is ___________ with a payment of
$_________ per month. This payment amount is subject to change depending
on the final loan amount. The initial payment and the last payment will
be due at closing. Subsequent payments will be due monthly beginning 30
days from closing. This rate is subject to change if the loan is not
consummated within the next 120 days.
Both Interim Financing and Permanent Financing are subject to all of the
conditions found throughout the remainder of this commitment letter.
COLLATERAL:
This loan will be secured by a first priority security interest in all
accounts receivable, contract rights, inventory, machinery, equipment,
furniture, fixtures, and general intangibles owned currently or
hereafter acquired, including all replacements, substitutions and
proceeds thereof, by the borrower and any other proprietorship,
partnership, or corporation which may have ownership rights in the
business described above.
GUARANTORS: The loan will be unconditionally and fully guaranteed by
______________, ________________, ________________, and their spouse(s),
whose obligations to SFF will be joint and several with the Borrower and
the other guarantors and shall be on written terms which are acceptable
to SFF.
ADVANCE PAYMENTS ______________
CONDITIONS TO FIRST ADVANCE: Prior to SFF making the first advance
to the Borrower, the following conditions precedent shall have been
fully satisfied:
1. SSF shall have received, duly executed, all promissory notes,
loan agreements, security agreements, financing
227
Mr. John Doe
, 1995
- ---------------
Page 3
statements, assignments, guaranties, corporate or partnership
resolutions, and other documents and instruments determined by SFF
necessary or advisable in connection with the transactions contemplated
by this letter, all of which shall be in form and substance satisfactory
to SFF.
2. With respect to the collateral referred to above, SFF shall have
received (i) property and casualty insurance policies providing "all
risk" physical damage or loss coverage in the amount of $
and providing liability coverage for at least $100,000/$300,000 bodily
injury and $ property damage and naming SFF as loss-payee and/
or additional insured, and (ii) evidence satisfactory to SFF as to the
validity, enforceability and priority of SFF's security interest
therein, subject only to prior liens, if any, expressly permitted in
this commitment.
3. SFF shall have received duly perfected assignment of the Borrower's
rights under the Standard Franchise Agreement between Pizzeria Uno, and
Mr. John Doe, to which Pizzeria Uno must consent. This assignment of
franchise rights shall cover the location outlined in this commitment.
4. SFF shall have received confirmation of approval by Pizzeria Uno and
payment in full of the franchise fees for the location described in this
commitment.
5. SFF shall have received duly perfected assignment of the lease of the
premises at the location described in this letter, which must be
acceptable to SFF and which must be in the borrower's name.
6. SFF shall have received a landlord waiver allowing SFF access to the
furniture, fixtures, and equipment located on the premises and the
landlord's consent to the assignment of the lease of the premises.
7. Request signed for payments with original invoices. If you have already
paid the invoice, we may reimburse you. However, we must have a copy
of cancelled check or receipt which shows that you paid the invoice.
Also, we can not reimburse you for something that you have charged.
228
Mr. John Doe
____________________, 1995
Page 4
REPORTING REQUIREMENTS: So long as the Borrower shall be indebted
to SFF,
1. The Borrower will deliver to SFF monthly, quarterly, and annual
financial statements presented in conformity with generally accepted
accounting principles, beginning at the time of the acceptance of
this commitment and continuing through the term of the loan.
2. Each of the guarantors shall submit financial statements to SFF on
an annual basis or at any other time so requested by SFF.
WARRANTIES AND REPRESENTATIONS: By accepting this commitment the
Borrower and its guarantors represent and warrant to SFF that the
financial data previously submitted to SFF is and the financial data to
be submitted to SFF will be true and accurate in all material respects
and accurately reflect the Borrowers and its guarantors' financial
condition and that there have been no material changes in the financial
condition of the parties as of the date of the acceptance of this
commitment.
The Borrower warrants and represents that all necessary licenses and
permits required by the city, county and state will be current.
The Borrower is a [(a) Proprietorship, (b) Partnership, (c)
Corporation], duly organized, validly existing and in good standing
under the laws of the State of __________________ and is authorized to
transact business in all necessary jurisdictions.
OTHER AFFIRMATIVE COVENANTS: Borrower shall, so long as any funds remain
outstanding or its indebtedness to SFF remains unpaid;
1. Pay all taxes when due.
2. Authorize SFF to discuss the Borrower business with the franchisor
as may be deemed necessary by SFF at its sole discretion.
3. From time to time provide SFF with such other information as SFF
may reasonably request.
4. The Borrower and its guarantors agree to give SFF immediate notice
of any change in their financial condition occurring prior to
closing and funding.
229
Mr. John Doe
_________________________ , 1995
Page 5
5. Will not operate in violation of any city, county, state, or
federal laws.
OTHER COVENANTS: Borrower shall not, so long as any indebtedness to
SFF remains unpaid, without the prior written consent of SFF;
1. Incur any indebtedness other than that indebtedness in existence
as of the date of this commitment that has been disclosed to SFF;
except accounts payable and trade payables incurred in the
ordinary course of business; or any indebtedness expressly
consented to by SFF in writing, if the result will be to cause a
violation of any covenants.
2. Withdraw any funds from the business in the form of compensation,
dividends, bonuses, etc., if the result will be to cause a
violation of any covenants.
3. Make any loans to any officer, stockholder or employee of the
Borrower and/or their relatives, if the result will be to
cause a violation of any covenants.
4. Make or permit any changes in the ownership of the Borrower or
any of the stores existing as of the date of this commitment
letter or contemplated by this commitment letter if such change
will be to cause a diminution of the percentage of ownership
control by Mr. John Doe or any of the partnerships or
corporations they own or are a party to, except as expressly
approved by SFF.
DEFAULT: This commitment will terminate and any amounts outstanding
under any loan contemplated hereby shall become due and payable in
the event of the occurrence of;
1. Failure to make any payment due under any loan on or before its
due date.
2. Any default under any of the notes, security documents,
instruments, agreements and other documents executed by Borrower
or others in connection with the transactions contemplated by
this commitment.
3. Failure to comply with or a breach or failure of any
representation, warranty, covenant or other provision of this
commitment letter (both before and after funding).
4. Should there be, in the opinion of SFF, a material change in the
financial condition of the Borrower of any of the guarantors to
the extent that repayment of loans might
230
Mr. John Doe
_____________________, 1995
Page 6
be adversely affected.
CLOSING COSTS AND EXPENSES: This transaction shall be without cost to
SFF. All expenses including, but not limited to, expenses for
appraisals, attorneys fees, recording costs, title searches, and title
insurance premiums shall be paid by the Borrower.
GOVERNING LAW: This transaction shall be governed by the laws of the
state of Nevada.
DEADLINE FOR ACCEPTANCE OF COMMITMENT: Month, Day, Year (30 days from
date of issue)
EXPIRATION OF COMMITMENT: Month, Day, Year (6 months from date of
issue). In the event the loan is not completed within the six month
commitment period and you wish to extend the commitment for an
additional six month period, you will be required to submit an updated
financial package and an extension fee equal to one-half percent (1/2%)
of the loan request. This one-half percent fee will at all times remain
the sole property of SFF.
Gentlemen, if the terms and conditions herein set forth are satisfactory,
please so indicate by signing in the space provided below and return this
letter to:
Stephens Diversified Leasing, Inc.
dba Stephens Franchise Finance
Mr. D. G. Simonton
P.O. Box 11280
Reno, NV 89510-1280
Subject to the deadline set forth above, this commitment shall be considered
accepted upon receipt of this letter signed by the Borrower and the commitment
deposit specified above by SFF at its office in Reno, Nevada.
Best regards,
D.G. Simonton
Vice President
The undersigned hereby accepts and approves the foregoing commitment and has
already submitted a check in the amount of $_______________ for the commitment
deposit.
231
Mr. John Doe
___________________________, 1995
Page 7
Borrower's Name
By: ___________________________________________________________________
Title: ________________________________________________________________
Date: _________________________________________________________________
Guarantor's Name
By: ___________________________________________________________________
Title: ________________________________________________________________
Date: _________________________________________________________________
232
GUARANTY
Stephens Diversified Leasing, Inc.
dba Stephens Franchise Finance
1475 Terminal Way, C-2
Reno, NV 89502
Gentlemen:
In consideration of any loans, advances or financial accommodations previously
now or hereafter granted by you to or for the account of NAME OF BORROWER
("Borrower"), under any agreement or agreement between yourselves and Borrower
heretofore, now or hereafter executed (collectively the "Agreement") or
otherwise, each of the undersigned (collectively the "Guarantors" and
individually a "Guarantor") guarantees (a) the prompt payment to you of all
sums which may in any manner whatsoever by presently due and owing and of all
sums which shall in the future in any manner whatsoever become due and owing to
you from Borrower under the Agreement or otherwise; and (b) the due performance
by Borrower of all its obligations under the agreement and under all other
present and future agreements with you.
Each Guarantor also agrees: to indemnify you and hold you harmless from and
against all obligations, demands and liabilities by whomsoever asserted and
against all losses, in any way suffered, incurred or paid by you as a result or
in any way arising out of, following or consequential to transactions with
Borrower, whether under the Agreement or otherwise, that this Guaranty shall not
be impaired by any modification, supplement, extension nor by any modification,
release or other alteration of any of the obligations hereby guaranteed or of
any security therefore, nor by any agreement or arrangement whatever with the
Borrower or anyone else; that each Guarantor shall be liable to you for all
attorneys fees and costs incurred by you by reason of this Guaranty or in
connection with enforcing any rights granted you hereunder; that the liability
of each Guarantor is direct and unconditional and may be enforced without
requiring you first to resort to any other right, remedy or security; that you
need not exhaust your rights or recourse against Borrower or any other person or
any security you may have at any time before exercising your rights under this
Guaranty against any Guarantor; that no Guarantor shall have any right of
recourse to security for the debts and obligations of the Borrower to you,
unless and until all of said debts and obligations have been paid in full; that
if there is more than one Guarantor and the liability of the Guarantors shall be
joint and several; that if Borrower or any Guarantor shall at any time become
insolvent or make a general assignment or if a petition in bankruptcy or any
insolvency or reorganization proceeding shall be filed or commenced by, against
or in respect of Borrower or any Guarantor, any and all obligations of each
Guarantor shall, at your option, become immediately due and payable without
notice; that your changes and records showing the accounts between you and
Borrower shall be admissible in any action or proceeding, shall be binding upon
each Guarantor for the purpose of establishing the items therein set forth and
shall constitute prima facie proof thereof; that this Guaranty, is, as to each
Guarantor, a continuing Guaranty; that the death of any Guarantor shall not
affect the termination of this Guaranty as to such deceased or as to any other
Guarantor; that termination of the obligations of any Guarantor shall not affect
the continuing liability hereunder of any other of the Guarantors; that nothing
shall discharge or satisfy the liability of any Guarantor hereunder except the
full payment and performance of all Borrower's debts and obligations to you;
that any and all present and future debts and obligations of the Borrower to
each Guarantor are hereby waived and postponed in favor of and subordinated to
the full payment
233
and performance of all present and future debts and obligations of Borrower to
you; and that all sums at any time to the credit of each Guarantor and any of
the property of each Guarantor any time in your possession may be held by you as
security for any and all obligations of such Guarantor to you and to pay any of
your affiliated entities, no matter how or when arising, whether absolute or
contingent, whether due or to become due and whether under this Guaranty or
otherwise.
Each Guarantor waives: notice of acceptance hereof; the right to a jury trial
in any action hereunder; presentment, demand and protest of any instrument and
notice thereof; notice of default, and all other notices to which such
Guarantor is or might be entitled; whether by law or otherwise; all right of
set off and counter claims. All actions or proceedings arising directly or
indirectly, in connection with, out of or related to this Guaranty may be
litigated, at your sole discretion and election, if Borrower has breached any
of the terms, provisions or covenants of the Contract; such litigation shall
not be deemed to be a waiver by Lender of such breach.
No Assignment or other transfer by Lender or Borrower of any interest, right or
obligation under the Contract or assumption by any third party of the
obligations of Borrower under the Contract shall extinguish or diminish the
unconditional, absolute, primary and direct liability of the undersigned under
this Guaranty. The undersigned hereby consent to and waive all notice of any
such assignment, transfer or assumption. If this Guaranty is executed by more
than one person, the release of any one Guarantor shall not terminate this
Guaranty as to any other Guarantor.
Any assignee of Lender shall have all of the rights of Lender hereunder and may
enforce this Guaranty against us with the same force and effect as if this
Guaranty were given to such assignee in the first instance. This Guaranty shall
inure to the benefit of Lender, and its successors and assigns, and shall be
binding upon us and our heirs, executors, administrators, personal
representatives, successors and assigns.
The undersigned agree to pay all expenses which may be incurred by Lender in
the enforcement of this Guaranty, including court costs and reasonable
attorney's fees.
If any provision of this Guaranty is prohibited, held to be invalid, or
otherwise found to be unenforceable by reason of any rule of law, or judgement
or decree entered by any court of competent jurisdiction in any state shall, as
to such state, be ineffective to the extent of such prohibition, invalidity or
unenforceability without affecting the remaining provisions hereof.
This guaranty agreement remains fully enforceable irrespective of any defenses
or counterclaims that the borrower may assert on the underlying debt, including
but not limited to failure of consideration, breach of warranty, fraud,
payment, statute of frauds, bankruptcy, infancy, statute of limitations, lender
liability, accord and satisfaction, and usury.
THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEVADA. THE UNDERSIGNED DO HEREBY SUBMIT TO THE
JURISDICTION OF ANY COURT (FEDERAL, STATE OR LOCAL) HAVING SITUS WITHIN THE
STATE OF NEVADA EXPRESSLY WAIVING PERSONAL SERVICE OF PROCESS AND CONSENT TO
SERVICE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO
THE LAST KNOWN ADDRESS OF THE UNDERSIGNED, WHICH SERVICE SHALL BE DEEMED
COMPLETED WITHIN TEN (10) DAYS AFTER THE DATE OF MAILING THEREOF.
234
IN WITNESS WHEREOF, the undersigned have executed this Guaranty on the _______
day of ______________________, 19__.
GUARANTORS:
_________________________________________________________________
BORROWER
FEDERAL BANK SIGNATURE GUARANTY
235
subsequent lessee or purchaser, all with the consent of the Franchisor in
accordance with the Franchise Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on
this _______ day of _________________________, 19__.
BORROWER (FRANCHISEE)
By: ________________________
Borrower
Stephens Diversified Leasing, Inc.
dba Stephens Franchise Finance
1475 Terminal Way, C-2
Reno, Nevada 89502
By: _________________________
Title: ______________________
Date: _______________________
Pizzeria Uno Corporation
100 Charles Park Road
West Roxbury, MA
By: _________________________
Title: ______________________
Date: _______________________
236
CORPORATE RESOLUTION
I, _______________________, do hereby certify that I am the duly elected and
qualified Secretary of __________________________________________________, a
corporation of the state of ___________________________ and that the following
is a true and correct copy of resolutions duly adopted by the Board of
Directors of said Corporation at a meeting duly convened and held in accordance
with applicable law and the Bylaws of said Corporation on this ____________ day
of _____________________, 1995, and that said resolutions have not been
rescinded and are now in full force and effect:
"RESOLVED, that the President, Vice President, Secretary or Treasurer
of this Corporation are authorized and directed, in accordance with the
Promissory Note presented to this meeting, to negotiate, execute and deliver on
behalf of the Corporation a loan with Stephens Diversified Leasing, Inc. dba
Stephens Franchise Finance, and its successors or assigns, whereby this
Corporation will loan funds for the purpose described in such Note and/or any
schedule thereto upon the terms and conditions thereof, which Note, and the
execution thereof, is hereby determined to be in the best interests of this
Corporation."
"RESOLVED, FURTHER, that the Secretary of this Corporation be, and
he/she hereby is, authorized and directed to execute and deliver to Stephens
Diversified Leasing, Inc. dba Stephens Franchise Finance, a certified copy of
this and the foregoing resolution."
IN WITNESS WHEREOF, I have signed my name as Secretary of said Corporation to
be hereunto affixed, this the _____ day of _______________________, 19___.
_______________________________________
(Authorized Signature/Secretary)
(Seal)
Please attach a copy of Articles of Incorporation.
(If no seal, please check: No Seal )
237
COLLATERAL ASSIGNMENT, ACCEPTANCE AND CONSENT
THIS COLLATERAL ASSIGNMENT, ACCEPTANCE AND CONSENT ("Agreement") is made and
entered into by and among Name of Borrower ("The Franchisee"), Stephens
Diversified Leasing, Inc. dba Stephens Franchise Finance ("SFF") and Pizzeria
Uno Corporation, (The "Franchisor").
W I T N E S S E T H
WHEREAS, the Franchisee and Franchisor have previously entered into a
Standard Franchise Agreement dated __________________ (the "Franchise
Agreement") whereby the Franchisor granted to the Franchisee the right to open
and operate the Franchise located at ______________________ (the "Franchisor")
in the location described in the Franchise Agreement; and
WHEREAS, the Franchisee has requested that SFF finance to the Franchise
certain equipment, personal property and real property which the Franchise uses
in connection with the operation of the Franchise;
WHEREAS, as a condition of SFF's agreeing to enter into the such a contract,
SFF has required that this Agreement be executed to permit SFF to assume the
Franchisee's rights under the Franchise Agreement (the "Franchise Agreement")
and operate the Franchise in the event of a default by the Franchisee under the
Contract;
NOW, THEREFORE, for and in consideration of the mutual covenants herein
contained and other good and valuable consideration, the adequacy and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. Incorporation of Contract. All of the terms and conditions set forth in
the Promissory Note and Security Agreement (the "Contract") between the
Franchisee and SFF are hereby incorporated into this Agreement by reference.
2. Default Under Contract. Upon default by the Franchisee under the Contract,
SFF may, in addition to the other rights and remedies available to it cause the
Franchise Agreement to be assigned to SFF as herein after provided. Upon the
occurrence of a default notice thereof by certified mail, return receipt
requested, to the Franchisee and Franchisor at the address set forth in the
Contract. If said default is not cured by the Franchisee or Franchisor to the
satisfaction of SFF within thirty (30) days from the date of receipt of the
Notice of Default, SFF may, at its sole and exclusive option, give the
Franchisee and Franchisor additional written notice ("Assignment Notice") of
the assignment of the Franchise Agreement by certified mail, return receipt
requested. Within three (3) days of the Franchisee's receipt of the Assignment
Notice, the Franchisee shall completely vacate the Franchise premises, but
shall not remove therefrom any of the equipment, furniture, fixtures,
inventory, supplies or other property of any kind used in connection with the
operation of the Franchise.
3. Assignment of Franchise Agreement. Upon receipt of the Assignment Notice
by the Franchisee and Franchisor, without further action by any party, the
Franchise Agreement shall in all respects be irrevocably and unconditionally
assigned and transferred to and vested exclusively in SFF, and in such event,
SFF shall be deemed to have assumed all of the obligations accruing pursuant to
the Franchise Agreement from the date of such assignment.
4. No Release. The Franchisee shall not be released from performing any of
the obligations of the Franchisee under the Franchise Agreement. The Franchisee
shall be jointly and severally liable with SFF for all obligations and
liabilities assumed by SFF upon assignment of the Franchise Agreement under the
Franchise Agreement. Payment of any such amounts by SFF under the Franchise
Agreement shall be assessable against the Franchisee and shall be paid by the
Franchisee to SFF.
5. Consent to Assignment. It is agreed among the parties hereto that the
assignment of the Franchisee Agreement by the Franchisee to SFF is solely for
the purpose of providing SFF with collateral security for the Franchisee's
obligations under the Contract. Accordingly, SFF agrees to use reasonable
efforts to locate a successor lessee or purchaser of the equipment subject to
the Contract and to cooperate with such subsequent lessee or purchaser to assign
the Franchise Agreement to such
238
subsequent lessee or purchaser, all with the consent of the Franchisor in
accordance with the Franchise Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on
this ________ day of ________________, 19 ___.
BORROWER (FRANCHISEE)
By: ____________________________________
Borrower
Stephens Diversified Leasing, Inc.
dba Stephens Franchise Finance
1475 Terminal Way, C-2
Reno, Nevada 89502
By: ______________________________________
Title: ___________________________________
Date: ____________________________________
Pizzeria Uno Corporation
100 Charles Park Road
West Roxbury, MA
By: ______________________________________
Title: ___________________________________
Date: ____________________________________
239
PROMISSORY NOTE
(60 Months)
FOR VALUE RECEIVED, ______________________________________, a __________
(the "Maker") promises to pay to the order of STEPHENS DIVERSIFIED LEASING, INC.
d/b/a STEPHENS FRANCHISE FINANCE (the "Payee"), at its office at 1475 Terminal
Way, C-2, Reno, NV 89502, or such other place as the holder of this Promissory
Note may from time to time designate in writing, in lawful money of the United
States of America, the principal sum of _____________00/100 dollars ($________),
together with interest on the unpaid balance thereof from the date hereof until
paid in full at the rate of __________________ percent (_____%) per annum to be
paid as follows: in _____________ (______) consecutive monthly payments of
______________00/100 dollars ($__________), with the first and last two
payments being due upon the execution of this promissory note and each
subsequent payment will be due on the same calendar day of each month
thereafter.
This Promissory Note is executed in connection with a Security
Agreement dated ___________, 199__, between the Maker and the SFF (the
"Security Agreement") and is secured by certain collateral as more specifically
described and referred to therein, the terms and conditions of said Security
Agreement are hereby incorporated herein by reference. Any default under said
Security Agreement or any other instrument securing this note shall be a
default under this note entitling SFF to accelerate the entire indebtedness
hereunder upon notice provided to Maker in accordance with said Security
Agreement. Reference is also made to the Security Agreement for a statement of
certain rights of the Payee following an event of default thereunder.
If any payment provided for herein remains wholly or partially unpaid
for more than ten (10) days after such payment is due and payable, then Makers
agree to pay a late charge of ten percent (10%) of such payments, not to exceed
the maximum amount allowed by the laws of the state of Nevada.
Provided Maker is not in default, Maker may prepay all or part of this
indebtedness at any time and from time to time, plus a prepayment of 2.5% of
the remaining principal balance. All such prepayments shall be applied to the
principal balance owning.
Maker agrees that in the event of default in the payment of the debt
evidenced by this Promissory Note or of any installment of principal provided
herein, the holder hereof shall have the right and option, without further
notice or demand, to declare all unpaid principal and accrued interest to be
immediately due, payable and collectible, time being of the essence of this
contract.
The Maker agrees that in the event the holder hereof fails to exercise
any privilege or option granted to it under this instrument, such failure shall
not constitute a waiver or forfeiture of the right to exercise such option or
privilege for successive breaches of this contract.
Makers, endorsers, sureties, guarantors, and all other persons now or
hereafter liable hereon, waive presentment, demand for payment, protest, notice
of dishonor and consent that the owner or Holder hereof shall have the right
without notice, to deal in any way at any time for any party hereto, or to
grant to any such party an extensions of time for payment of any said
indebtedness, or any other indulgences or forbearances whatever, without in any
way affecting the personal liability of any parties hereunder.
Provided Maker is not in default, Maker may prepay all or part of the
indebtedness at any time and from time to time, plus a prepayment of 2.5% of
the remaining principal balance. All such prepayments shall be applied to the
principal
240
balance owning.
In the event the Maker defaults in the payment of the debt evidenced
hereby or of any installment or as provided herein, the Maker agrees to pay all
costs of collection, including reasonable attorney's fees if collected by and
through an attorney at law.
This obligation shall be governed by and construed under the laws of
the State of Nevada and the Maker agrees that in the event of default to
consent to and be subject to the jurisdiction of the Courts of the State of
Nevada to enforce the terms of this obligation.
IN WITNESS WHEREOF, _______________________________________ executed
this Promissory Note this ________ day of __________________________, 1995.
__________________________________ ___________________________________
Name and Title Date
Address
City, State and Zip Code
241
PROMISSORY NOTE
(72 & 84 MONTH)
FOR VALUE RECEIVED, ________________________________, a _______________
corporation (the "Maker") promises to pay to the order of STEPHENS DIVERSIFIED
LEASING, INC. dba Stephens Franchise Finance (the "Payee"), at its office at
1475 Terminal Way #C-2, Reno, NV 89502, or such other place as the holder of
this Promissory Note may from time to time designate in writing, in lawful
money of the United States of America, the principal sum of __________________
and 00/100 dollars ($__________), together with interest on the unpaid balance
thereof from the date hereof until paid in full at the rate of __________
percent (_____%) per annum to be paid as follows: in ________________ (____)
consecutive monthly payments of ____________________ dollars ($_________), with
the first and last two payments being due upon the execution of this promissory
note and each subsequent payment will be due on the same calendar day of each
month thereafter. At the end of the sixtieth month, the Note may be paid off
based on SDL's pay-off schedule or if the Note has not been past due over sixty
(60) days on more than three (3) occasions, the Note may be renewed for an
additional ______________________ (____) month period at SDL's then current
rate.
This Promissory Note is executed in connection with a Security
Agreement dated __________, 199_, between the Maker and the SFF (the "Security
Agreement") and is secured by certain collateral as more specifically described
and referred to therein, the terms and conditions of said Security Agreement are
hereby incorporated herein by reference. Any default under said Security
Agreement or any other instrument securing this note shall be a default under
this note entitling SFF to accelerate the entire indebtedness hereunder upon
notice provided to Maker in accordance with said Security Agreement. Reference
is also made to the Security Agreement for a statement of certain rights of the
Payee following an event of default thereunder.
If any payment provided for herein remains wholly or partially unpaid
for more than ten (10) days after such payment is due and payable, then Makers
agree to pay a late charge of ten percent (10%) of such payments, not to exceed
the maximum amount allowed by the laws of the state of Nevada.
Provided Maker is not in default, Maker may prepay all or part of this
indebtedness at any time and from time to time. All such prepayments shall be
applied to the principal balance owning.
Maker agrees that in the event of default in the payment of the debt
evidenced by this Promissory Note or of any installment of principal provided
herein, the holder hereof shall have the right and option, without further
notice or demand, to declare all unpaid principal and accrued interest to be
immediately due, payable and collectible, time being of the essence of this
contract.
The Maker agrees that in the event the holder hereof fails to exercise
any privilege or option granted to it under this instrument, such failure shall
not constitute a waiver or forfeiture of the right to exercise such option or
privilege for successive breaches of this contract.
Makers, endorsers, sureties, guarantors, and all other persons now or
hereafter liable hereon, waive presentment, demand for payment, protest, notice
of dishonor and consent that the owner or Holder hereof shall have the right
without notice, to deal in any way at any time for any party hereto, or to
grant to any such party any extensions of time for payment of any said
indebtedness, or any other indulgences or forbearances whatever, without in
any way affecting the personal liability of any parties hereunder.
Provided Maker is not in default, Maker may prepay all or part of this
242
indebtedness at any time and from time to time, plus a prepayment of 2.5% of
the remaining principal balance. All such prepayments shall be applied to the
principal balance owing.
In the event the Maker defaults in the payment of the debt evidenced
hereby or of any installment or as provided herein, the Maker agrees to pay all
costs of collection, including reasonable attorney's fees if collected by and
through an attorney at law.
This obligation shall be governed by and construed under the laws of
the State of Nevada and the Maker agrees that in the event of default to
consent to and be subject to the jurisdiction of the Courts of the State of
Nevada to enforce the terms of this obligation.
IN WITNESS WHEREOF, _____________________ executed this Promissory Note
this _______ day of __________________, 1995.
Corporation
__________________________________ _________________________________
Signature Date
__________________________________
Title
243
INTERIM FUNDING PROMISSORY NOTE
FOR VALUE RECEIVED, _______________________________________ ("Maker")
promises to pay to the order of Stephens Diversified Leasing, Inc. dba Stephens
Franchise Finance ("SFF"), at its office at Reno, Nevada, or such other place
as the holder of this Promissory Note, prepared this ____ date of _____________,
____, may from time to time designate, the principal sum of ____________________
($__________) or so much thereof as may be advanced from time to time
hereunder, together with interest to be determined on the date of the making of
the note at the prime rate as quoted in the Wall Street Journal plus 300 basis
points until maturity. After the initial advance and the interest rate quoted
on that date, should there be any additional increases in the prime rate, the
interest on the initial advance as well as all subsequent advances will be at
the amount of the higher rate as of the date of such rate change or changes.
All principal and interest shall be due and payable in accordance with
the terms of an agreement between the Maker and SFF. At the sole and exclusive
option of SFF, provided SFF is then the holder of this Promissory Note, SFF may
accept payment of all amounts due hereunder either in lawful money of the
United States or by due execution and delivery to SFF by the maker of a
commitment letter between the Maker and SFF dated ________________________.
Advances hereunder shall be made by and at the discretion of SFF upon request
by Maker in a form acceptable to SFF which shall be accompanied by
documentation as may from time to time be required by SFF.
If this obligation, after default, is placed in the hands of an
attorney for collection, the Maker, all guarantors and other persons now or
hereafter liable hereon will be obligated to pay the holder an additional sum
as reasonable sum as reasonable attorney's fees.
This Promissory Note does not represent nor shall Maker be entitled to
utilize this instrument (and the commercial loan it evidences) as a revolving
line of credit.
The Maker hereof and all parties who at the time may be liable hereon
in any capacity, jointly and severally, waive presentment, demand for payment,
protest and notice of dishonor of this Promissory Note.
This instrument has been delivered by the Maker in the State of Nevada
and shall be governed by and construed under the laws of the State of Nevada and
by federal laws preempting otherwise applicable state law.
This Promissory Note may be executed in one or more counterparts and,
when so executed, each counterpart shall be deemed to be an original.
Name of Borrower
______________________________
Signature
______________________________
Title
______________________________
Date
244
SECURITY AGREEMENT
This Security Agreement ("Agreement") is made and entered into by and
between _______________________, a ____________________ corporation (the
"Debtor"), and Stephens Diversified Leasing, Inc., a Nevada corporation d/b/a
Stephens Franchise Finance (the "Secured Party").
Recitals
A. The Debtor is indebted to the Secured Party pursuant to a
Promissory Note dated _____________________ (the "Note"), to be converted to a
(Permanent Promissory Note) by and between Debtor and Secured Party executed
and delivered by the Debtor contemporaneously herewith in the principal amount
of ________________________ dollars ($.00).
B. To secure repayment of the Contract, and as a condition precedent
to the advance of funds by the Secured Party pursuant thereto, the Debtor has
agreed to grant to the Secured Party a security interest in certain property
hereinafter described.
Agreement
1. Security Interest. As collateral security for the payment and
performance of all the Obligations (as that term is defined in Section 2), the
Debtor hereby grants to the Secured Party a first priority, continuing security
interest in all the following collateral (collectively the "Collateral").
(a) All equipment, inventory, fixtures and other goods of any and
every kind whatsoever located at or used in connection with the Pizzeria Uno
restaurant presently located at ___________________________________ or any
successor location, and all general intangibles of any and every kind
whatsoever related thereto, all whether now owned or hereafter acquired by the
Debtor, and all replacements, substitutions and proceeds of all the foregoing;
and
(b) All the Debtor's interest in and rights under that certain
franchisee agreement dated ________________ between the Debtor and
__________________, and all modifications, extensions, replacement and
substitutions thereof, and all proceeds thereof; and
(c) All the Debtor's interest in and rights under that certain premises
lease agreement dated ____________________ between the Debtor and _____________
with respect to the premises described in Schedule "A" attached hereto and all
modifications, extensions, replacement and substitutions thereof, and all
proceeds thereof; and
(d) All other equipment, inventory, fixtures and other goods of any and
every kind whatsoever, wherever located, all other general intangibles of any
and every kind whatsoever, and all accounts, instruments, documents and chattel
paper of any and every kind whatsoever, all whether now owned or hereafter
acquired by the Debtor, and all replacements, substitutions and proceeds of all
the foregoing.
2. Obligations. The security interest created hereby in the
Collateral constitutes continuing collateral security for the prompt payment
and performance of any and all indebtedness and obligations of the Debtor to
the Secured Party of every kind, character and description, whether now
existing or hereafter incurred, including any and all renewals, extensions and
modifications thereof, howsoever and whensoever arising, whether absolute or
contingent, joint or several, matured or
245
arbitrator applicable to the Debtor or any of its assets.
(h) The Debtor is not in default under any agreement, indenture,
mortgage or obligation to which it is a party or by which any of its properties
may be bound.
(i) There is no action, suit or proceeding before any court,
governmental authority or arbitrator pending or, to the knowledge of the
Debtor, threatened against or affecting the Debtor, which in the best judgment
of the Debtor's management, even if adversely determined, would have a material
adverse effect on the financial condition or operations of the Debtor, the
ability of the Debtor to repay the Obligations or the ability of the Debtor to
perform its obligations under this Agreement or the Contract. There are no
outstanding judgments against the Debtor.
(j) The Debtor has filed all tax returns (federal, state and local)
required to be filed, including all income, franchise, employment, property and
sales taxes, and has paid all its tax liabilities. The Debtor knows of no
pending investigation of the Debtor by any taxing authority or of any pending
but unassessed tax liability of the Debtor.
(k) The Debtor has complied with all applicable minimum funding
requirements of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and there are no existing conditions that would give rise to
liability thereunder. No reportable event (as defined in Section 4043 of ERISA)
has occurred in connection with any employee benefit plan that might constitute
grounds for the termination thereof by the Pension Benefit Guaranty Corporation
or for the appointment by the appropriate United States District Court of a
trustee to administer such plan.
(l) The Debtor and its properties are in compliance with all
applicable environmental, health and safety laws, rules and regulations and the
Debtor is not subject to any liability or obligation for remedial action
thereunder. The Debtor has received no notice of any investigation or inquiry
by any governmental authority of the Debtor or any of its properties where any
of the Collateral is or will be located pertaining to any toxic or hazardous
waste or substance, and to the best of the Debtor's knowledge no such
investigation or inquiry is pending or threatened. No toxic or hazardous wastes
or substances are located on or under any of the properties of the Debtor where
any of the Collateral is or will be located. The Debtor has not caused or
permitted any toxic or hazardous waste or substance to be disposed of on or
under or released from any of its properties.
(m) The Secured Party has not at any time exercised or attempted to
exercise, directly or indirectly, any degree of control or influence of any
kind whatsoever over the internal business operations or financial affairs of
the Debtor. The Secured Party has not acted as a business, investment or
financial consultant or advisor to the Debtor and has not given the Debtor any
business, investment, or financial advice. The Secured Party has no fiduciary
or similar duty to the Debtor. The Secured Party has not participated in any
type of joint venture or partnership with the Debtor and the execution and
consummation of this Agreement and the transactions contemplated herein shall
not constitute or amount to a joint venture or partnership. The Secured Party
has not acted in any respect as the agent of the Debtor for any purpose and no
agency relationship shall be created by the execution of this Agreement and the
consummation of the transactions contemplated hereby.
(n) The Secured Party has made no representation or statements of
material fact to the Debtor in connection with the obligations of the Debtor
hereunder or in connection with the negotiation, execution or delivery of this
Agreement or the consummation of the transactions herein contemplated except as
expressly set forth herein.
246
(o) No event of default has occurred and no event which, with notice or
the passage of time, or both, would constitute an event of default, has
occurred.
4. The Debtor's Covenants and Further Agreements. So long as any of the
Obligations shall remain outstanding:
(a) The Debtor shall pay to the Secured Party all amounts due under the
Contract in accordance with the terms thereof and all other Obligations.
(b) The Debtor shall promptly and properly execute such financing
statements and other documents (and pay the costs of filing or recording all
such documents in all public offices deemed necessary by the Secured Party),
and shall promptly and properly perform such other acts and deeds, all as the
Secured Party might reasonably request, to properly establish and maintain the
valid liens and security interests now or hereafter created in the Collateral
pursuant to this Agreement and to carry out the provisions and purposes of this
Agreement. The Debtor shall, at its sole expense, maintain the Collateral free
and clear of all liens, security interests, encumbrances or claims of any kind,
except the security interest of the Secured Party granted hereby, and defend
any action which might affect the security interest granted to the Secured
Party hereby or the Debtor's title to the Collateral.
(c) The Debtor shall maintain the Collateral in good operating
condition and shall not permit any waste or destruction of the Collateral or
any part thereof. The Debtor shall comply with any and all warranties or
maintenance agreements covering the Collateral. The Debtor shall not use or
permit the Collateral to be used in violation of any law or inconsistently with
the terms of any applicable policy of insurance. The Debtor shall not use or
permit the Collateral to be used in any manner that would impair the value of
the Collateral or expose the Collateral to unusual risk.
(d) The Debtor shall conduct its business in an orderly and efficient
manner consistent with good business practices and in accordance with all
laws applicable to the Debtor.
(e) The Debtor shall use all funds advanced by the Secured Party and
all the Collateral only for lawful business purposes.
(f) The Debtor shall not sell, lease or otherwise dispose of all or any
part of the Collateral, or the real property where such Collateral is located,
without the prior written consent of the Secured Party.
(g) The Debtor shall promptly provide to the Secured Party such
reports, data and financial statements in respect of the Collateral and the
Debtor's business and financial condition, as the Secured Party may from time
to time reasonably require, but no less frequently than annually.
(h) The Debtor shall immediately notify the Secured Party of any
material change occurring in or to the Collateral, of any change in the name,
principal place of business, chief executive office, mailing address or form of
business entity of the Debtor, or of any change in any fact or circumstances
warranted or represented by the Debtor to the Secured Party herein, or if any
event of default occurs.
(i) The Debtor shall keep all of the tangible Collateral, both now
owned and hereafter acquired, at the address of the Debtor set forth on
Schedule "A" attached hereto.
(j) The Debtor shall pay promptly, before delinquent, all property and
other
247
taxes, assessments and governmental charges or levies imposed upon, and all
claims (including claims for labor, materials, and supplies) against, the
Collateral, except to the extent the validity thereof is being contested
diligently and in good faith by proper proceedings satisfactory to the Secured
Party.
(k) The Debtor shall, at its sole expense, maintain insurance with
respect to the Collateral in such amounts, against such risks, in such form and
with such insurers, as shall be customary for companies engaged in businesses
similar to that of the Debtor, and as shall be satisfactory to the Secured
Party. The Secured Party shall be named as an additional insured or loss payee
under such policies, as the Secured Party may specify. All such policies shall
provide for a minimum of thirty (30) day's prior written notice to the Secured
Party prior to cancellation. The Debtor shall furnish the Secured Party with
certificates or other evidence satisfactory to the Secured Party of compliance
with the requirements of this section.
(l) The Debtor shall preserve and maintain its corporate existence
and all of its leases, privileges, franchises, licenses, permits,
qualifications and rights that are necessary or desirable in the ordinary
conduct of its business.
(m) The Debtor shall comply with all minimum funding requirements,
and all other material requirements, of ERISA, if applicable to the Debtor, so
as not to give rise to any liability thereunder. The Debtor shall notify the
Secured Party immediately of any fact, including, but not limited to, any
"reportable event" as that term is defined in Section 4043 of ERISA, arising in
connection with any such plan which might constitute grounds for the
termination thereof by the Pension Benefit Guaranty Corporation or for the
appointment by the appropriate United States District Court of a trustee to
administer such plan and furnish to the Secured Party, promptly upon its
request therefor, such additional information concerning any such plan as may be
reasonably requested.
(n) Neither the Debtor nor any person acting on its behalf shall
take any action which might cause this Agreement or the transactions
contemplated hereby to violate any laws, regulations or rules applicable to the
Debtor, its business or its properties, and the Debtor will take all actions
necessary to cause compliance with all laws, regulations and rules applicable
to the Debtor, its business and its properties.
(o) The Debtor shall permit officers, agents and employees of the
Secured Party to examine the Debtor's business premises and records at
reasonable times and under reasonable conditions and to discuss the business,
operations and financial condition of the Debtor with its officers and
employees and with its independent certified public accountants.
(p) The Debtor will promptly notify the Secured Party of (i) the
occurrence of an event of default, or of any event that with notice or lapse of
time or both would be an event of default, (ii) the commencement of any action,
suit or proceeding against the Debtor that might have a material adverse effect
on the business, financial condition or operations of the Debtor, (iii) a
change in the Senior Management of the Debtor, and (iv) any other matter that
might have a material adverse effect on the Collateral or the business,
financial condition or operations of the Debtor.
5. Additional Provisions Concerning the Collateral.
(a) The Debtor hereby authorizes the Secured Party to file, without
the signature of the Debtor where permitted by law, one or more financing or
continuation statements, and amendments thereto, relating to the Collateral as
contemplated by this Agreement.
248
(b) If the Debtor fails to perform any agreement contained herein, the
Secured Party may itself perform, or cause performance of, such agreement or
obligation, and the expenses of the Secured Party incurred in connection
therewith shall be payable by the Debtor under Section 8 hereof, and shall be
fully secured hereby.
(c) The powers conferred on the Secured Party hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. The Secured Party shall have no duty as to any
Collateral.
(d) the Secured party may at any time during normal business hours
enter upon the premises where the Collateral is located to inspect the
Collateral.
6. Events of Default. The occurrence of any of the following events
shall constitute an event of default hereunder and under the Promissory Note:
(a) Following ten (10) days prior written notice thereof, nonpayment of
any installment due and payable under the Contract within ten (10) days of the
scheduled due date of such installment.
(b) Following ten (10) days prior written notice thereof, nonpayment of
any other Obligations within ten (10) days of the due date thereof.
(c) Following thirty (30) days prior written notice thereof, failure of
the Debtor to properly, timely and fully perform any covenant, agreement or
promise contained in this Agreement or the Contract.
(d) Any statement, representation or warranty of or by the Debtor,
whether set forth in this Agreement or in any credit application, financial
statement or otherwise in connection with the transactions contemplated by this
Agreement, to the Secured Party proves to be untrue or misleading in any respect
at any time prior to the complete repayment of the Obligations.
(e) The Debtor becomes insolvent, is unable to pay its debts as they
become due, makes an assignment for the benefit of creditors, files a petition
for relief under any bankruptcy or insolvency laws or has such a petition filed
against it which is not dismissed within thirty (30) days.
(f) The Debtor shall at any time sell, lease or otherwise dispose of,
or grant any lien or security interest in or otherwise encumber, all or any of
the Collateral.
(g) The Debtor ceases doing business as a going concern.
(h) Any execution or writ of process is issued in connection with any
action or proceeding whereby the Collateral is sought to be taken.
(i) This Agreement, the Contract or any other documents delivered to
the Secured Party in connection with this Agreement shall for any reason cease
to be in full force and effect, or shall be declared null or unenforceable in
whole or in part, or the validity or enforceability of any such documents shall
be challenged or denied by any party hereto or thereto excluding the Secured
Party.
(j) Any default under any instrument involving the Collateral securing
this Agreement and the Contract shall be an event of default.
7. Remedies Upon Default. In addition to all other rights and remedies
provided for herein, the Secured Party shall have all the rights and remedies
of a secured party under the Uniform Commercial Code and other applicable law.
Without
249
limiting the generality of the foregoing, following an event of default the
Secured Party may (i) require the Debtor to, and the Debtor hereby agrees that
it will at its sole expense and upon request of the Secured Party, forthwith
assemble all or part of the Collateral as directed by the Secured Party and
make it available to the Secured Party at a place to be designated by the
Secured Party which is reasonably convenient to both parties; (ii) without
notice, take possession of all or part of the Collateral and for that purpose
the Secured Party may enter upon any premises on which the Collateral is
located and remove the Collateral thereform or render it inoperable; and
(iii) without notice except as specified below, sell, lease or otherwise
dispose of the Collateral or any part thereof in one or more parcels at public
or private sale, at any of the Secured Party's offices or elsewhere, for cash,
on credit or for future delivery, and at such price or prices and upon such
other terms as the Secured Party may deem commercially reasonable. The Debtor
agrees that, to the extent notice of sale shall be required by law, at least
five (5) days' notice to the Debtor of the proposed action shall constitute
fair and reasonable notice thereof. The Secured Party may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. The Secured Party may apply the Collateral
to payment of the Obligations in such order and manner as the Secured Party may
elect in its sole discretion, consistent with applicable law. The Debtor shall
remain liable for any deficiency if the proceeds of any sale or disposition of
the Collateral are insufficient to pay all the Obligations in full. The Debtor
waives any rights of marshalling in respect of the Collateral. In the event the
Secured Party seeks to take possession of any or all of the Collateral by
judicial process, the Debtor hereby irrevocably waives any bonds and any surety
or security relating thereto that may be required by applicable law as an
incident to such possession and waives any demand for possession prior to the
commencement of any such suit or action.
8. Indemnity and Expenses.
(a) The Debtor agrees to indemnify the Secured Party from and
against any and all claims, losses and liability growing out of, resulting from
or in any way related to this Agreement (including, without limitation,
enforcement of this Agreement), except claims, losses or liabilities resulting
solely and directly from the Secured Party's gross negligence or willful
misconduct.
(b) The Debtor shall reimburse the Secured Party for all its
expenses, including the fees and expenses of its legal counsel, incurred in
connection with the negotiation and preparation of this Agreement and in
connection with the transactions contemplated by this Agreement and in
connection with the enforcement or preservation of the Secured Party's rights
under this Agreement. Such expenses shall be paid promptly upon request by the
Secured Party.
9. Notices. All notices and other communications provided for
hereunder shall be in writing and shall be mailed by certified mail, return
receipt requested, or sent by overnight courier service, to the respective
addresses of the parties set forth on the signature page hereof. All such
notices and other communications shall be effective (i) if mailed, when
received or three (3) days after mailing, whichever is earlier; and (ii) if
delivered, upon delivery.
10. Security Interest Absolute. All rights of the Secured Party,
all security interests and all Obligations of the Debtor shall be absolute and
unconditional irrespective of: (i) any change in the time, manner or place of
payment of, or in any other term in respect of, all or any of the Obligations,
or any other amendment or waiver of or consent to any departure from this
Agreement or any other agreement or instrument relating hereto or thereto;
(ii) any increase in, addition to, or exchange, release or non-perfection of,
any Collateral; (iii) any other circumstances
250
which might otherwise constitute a defense available to, or a discharge of, the
Debtor in respect of the Obligations or this Agreement; or (iv) the absence of
any action on the part of the Secured Party to obtain payment or performance of
the Obligations from the Debtor or any other party.
11. Miscellaneous.
(a) No amendment of any provision of this Agreement shall be
effective unless it is in writing and signed by the Debtor and the Secured
Party, and no waiver of any provision of this Agreement, and no consent to any
departure by the Debtor therefrom, shall be effective unless it is in writing
and signed by the Secured Party, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
(b) No failure on the part of the Secured Party to exercise, and no
delay in exercising, any right hereunder or under any other instrument or
document shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or
the exercise of any other right. The rights and remedies of the Secured Party
provided herein are cumulative and are in addition to, and not exclusive of,
any rights or remedies provided by law.
(c) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or invalidity without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
(d) This Agreement shall create a continuing security interest in
the Collateral and shall (i) remain in full force and effect until the payment
in full of all of the Obligations, (ii) be binding on the Debtor and the
Debtor's successors and permitted assigns and shall inure, together with all
rights and remedies of the Secured Party hereunder, to the benefit of the
Secured Party and its respective successors, transferees and assigns. None of
the rights or obligations of the Debtor hereunder may be assigned or otherwise
transferred without the prior written consent of the Secured Party.
(e) Upon the satisfaction in full of all of the Obligations, the
Secured Party will, upon the Debtor's request and at the Debtor's expense,
execute and deliver to the Debtor such documents as the Debtor shall reasonably
request to evidence termination of the security interests herein granted.
(f) This Agreement shall be governed by and construed in accordance
with the laws of the State of Nevada, except as required by mandatory
provisions of law and except to the extent that the validity or perfection of
the security interests created hereby, or remedies hereunder, in respect of any
particular Collateral are governed by the laws of a jurisdiction other than the
State of Nevada.
251
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement on this ________ day of _____________, 1995.
Name of Borrower
Street Address
City, State, Zip
By: _____________________________________
Title: _____________________________________
Stephens Diversified Leasing, Inc.
d/b/a Stephens Franchise Finance
1475 Terminal Way #C-2
Reno, Nevada 89502
By: _____________________________________
Title: _____________________________________
252
ASSIGNMENT OF LEASE
ASSIGNMENT OF LEASE made this ____ day of ___________, 1995, by and
between _______________________________________________, with an address of
______________________________(hereinafter "Borrower") and Stephens Diversified
Leasing, Inc. dba Stephens Franchise Finance (hereinafter "SFF").
WHEREAS, SFF and Borrower, have entered into a Financing Agreement
pursuant to a Promissory Note and Security Agreement (the "Financing
Agreement") dated ______________ for the purchase of the Franchise located at
_______________________ (the "Franchise"); and
WHEREAS, Borrower is the assignee under the provisions of that certain lease
between (Name of Borrower) and (Landlord) dated ____________________ (the
"Lease"); and
WHEREAS, pursuant to the terms of the Financing Agreement, and as a condition
therefore, Borrower has agreed to assign its interest in the Lease to SFF in
the event of a default under the terms of the Financing Agreement, upon certain
conditions as set forth herein.
NOW THEREFORE, IT IS AGREED:
1. Assignment. Upon occurrence of a default, as set forth in
paragraph 2(b) hereof, Borrower assigns to SFF all of its right, title and
interest in and to the Lease, subject to the terms and conditions precedent
contained herein. This assignment shall include all right, title and interest
in and to the premises described in the Lease (the "Premises"), easements and
rights-of-way appurtenant thereto, and any Equipment located in the Premises in
which SFF may have a security interest pursuant to the terms of the Financing
Agreement, and all rents or income derived from the Lease.
2. Conditions for Assignment.
(a) So long as Borrower is not in default under the terms of
the Financing Agreement, the assignment set forth in
paragraph 1 hereof shall be of no force and effect, and
Borrower shall remain in possession of the Premises and the
Equipment, and shall be able to exercise all of its rights
pursuant to the Lease without the interference of SFF,
subject only to the restrictions of this Assignment and the
Financing Agreement.
(b) Should Borrower default in its obligations under the terms
of the Financing Agreement, and should such default
continue beyond any applicable cure period, SFF may, in
addition to any remedies which it may have under the
253
Financing Agreement, and subject to the
provisions of paragraph 4 hereof, upon notice in
writing given to Borrower and Landlord at least
thirty days prior to the effective date, receive
the assignment of the Lease pursuant to
paragraph 1 hereof, take possession of the
Premises and personal property contained
therein, and do such acts affecting the Premises
as SFF deems necessary to protect the value
thereof, and may exercise the rights of Borrower
under the Lease with respect to the Premises as
assignee thereunder.
3. Acceptance. Upon the occurrence of default as set forth in
paragraph 2(b) hereof, the assignment thereunder, and consent of the Landlord,
SFF shall be deemed to have accepted the assignment and transfer of the Lease,
and shall pay all rent, additional rent and other sums due thereunder, and
faithfully to perform all covenants, stipulations, agreements and obligations
under the Lease accruing on and after the date of such assignment, or otherwise
attributable to the period commencing on that date and continuing thereafter.
The parties acknowledge that the assignment of the Lease hereunder is solely
for the purpose of providing Stephens with security for the obligations of
Borrower under the Financing Agreement. SFF agrees to use reasonable efforts
and to cooperate with Landlord to locate a successor lessee, and to cooperate
with such successor lessee to assign the Lease to such successor lessee.
4. Consent of Landlord. The parties hereto acknowledge that the
Lease contains a provision which authorizes assignment of Borrower interest
only upon the consent and assignment without such consent constitutes a default
under the Lease, and that the Landlord's consent should be obtained by Borrower
at the time of the execution of this. Upon the occurrence of a default as set
forth in paragraph 2(b) hereof and in the event that the consent of the
Landlord has not been obtained, Borrower will cooperate with SFF to obtain the
consent of the Landlord of this assignment. However, SFF agrees that its rights
hereunder are subject to the Landlord's consent and that in the event of the
Landlord's refusal to consent to the assignment hereunder, Borrower agrees that
the Note payments may be accelerated and all remaining payments become due and
payable upon notice from SFF.
5. Warranties and Representations. During the term of this
assignment, Borrower agrees:
(a) To keep the Premises in good condition and
repair.
(b) To provide and maintain hazard insurance upon
the Premises in an amount satisfactory to SFF;
provided, however, that maintenance of
insurance in accordance with the terms of the
Lease shall be deemed to be sufficient for
purposes of this Financing Agreement.
254
(c) To pay, in a timely fashion, all rents, taxes, assessments or other
charges of any type, kind or nature whatsoever affecting the Lease
or the Premises. Should Borrower fail to make such payments as
herein provided, SFF may, but without obligation to do so, make or
do any such payment or act in such a manner and to such an extent
as SFF may deem necessary to protect the security hereof, and to
recover such amounts from Borrower.
(d) Not to amend, change or modify the terms of the Lease without prior
written notice to SFF.
(e) Apply all terms and covenants of Lease.
6. Subordination. This Assignment shall be subordinate to any mortgage,
deed of trust, assignment or security interest executed by Landlord covering the
Premises. The subordination provided by this paragraph shall be self-executing
without the necessity of any specific subordination agreement.
7. Purpose. The parties hereto acknowledge that the purpose of this
assignment is to secure the performance of Borrower under the terms of the
Financing Agreement, and the payment of all sums due thereunder, and for no
other reason.
8. Terms and Termination. This Financing Agreement shall be effective
the date stated above, and shall continue in full force and effect until the
first to occur of the following:
(a) Payment in full of all sums due under the provisions of the Note or
Financing Agreement.
(b) Sale of the Equipment to a third party with the consent of SFF.
(c) Assignment of the Lease to a third party with the consent of SFF.
(d) Termination by a Financing Agreement executed by all parties
hereto.
9. Miscellaneous and General.
(a) This Financing Agreement contains all the agreements and
understandings made between the parties hereto with respect to the
subject matter hereof, and may not be modified orally or in any
manner other
255
than by a Financing Agreement in writing signed by all the parties
hereto or their respective successors in interest.
(b) This Financing Agreement shall be construed, governed and enforced
in accordance with the laws of the state of Nevada, with
jurisdiction to adjudicate any actions arising hereunder in the
courts and tribunals of said state.
(c) If any provisions of this Financing Agreement shall be held to be
invalid, void or unenforceable, the remaining provisions hereof
shall in no way be in full force and effect.
(d) Captions and titles contained in this Financing Agreement are for
convenience and reference only and are not to be construed as
defining, limiting or modifying the scope or intent of the various
provisions hereof.
(e) Any statement, notice or communication required or permitted
hereunder shall be deemed sufficiently given if sent by certified or
registered mail, addressed as follows:
Borrower's Name and Address
-------------------------------------------
-------------------------------------------
-------------------------------------------
Stephens Diversified Leasing, Inc.
dba Stephens Franchise Finance
1475 Terminal Way, C-2
Reno, NV 89502
Any party may change its address by notice so given to the others.
256
IN WITNESS WHEREOF, and intending to be legally bound hereby, the
parties hereto have executed this Financing Agreement the day and year first
above written.
BORROWER
By:
----------------------------
Signature
Title:
----------------------------
Date:
----------------------------
Stephens Diversified Leasing, Inc.
dba Stephens Franchise Finance
By:
----------------------------
Title:
----------------------------
Date:
----------------------------
257
CONSENT TO ASSIGNMENT AS COLLATERAL SECURITY
RECITALS
A. The undersigned is Landlord under a written lease dated ___________________
hereinafter referred to as the ("Lease") pursuant to which Landlord leased to
___________________ as Tenant (hereinafter "Tenant") in the premises commonly
known as ___________________ .
B. Tenant is desirous of assigning its interests in said Lease to Stephens
Diversified Leasing, Inc. dba Stephens Franchise Finance ("Assignee") as
collateral security for a Promissory Note and Security Agreement to be executed
between Assignee and Tenant pursuant to a letter agreement dated
___________________ .
FOR VALUE RECEIVED, the undersigned hereby:
1. Consents to Tenant mortgaging its leasehold interest in the Lease with
Assignee to be designated as Beneficiary;
2. Consents to the Assignment of Lease as Collateral Security and grants to
the Assignee and its successors and assigns the right to cure any default under
the lease; grants the Assignee and its successors and assigns the right to
immediate occupancy of the premises and/or obligation of Tenant to the
Assignee; and/or grants to the Assignee and its successors and assigns the
right of substitution of a third-party tenant in the event of default by Tenant
in the terms and/or conditions of the Lease and/or the obligation of Tenant to
the Assignee.
In the event a default occurs under the terms and conditions of the Lease,
undersigned agrees to give to Assignee notice of default within ten (10) days
thereafter by registered or certified mail in order that the default may be
cured.
DATED: ___________________ , 19 ____ .
LANDLORD NAME AND ADDRESS:
___________________________________
Name
___________________________________
(Authorized Signature & Title)
________________________________________________________________________________
Street Address Phone
________________________________________________________________________________
City, State, Zip
Name of Franchisee/Tenant ______________________________________________________
258
Stephens Diversified Leasing, Inc.
dba Stephens Franchise Finance
LANDLORD DISCLAIMER AND WAIVER
OF INTEREST IN FINANCED PERSONAL PROPERTY
The undersigned is the Landlord of the Premises located at:
______________________________
______________________________
______________________________
As an inducement to Stephens Diversified Leasing, Inc. dba Stephens Franchise
Finance ("SFF") to finance the personal property ("Equipment") covered by a
Promissory Note and Security Agreement, and in consideration of the sum of One
Dollar ($1.00) and other good and valuable consideration, receipt of which is
hereby acknowledged, the undersigned Landlord hereby consents to the
installation of the Equipment and disclaims any title or right therein by
reason of such installation; and agrees the Equipment shall remain personal;
and waives and relinquishes unto SFF and its assignees all right of levy or
distraint for rent, all right to claim that the Equipment is or will at any
time become a fixture or fixtures, and all rights, claims, and demands of every
kind against the Equipment and all replacements thereof and additions thereto.
This disclaimer and waiver shall continue in full force and effect until
Borrower has paid the full amount owing and fulfilled all obligations in
accordance with the terms and conditions of the Promissory Note and Security
Agreement stated above, and any renewals, extensions, and/or substitutions
thereof. Further, the undersigned Landlord hereby consents to the removal of
the equipment from the premises stated above, whether such removal is
occasioned by an event of default or termination of the Promissory Note and
Security Agreement stated above. This waiver may not be altered or amended
without the written consent of SFF, shall be binding upon the heirs, personal
representatives, successors, mortgagees, and assignees of the undersigned, and
shall be effective as of the date of the Promissory Note and Security Agreement
noted above covering the purchase of the Equipment at the premise stated above.
Dated the __________ day of ______________________, 19_____.
LANDLORD
_________________________________
Street Address
_________________________________
City, State, Zip
_________________________________
(Authorized Signature)
_________________________________
Title
259
AFFIDAVIT OF IDENTITY
STATE OF ___________________________)
COUNTY OF __________________________)
Date: __________________________, 19__
Affiant: ______________________
Affiant on oath swears that the following statements are true:
1) Affiant, ______________________, is the same ________________________, named
in a __________________________ Corporation, ______________________ dba
Franchisor.
2) Affiant's Social Security number is _______________________.
3) Signatures on attached Promissory Note, Security Agreement, Guaranty and
related documents are true and correct signatures of the affiant.
__________________________________
ACKNOWLEDGEMENT
STATE OF ___________________________)
COUNTY OF __________________________)
This instrument was acknowledged before me on this ______ day of ______________
__________, 19__, by _________________________.
__________________________________
Notary Public, State of __________
Print Name ______________________
Commission Expires _______________
260
PLEDGE AGREEMENT
(Certificate of Deposit)
This Pledge Agreement ("Agreement") is made and entered into this
____ day of _________, 199_, by and between Andres De La Torre ("Pledgor"), and
Stephens Diversified Leasing, Inc., a Nevada corporation doing business as
Stephens Franchise Finance (the "Pledgee").
RECITALS
A. The Pledgor has personally guaranteed certain obligations of
_____________________________, a ________________________ corporation ("Name
of Borrower") to the Pledgee (the "__________________________ Obligations")
pursuant to the Pledgor's Guaranty dated ____________, 199_.
B. To secure the obligation of the Pledgor to the Pledgee pursuant
to the Guaranty, the Pledgor has agreed to pledge to the Pledgee Certificate of
Deposit No. ___________, issued by ___________________________________ (the
"Bank"), in the name of the Pledgor, in the face amount of ____________________
__________________________dollars and no/100 ($________________) (the
"Certificate of Deposit").
AGREEMENT
1. Pledge. The Pledgor hereby pledges, assigns and transfers to
the Pledgee, and grants to the Pledgee a continuing security interest in the
Certificate of Deposit as security for the prompt payment to the Pledgee of all
amounts due under the Guaranty. The Pledgor delivers the Certificate of
Deposit, duly endorsed in blank by the Pledgor, to the Pledgee herewith.
2. Term. The Pledgee shall hold the Certificate of Deposit, and
any and all renewals thereof, as security and the Certificate of Deposit shall
remain so pledged to the Pledgee until all obligations under the Guaranty and
all the _______________________ Obligations are paid in full in accordance with
their terms.
3. Default. Upon the occurrence of any default of the Pledgor
under the Guaranty which shall continue for fifteen (15) days or more after
notice shall have been given by the Pledgee, then or at any time thereafter,
the Pledgee shall have the right to endorse, negotiate, redeem, sell, assign
and/or transfer the Certificate of Deposit and collect from the Bank all
amounts payable pursuant to the Certificate of Deposit, either at or prior to
the maturity thereof, at the sole option of the Pledgee, without any consent by
or further notice to the Pledgor or any other person. Thereafter, the Pledgee,
after deducting all its costs or expenses, shall apply the residue of the
proceeds of the Certificate of Deposit to the payment or reduction of the
Pledgor's obligations to the Pledgee under the Guaranty; the surplus, if any,
shall be returned to the Pledgor. The Pledgor acknowledges that the Certificate
of Deposit is subject to substantial penalties for early withdrawal and hereby
consents to the application of the Certificate of
41
261
Deposit before maturity to the indebtedness of the Pledgor as herein provided
and waives any claims that she/he may have against the Pledgee or against the
Certificate of Deposit with respect to any such penalties.
4. Interest. Prior to presentment of the Certificate of Deposit for
payment by the Pledgee following a default by the Pledgor under the Guaranty as
provided herein, interest payable on account of the Certificate of Deposit may
be paid to the Pledgor. Nothing herein, however, shall give the Pledgor any
right of any kind whatsoever to the principal of the Certificate of Deposit.
5. Waiver. The Pledgor hereby waives any and all notice of acceptance
of this Agreement by the Pledgee and any default under the ___________________
Obligations and hereby agrees (1) to any extensions of time for payment of the
_________________ Obligations without limit as to the number or the aggregate
period of such extensions, (2) to the granting of any other indulgences to
________________, (3) that the Pledgee may make or consent to any form of
adjustment, compromise or composition respecting the _____________________
Obligations or any collateral securing the ___________________ Obligations and
may release any or all said collateral, and (4) that any or all of the
foregoing may be without notice to or the further consent of the Pledgor.
6. Remedies. The rights, powers and remedies given to the Pledgee
hereunder shall be in addition to all rights, powers and remedies given to the
Pledgee by virtue of any statute, rule of law or any other agreement now or
hereafter given in connection with the Guaranty or the ____________________
Obligations. Any forbearance or failure or delay by the Pledgee in exercising
any right, power or remedy shall not be deemed to be a waiver of any such
right, power or remedy and any single or partial exercise of any right, power
or remedy hereunder shall not preclude the further exercise thereof; and every
right, power and remedy of the Pledgee shall continue in full force and effect
until such right, power or remedy is specifically waived by an instrument in
writing executed by the Pledgee.
7. Benefit. This Agreement shall be binding upon, and shall inure to
the benefit of, the parties hereto, their heirs, successors and assigns.
8. Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Nevada.
PLEDGOR: ____________________________
By: ____________________________
Title: ____________________________
42
262
PLEDGEE: STEPHENS DIVERSIFIED LEASING, INC.
DBA STEPHENS FRANCHISE FINANCE
By: ___________________________________
Title: ___________________________________
BANK ACKNOWLEDGEMENT
1. ________________________________ (The "Bank") hereby acknowledges to
the Pledgor and the Pledgee named above (a) that it has received a duly executed
copy of the foregoing Pledge Agreement, and (b) that the foregoing pledge has
been duly and properly recorded in the Bank's records.
2. The Bank hereby agrees (a) that neither Pledgor nor any other person
except the Pledgee shall be permitted to negotiate, redeem, sell, assign and/or
transfer the Certificate of Deposit without the prior written consent of the
Pledgee (which written consent shall require the signature of a duly authorized
officer of the Pledgee) and (b) the Pledgee may at any time, upon presentment
of the pledged Certificate of Deposit, duly endorsed by the Pledgee, redeem
said Certificate of Deposit without the consent of or notice to any other
person.
3. The Bank hereby waives any right of off-set or lien it may now or
hereafter have with respect to the Certificate of Deposit.
NAME AND ADDRESS OF BANK
By: ___________________________________
Title: ___________________________________
NOTARY
43
263
This FINANCING STATEMENT is presented for filing pursuant to the Nevada Uniform Commercial Code.
====================================================================================================================================
1. DEBTOR (ONE NAME ONLY) 1A. SOCIAL SECURITY OR FEDERAL TAX NO.
[ ] LEGAL BUSINESS NAME
[ ] INDIVIDUAL (LAST NAME FIRST)
- ------------------------------------------------------------------------------------------------------------------------------------
1B. MAILING ADDRESS 1C. CITY, STATE 1D. ZIP CODE
- ------------------------------------------------------------------------------------------------------------------------------------
1E. RESIDENCE ADDRESS 1F. CITY, STATE 1G. ZIP CODE
====================================================================================================================================
2. ADDITIONAL DEBTOR (IF ANY) (ONE NAME ONLY) 2A. SOCIAL SECURITY OR FEDERAL TAX NO.
[ ] LEGAL BUSINESS NAME
[ ] INDIVIDUAL (LAST NAME FIRST)
- ------------------------------------------------------------------------------------------------------------------------------------
2B. MAILING ADDRESS 2C. CITY, STATE 2D. ZIP CODE
- ------------------------------------------------------------------------------------------------------------------------------------
2E. RESIDENCE ADDRESS 2F. CITY, STATE 2G. ZIP CODE
====================================================================================================================================
3. [ ] ADDITIONAL DEBTOR(S) ON ATTACHED SHEET
- ------------------------------------------------------------------------------------------------------------------------------------
4. SECURED PARTY 4A. SOCIAL SECURITY NO., FEDERAL TAX
NO. OR BANK TRANSIT AND A.B.A. NO.
NAME
MAILING ADDRESS
CITY STATE ZIP CODE
====================================================================================================================================
5. ASSIGNEE OF SECURED PARTY (IF ANY) 5A. SOCIAL SECURITY NO., FEDERAL TAX
NO. OR BANK TRANSIT AND A.B.A. NO.
NAME
MAILING ADDRESS
CITY STATE ZIP CODE
====================================================================================================================================
6. This FINANCING STATEMENT covers the following types or items of property (if crops or timber, include description of real
property on which growing or to be growing and name of record owner of such real estate; if fixtures, include description
of real property to which affixed or to be affixed and name of record owner of such real estate; if oil, gas or minerals,
include description of real property from which to be extracted).
6A.
------------------------------------------
SIGNATURE OF RECORD OWNER 6C. $
----------------------------------------
MAXIMUM AMOUNT OF INDEBTEDNESS TO
6B. BE SECURED AT ANY ONE TIME (OPTIONAL)
-----------------------------------------
(TYPE) RECORD OWNER OF REAL PROPERTY
====================================================================================================================================
7. Check [X] A [ ] Proceeds of B [ ] Products of C [ ] Proceeds of above described D [ ] Collateral was brought
if collateral collateral original collateral in which into this State subject
Applicable are also are also a security interest was to security interest in
covered covered perfected another jurisdiction
(Debtors Signature Not Required) (Debtors Signature Not Required)
====================================================================================================================================
8. Check [X]
if [ ] DEBTOR IS A "TRANSMITTING UTILITY" IN ACCORDANCE WITH NRS 704.205 AND NRS 104.9403
Applicable
====================================================================================================================================
9. (Date) 19 11. This Space for Use of Filing Officer
---------------------------- ----- (Date, Time, File Number and Filing Officer)
By:
--------------------------------------------------------------------
SIGNATURE(S) OF DEBTOR(S) (TITLE)
-----------------------------------------------------------------------
TYPE NAME(S)
By:
--------------------------------------------------------------------
SIGNATURE(S) OF SECURED PARTY(IES) (TITLE)
-----------------------------------------------------------------------
TYPE NAME(S)
===========================================================================
10. RETURN COPY TO
NAME
ADDRESS
CITY, STATE
AND ZIP
264
CERTIFICATE OF ACCEPTANCE OF PROPERTY
We hereby certify that all of the Property referred to in the attached Exhibit
"A" has been delivered to and has been received by us, and Borrower hereby
accepts the condition of each and every item in the "as is" condition and is in
all respects satisfactory to Borrower, and that the Property is accepted by us
for all purposes under a Promissory Note and Security Agreement dated
_________________________ and accordingly hereby authorize Seller to make
payment according to the terms of the aforementioned Promissory Note.
Borrower:
______________________________________
Signature
______________________________________
Title
______________________________________
Date
265
ATTACHMENT E
LIST OF ADMINISTRATORS
CALIFORNIA MARYLAND
Department of Corporations Maryland Securities Commissioner
3700 Wilshire Blvd., 6th Floor Office of the Attorney General
Los Angeles, CA 90010 200 St. Paul Place
20th Floor
Baltimore, Maryland 21202-2020
HAWAII
MICHIGAN
Business Registration Division
Department of Commerce Department of the
and Consumer Affairs Attorney General's Office
1010 Richards Street Consumer Protection Division
Honolulu, Hawaii 96813 Attn: Franchise
670 Law Building
Lansing, Michigan 48913
ILLINOIS
MINNESOTA
Chief, Franchise Division
Attorney General's Office Franchise Examiner
500 South Second Street Department of Commerce
Springfield, Illinois 62706 133 East Seventh Street
St. Paul, Minnesota 55101
INDIANA
NEBRASKA
Secretary of State
Franchise Section Nebraska Department of
Securities Division Banking and Finance
302 West Washington, 1200 N. Street
Room E-111 P.O. Box 95006
Indianapolis, Indiana 46204 Lincoln, Nebraska 68509-5006
ATTACHMENT E-1
266
NEW YORK SOUTH DAKOTA
- -------- ------------
Special Deputy Attorney General Franchise Administrator
New York Department of Law Department of Commerce and
Bureau of Investor Protection Regulation
and Securities Division of Securities
120 Broadway, 23rd Floor c/o 118 West Capitol Avenue
New York, New York 10271 Pierre, South Dakota 57501-2017
NORTH DAKOTA TEXAS
- ------------ -----
Franchise Examiner Statutory Document Section
Securities Commissioner Secretary of State
State of North Dakota P.O. Box 12887
600 East Boulevard, Fifth Floor Austin, Texas 78711
Bismarck, North Dakota 58505
OREGON VIRGINIA
- ------ --------
Director Chief Examiner
Department of Consumer and State Corporation Commission
Business Services Division of Securities
Division of Finance and and Retail Franchising
Corporate Securities 1300 East Main Street, 9th Floor
Labor and Industries Building Richmond, Virginia 23219
Salem, Oregon 97310
WASHINGTON
----------
RHODE ISLAND
- ------------ Department of Financial Institutions
Securities Division
Chief Securities Examiner Washington Department of Licensing
Director of Business Regulation P.O. Box 9033
Division of Securities Olympia, Washington 98507-9033
Suite 232
233 Richmond Street
Providence, Rhode Island 02903-4232 WISCONSIN
---------
Franchise Administrator
Securities and Franchise Registration
Wisconsin Securities Commission
P.O. Box 1768
101 East Wilson St., 4th Fl.
Madison, Wisconsin 53701
ATTACHMENT E-2
267
ITEM 23
-------
RECEIPT
-------
THIS OFFERING CIRCULAR SUMMARIZES CERTAIN PROVISIONS OF THE FRANCHISE AGREEMENT
AND OTHER INFORMATION IN PLAIN LANGUAGE. READ THIS OFFERING CIRCULAR AND ALL
AGREEMENTS CAREFULLY.
IF WE OFFER YOU A FRANCHISE, WE MUST PROVIDE THIS OFFERING CIRCULAR TO YOU BY
THE EARLIEST OF:
(1) THE FIRST PERSONAL MEETING TO DISCUSS OUR FRANCHISE; OR
(2) TEN BUSINESS DAYS BEFORE THE SIGNING OF A BINDING AGREEMENT; OR
(3) TEN DAYS BEFORE A PAYMENT TO US.
YOU MUST ALSO RECEIVE A FRANCHISE AGREEMENT CONTAINING ALL MATERIAL TERMS AT
LEAST 5 BUSINESS DAYS BEFORE YOU SIGN A FRANCHISE AGREEMENT.
IF WE DO NOT DELIVER THIS OFFERING CIRCULAR ON TIME OR IF IT CONTAINS A FALSE
OR MISLEADING STATEMENT, OR MATERIAL OMISSION, A VIOLATION OF FEDERAL AND STATE
LAW MAY HAVE OCCURRED AND SHOULD BE REPORTED TO THE FEDERAL TRADE COMMISSION,
WASHINGTON, D.C. 20580 AND THE APPLICABLE STATE AGENCY LISTED IN ATTACHMENT E.
I have received a Pizzeria Uno Corporation Uniform Franchise Offering Circular
dated December 22, 1995. This Offering Circular includes the following
Attachments:
A. Agents for Service of Process
B. Table of Contents for Manuals
C. Financial Statements
D. Contracts
1. Franchise Agreement (with Guarantee and exhibits)
2. Development Agreement
3. Financing Agreements
(a) letter agreement
(b) guarantee
(c) corporate resolution
(d) collateral assignment, acceptance and consent
(e) promissory note (60 months)
(f) promissory note (72 and 84 month)
(g) interim funding promissory note
(h) security agreement
(i) assignment of lease
(j) consent to assignment as collateral security
(k) landlord disclaimer and waiver of interest
(l) affidavit of identity
(m) pledge agreement
(n) financing statement
(o) certificate of acceptance of property
E. List of Administrators
__________________________ ________________________________________________
Date Franchisee
[RETAIN THIS COPY FOR YOUR RECORDS]
-51-
268
ITEM 23
-------
RECEIPT
-------
THIS OFFERING CIRCULAR SUMMARIZES CERTAIN PROVISIONS OF THE FRANCHISE AGREEMENT
AND OTHER INFORMATION IN PLAIN LANGUAGE. READ THIS OFFERING CIRCULAR AND ALL
AGREEMENTS CAREFULLY.
IF WE OFFER YOU A FRANCHISE, WE MUST PROVIDE THIS OFFERING CIRCULAR TO YOU BY
THE EARLIEST OF:
(1) THE FIRST PERSONAL MEETING TO DISCUSS OUR FRANCHISE; OR
(2) TEN BUSINESS DAYS BEFORE THE SIGNING OF A BINDING AGREEMENT; OR
(3) TEN DAYS BEFORE A PAYMENT TO US.
YOU MUST ALSO RECEIVE A FRANCHISE AGREEMENT CONTAINING ALL MATERIAL TERMS AT
LEAST 5 BUSINESS DAYS BEFORE YOU SIGN A FRANCHISE AGREEMENT.
IF WE DO NOT DELIVER THIS OFFERING CIRCULAR ON TIME OR IF IT CONTAINS A FALSE
OR MISLEADING STATEMENT, OR MATERIAL OMISSION, A VIOLATION OF FEDERAL AND STATE
LAW MAY HAVE OCCURRED AND SHOULD BE REPORTED TO THE FEDERAL TRADE COMMISSION,
WASHINGTON, D.C. 20580 AND THE APPLICABLE STATE AGENCY LISTED IN ATTACHMENT E.
I have received a Pizzeria Uno Corporation Uniform Franchise Offering Circular
dated December 22, 1995. This Offering Circular includes the following
Attachments:
A. Agents for Service of Process
B. Table of Contents for Manuals
C. Financial Statements
D. Contracts
1. Franchise Agreement (with Guarantee and exhibits)
2. Development Agreement
3. Financing Agreements
(a) letter agreement
(b) guarantee
(c) corporate resolution
(d) collateral assignment, acceptance and consent
(e) promissory note (60 months)
(f) promissory note (72 and 84 month)
(g) interim funding promissory note
(h) security agreement
(i) assignment of lease
(j) consent to assignment as collateral security
(k) landlord disclaimer and waiver of interest
(l) affidavit of identity
(m) pledge agreement
(n) financing statement
(o) certificate of acceptance of property
E. List of Administrators
__________________________ ________________________________________________
Date Franchisee
[RETURN THIS COPY TO US]