EXHIBIT 10.25
BUFFALO WILD WINGS(R) FRANCHISE AGREEMENT
BETWEEN
BUFFALO WILD WINGS INTERNATIONAL, INC.
1600 UTICA AVENUE, SUITE 700
MINNEAPOLIS, MN 55416
AND
____________________________________________
____________________________________________
NAME OF FRANCHISEE(S)
____________________________________________
STREET ADDRESS
____________________________________________
CITY STATE ZIP CODE
____________________________________________
PHONE NUMBER
AUTHORIZED LOCATION:
____________________________________________
STREET
____________________________________________
CITY STATE ZIP CODE
EFFECTIVE DATE:
____________________________________________
(To be completed by us)
CONFIDENTIAL
(C) 2006 Buffalo Wild Wings International, Inc.
--TABLE OF CONTENTS--
BUFFALO WILD WINGS(R) FRANCHISE AGREEMENT
SECTION PAGE
1. DEFINITIONS..............................................................................................1
2. GRANT OF LICENSE.........................................................................................2
3. TRADEMARK STANDARDS AND REQUIREMENTS.....................................................................4
4. TERM AND RENEWAL.........................................................................................5
5. FACILITY STANDARDS AND MAINTENANCE.......................................................................6
6. PRODUCTS AND OPERATIONS STANDARDS AND REQUIREMENTS......................................................11
7. PERSONNEL AND SUPERVISION STANDARDS.....................................................................15
8. ADVERTISING.............................................................................................16
9. FEES, REPORTING AND AUDIT RIGHTS........................................................................18
10. YOUR OTHER OBLIGATIONS; NONCOMPETE COVENANTS............................................................21
11. TRANSFER OF FRANCHISE...................................................................................23
12. DISPUTE RESOLUTION......................................................................................27
13. DEFAULT AND TERMINATION.................................................................................28
14. POST-TERM OBLIGATIONS...................................................................................29
15. GENERAL PROVISIONS......................................................................................31
APPENDICES
A. Trademarks
B. Designated Area
C. Addendum to Lease
D. Electronic Transfer of Funds Authorization
E. Gift Cards Participation Agreement
F. Enrollment Form and Portal Terms and Conditions
BUFFALO WILD WINGS(R) FRANCHISE AGREEMENT
This Franchise Agreement is made this ____ day of ____________, 200_ between
BUFFALO WILD WINGS INTERNATIONAL, INC., an Ohio corporation with its principal
business located at 1600 Utica Avenue South, Suite 700, Minneapolis, Minnesota
55416 ("we" or "us"), and __________________________, a(n)
______________________ whose principal business address is
__________________________________________ ("franchisee" or "you"). If the
franchisee is a corporation, partnership, limited liability company or other
legal entity, certain provisions to this Agreement also apply to its owners.
RECITALS
A. Our parent company has developed a unique system for video
entertainment oriented, fast casual restaurants that feature chicken wings,
sandwiches, unique food service and other products, beverages and services using
certain standards and specifications;
B. Many of the food and beverage products are prepared according
to specified recipes and procedures, some of which include proprietary sauces
and mixes.
C. Our parent company owns the BUFFALO WILD WINGS(R) Trademark
and other trademarks used in connection with the operation of a BUFFALO WILD
WINGS restaurant;
D. Our parent company has granted to us the right to sublicense
the right to develop and operate BUFFALO WILD WINGS restaurants; and
E. You desire to develop and operate a BUFFALO WILD WINGS
restaurant and we, in reliance on your representations, have approved your
franchise application.
In consideration of the foregoing and the mutual covenants and
consideration below, you and we agree as follows:
DEFINITIONS
1. For purposes of this Agreement, the terms below have
the following definitions:
A. "Control Person" means the individual who has the authority
to, and does in fact, actively direct your business affairs in regard
to the Restaurant, is responsible for overseeing the general management
of the day-to-day operations of the Restaurant and has authority to
sign on your behalf on all contracts and commercial documents. The
Control Person is identified on the Ownership and Management Addendum
attached to this Agreement.
B. "Gross Sales" includes the total revenues and receipts from
the sale of all products, services and merchandise sold in your
Restaurant whether under any of the Trademarks or otherwise, including
any cover charges or fees, vending or similar activities in your
Restaurant or on its premises as well as all license and use fees.
Gross Sales excludes sales taxes.
C. "Menu Items" means the chicken wings, sandwiches and other
products and beverages prepared according to our specified recipes and
procedures, as we may modify and change them from time to time.
D. "Principal Owner" means any person or entity who, now or
hereafter, directly or indirectly owns a 10% or greater interest in the
franchisee when the franchisee is a corporation, limited liability
company, partnership, or a similar entity. However, if we are entering
into this Agreement totally or partially based on the financial
qualifications, experience, skills or managerial qualifications of any
person or entity who directly or indirectly owns less than a 10%
interest in the franchisee, we have the right to designate that person
or entity as a Principal Owner for all purposes under this Agreement.
In addition, if the franchisee is a partnership entity, then each
person or entity who, now or hereafter is or becomes a general partner
is a Principal Owner, regardless of the percentage ownership interest.
If the franchisee is one or more individuals, each individual is a
Principal Owner of the franchisee. Each franchisee must have at least
one Principal Owner. Your Principal Owner(s) are identified on the
Ownership and Management Addendum attached to this Agreement. Every
time there is a change in the persons who are your Principal Owners,
you must, within 10 days from the date of each such change, update the
Ownership and Management Addendum. As used in this Agreement, any
reference to Principal Owner includes all Principal Owners.
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E. "Restaurant" means the BUFFALO WILD WINGS Restaurant you
develop and operate pursuant to this Agreement.
F. "System" means the BUFFALO WILD WINGS System, which
consists of distinctive food and beverage products prepared according
to special and confidential recipes and formulas with unique storage,
preparation, service and delivery procedures and techniques, offered in
a setting of distinctive exterior and interior layout, design and color
scheme, signage, furnishings and materials and using certain
distinctive types of facilities, equipment, supplies, ingredients,
business techniques, methods and procedures together with sales
promotion programs, all of which we may modify and change from time to
time.
G. "Trademarks" means the BUFFALO WILD WINGS Trademark and
Service Mark that have been registered in the United States and
elsewhere and the trademarks, service marks and trade names set forth
on Appendix A, as we may modify and change from time to time, and the
trade dress and other commercial symbols used in the Restaurant. Trade
dress includes the designs, color schemes and image we authorize you to
use in the operation of the Restaurant from time to time.
H. "Unit General Manager" means the individual who (i)
personally invests his or her full time and attention and devotes his
or her best efforts to the on-premises general management of the
day-to-day operations of the Restaurant, (ii) meets our prior
restaurant or retail management experience requirements, and (iii) does
not participate in the active operation or management of any business
other than the Restaurant. The Unit General Manager must be appointed
at least 60 days prior to the Restaurant opening, fully trained 20 days
prior to the Restaurant opening and is or will be identified on the
Ownership and Management Addendum attached to this Agreement.
GRANT OF LICENSE
2. The following provisions control with respect to the license
granted hereunder:
A. Authorized Location. We grant to you the right and license
to establish and operate a retail Restaurant identified by the BUFFALO
WILD WINGS Trademarks or such other marks as we may direct, to be
located at a location
__________________________________________________________
______________________ or a location to be designated within 90 days
from the date of this Agreement (the "Authorized Location"). When a
location has been designated by you and approved by us, it will become
part of this subparagraph 2.A as if originally stated. If an Authorized
Location is not designated by you and approved by us within 90 days
from the date of this Agreement, we have the right to declare this
Agreement null and void without the return of any Initial Franchise Fee
or other amounts paid to us. You accept the license and undertake the
obligation to operate the Restaurant at the Authorized Location using
the Trademarks and the System in compliance with the terms and
conditions of this Agreement.
B. Designated Area. You must locate and operate the Restaurant
at an Authorized Location within the area described in Appendix B (the
"Designated Area"). We and our affiliates will not locate and operate
or grant to anyone else a franchise to locate and operate a BUFFALO
WILD WINGS restaurant within the Designated Area so long as this
Agreement is in effect, except as provided in subparagraph 2.D. You do
not have any right to sublicense or subfranchise within or outside of
the Designated Area and do not have the right to operate more than one
Restaurant within the Designated Area.
C. Opening. You agree that the Restaurant will be open and
operating in accordance with the requirements of subparagraph 5.A
within (i) 270 days from the date of this Agreement if the Restaurant
is located within an end cap, shopping mall, Special Site or other
similar location, or (ii) 365 days from the date of this Agreement if
the Restaurant is a free-standing building, unless in either case we
authorize in writing an extension of time. Notwithstanding the
foregoing, if you are entering this Agreement pursuant to an Area
Development Agreement executed between you and us, you agree to open
the Restaurant by the date stated in the Area Development Agreement. If
you fail to have your Restaurant open and in operation according to the
provisions of this subparagraph 2.C, we will have the right to
terminate this Agreement without opportunity to cure pursuant to
subparagraph 13.B.2.
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D. Nonexclusivity; Our Reservation of Rights. The license is
limited to the right to develop and operate one Restaurant at the
Authorized Location located in the Designated Area, and does not
include (i) any right to sell products and Menu Items identified by the
Trademarks at any location other than the Authorized Location, except
for authorized catering and delivery services as noted in subparagraph
2.E, or through any other channels or methods of distribution,
including the internet (or any other existing or future form of
electronic commerce), (ii) any right to sell products and Menu Items
identified by the Trademarks to any person or entity for resale or
further distribution, or (iii) any right to exclude, control or impose
conditions on our development of future franchised, company or
affiliate owned restaurants at any time or at any location. You
acknowledge that the consumer service area or trade area of another
BUFFALO WILD WINGS restaurant may overlap with your Designated Area.
You also acknowledge and agree that we and our affiliates have
the right to operate and franchise others the right to operate
restaurants or any other business within and outside the Designated
Area under trademarks other than the BUFFALO WILD WINGS Trademarks,
without compensation to any franchisee, except that our operation of,
or association or affiliation with, restaurants (through franchising or
otherwise) in the Designated Area that compete with BUFFALO WILD WINGS
restaurants in the video entertainment oriented, fast casual restaurant
segment will only occur through some form of merger or acquisition with
an existing restaurant chain (except as otherwise provided for in this
subparagraph). Outside of the Designated Area, we and our affiliates
have the right to grant other franchises or develop and operate company
or affiliate owned BUFFALO WILD WINGS restaurants and offer, sell or
distribute any products or services associated with the System (now or
in the future) under the Trademarks or any other trademarks, service
marks or trade names or through any distribution channel or method, all
without compensation to any franchisee.
We and our affiliates have the right to offer, sell or
distribute, within and outside the Designated Area, any frozen,
pre-packaged items or other products or services associated with the
System (now or in the future) or identified by the Trademarks, or any
other trademarks, service marks or trade names, except for Prohibited
Items (as defined below), through any distribution channels or methods,
without compensation to any franchisee. The distribution channels or
methods include, without limitation, grocery stores, club stores,
convenience stores, wholesale, hospitals, clinics, health care
facilities, business or industry locations (e.g. manufacturing site,
office building), military installations, military commissaries or the
internet (or any other existing or future form of electronic commerce).
The Prohibited Items are the following items that we will not sell in
the Designated Area through other distribution channels or methods: any
retail food service Menu Items that are cooked or prepared to be served
to the end user or customer for consumption at the retail location
(unless sold at the limited seating facilities referenced in
subparagraph (i) of the paragraph above). For example, chicken wings
cooked and served to customers at a grocery store or convenience store
would be a Prohibited Item, but the sale of frozen or pre-packaged
chicken wings at a grocery store or convenience store would be a
permitted form of distribution in the Designated Area.
You acknowledge and agree that certain locations within and
outside the Designated Area are by their nature unique and separate in
character from sites generally developed as BUFFALO WILD WINGS
restaurants. As a result, you agree that the following locations
("Special Sites") are excluded from the Designated Area and we have the
right to develop or franchise such locations: (1) military bases; (2)
public transportation facilities; (3) sports facilities, including race
tracks; (4) student unions or other similar buildings on college or
university campuses; (5) amusement and theme parks; and (6) community
and special events.
In addition, you acknowledge and agree that, subject to your
right of first refusal as set forth below, we and our affiliates have
the right to operate or franchise within and outside the Designated
Area one or more facilities selling, for dine in or take out, all or
some of the Menu Items, using the Trademarks or any other trademarks,
service marks or trade names, without compensation to any franchisee,
provided, however, that such facilities shall not have an interior area
larger than 2,400 square feet and shall not have seating capacity for
more than 48 people ("Limited Seating Facilities"). If we develop a
model for a Limited Seating Facility and determine that your Designated
Territory is an appropriate market for such a facility, we will provide
to you a written offer ("Offer") specifying the terms and conditions
for your development of the Limited Seating Facility. You will have 90
days following your receipt of the Offer to accept the Offer by
delivering written notice to us of your acceptance, provided that you
are not in default under this Agreement or any other Agreement with us
or our affiliates. If you do not provide written notice to us within
the time period or if you are in default under this Agreement or any
other agreement with us or our affiliates, you will lose the right to
develop the Limited Seating Facility and we may develop or franchise
others to develop the Limited Seating Facility within your Designated
Area. You acknowledge and agree that if you accept the Offer, we may
require you to submit a full application, pay an initial fee and sign a
new form of franchise agreement.
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E. Catering and Delivery. You may not engage in catering and
delivery services and activities within or outside of the Designated
Area, unless we authorize you in writing, as further described in
subparagraph 6.L. We and our affiliate companies will not engage in
catering and delivery services and activities in the Designated Area;
however, we have no obligation to enforce similar covenants against any
other franchisee.
TRADEMARK STANDARDS AND REQUIREMENTS
3. You acknowledge and agree that the Trademarks are our parent
company's property and it has licensed the use of the Trademarks to us with the
right to sublicense to others. You further acknowledge that your right to use
the Trademarks is specifically conditioned upon the following:
A. Trademark Ownership. The Trademarks are our parent
company's valuable property, and it is the owner of all right, title
and interest in and to the Trademarks and all past, present or future
goodwill of the Restaurant and of the business conducted at the
Authorized Location that is associated with or attributable to the
Trademarks. Your use of the Trademarks will inure to our parent
company's benefit. You may not, during or after the term of this
Agreement, engage in any conduct directly or indirectly that would
infringe upon, harm or contest our parent company's rights in any of
the Trademarks or the goodwill associated with the Trademarks,
including any use of the Trademarks in a derogatory, negative, or other
inappropriate manner in any media, including but not limited to print
or electronic media.
B. Trademark Use. You may not use, or permit the use of, any
trademarks, trade names or service marks in connection with the
Restaurant except those set forth in Appendix A or except as we
otherwise direct in writing. You may use the Trademarks only in
connection with such products and services as we specify and only in
the form and manner we prescribe in writing. You must comply with all
trademark, trade name and service mark notice marking requirements. You
may use the Trademarks only in association with products and services
approved by us and that meet our standards or requirements with respect
to quality, mode and condition of storage, production, preparation and
sale, and portion and packaging.
C. Restaurant Identification. You must use the name BUFFALO
WILD WINGS GRILL & BAR as the trade name of the Restaurant and you may
not use any other mark or words to identify the Restaurant without our
prior written consent. You may not use any of the words BUFFALO, WILD
or WINGS or any of the other Trademarks as part of the name of your
corporation, partnership, limited liability company or other similar
entity. You may use the Trademarks on various materials, such as
business cards, stationery and checks, provided you (i) accurately
depict the Trademarks on the materials as we prescribe, (ii) include a
statement on the materials indicating that the business is
independently owned and operated by you, (iii) do not use the
Trademarks in connection with any other trademarks, trade names or
service marks unless we specifically approve in writing prior to such
use, and (iv) make available to us, upon our request, a copy of any
materials depicting the Trademarks. You must post a prominent sign in
the Restaurant identifying you as a BUFFALO WILD WINGS franchisee in a
format we deem reasonably acceptable, including an acknowledgment that
you independently own and operate the Restaurant and that the BUFFALO
WILD WINGS Trademark is owned by our parent company and your use is
under a license we have issued to you. All your internal and external
signs must comply at all times with our outdoor/indoor guidelines and
practices, as they are modified from time to time.
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D. Litigation. In the event any person or entity improperly
uses or infringes the Trademarks or challenges your use or our use or
ownership of the Trademarks, we will control all litigation and we have
the right to determine whether suit will be instituted, prosecuted or
settled, the terms of settlement and whether any other action will be
taken. You must promptly notify us of any such use or infringement of
which you are aware or any challenge or claim arising out of your use
of any Trademark. You must take reasonable steps, without compensation,
to assist us with any action we undertake. We will be responsible for
our fees and expenses with any such action, unless the challenge or
claim results from your misuse of the Trademarks in violation of this
Agreement, in which case you must reimburse us for our fees and
expenses.
E. Changes. You may not make any changes or substitutions to
the Trademarks unless we direct in writing. We reserve the right to
change the Trademarks at any time. Upon receipt of our notice to change
the Trademarks, you must cease using the former Trademarks and commence
using the changed Trademarks, at your expense. If the changes to the
Trademarks require substantial remodeling due to a modernization in
trade dress, the expenditure will be considered toward the Maximum
Modernization Amount described in subparagraph 5.E. If the changes to
the Trademarks result in a required change to outdoor signage, such
changes will be subject to the provisions in 5.F.
TERM AND RENEWAL
4. The following provisions control with respect to the term and
renewal of this Agreement:
A. Term. The initial term of this Agreement is 20 years,
unless this Agreement is sooner terminated in accordance with Paragraph
13. The initial term commences upon the Effective Date (as defined in
subparagraph 15.S) of this Agreement. We may extend this initial term
in writing for a limited period of time not to exceed 6 months to take
into account the term of any applicable lease for the Authorized
Location.
B. Renewal Term and Conditions of Renewal. You may renew your
license for two renewal terms, (the first renewal term is 10 years; the
second renewal term is 5 years), provided that with respect to each
renewal: (i) you have given us written notice of your decision to renew
at least 6 months but not more than 12 months prior to the end of the
expiring term; (ii) you sign our then-current form of franchise
agreement (modified to reflect no additional renewal term upon
expiration and other modifications to reflect that the agreement
relates to the grant of a renewal), the terms of which may differ from
this Agreement, including higher fees and a modification to the
Designated Area (although in no event will the revised Designated Area
have a residential population of the lesser of approximately 30,000 to
40,000 or the residential population that existed as of the Effective
Date); (iii) you have complied with the provisions of subparagraph 5.E
regarding modernization and you perform any further items of
modernization and/or replacement of the building, premises, trade
dress, equipment and grounds as may be necessary for your Restaurant to
conform to the standards then applicable to new BUFFALO WILD WINGS
restaurants, regardless of the cost of such modernizations and/or
replacements, unless we determine that you should relocate your
Restaurant because your Authorized Location no longer meets our
then-current site criteria, in which case you must comply with the 90
and 270 day relocation requirements of subparagraph 5.D; (iv) you are
not in default of this Agreement or any other agreement pertaining to
the franchise granted, have satisfied all monetary and material
obligations on a timely basis during the term and are in good standing;
(v) if leasing the Restaurant premises (and not subject to relocation
under (iii) above), you have renewed the lease and have provided
written proof of your ability to remain in possession of the premises
throughout the renewal period; (vi) you comply with our then-current
training requirements; (vii) you pay us, at least 30 days prior to the
end of the expiring term, a renewal fee in the amount of $20,000; and
(viii) you and your Principal Owners and guarantors execute a general
release of claims in a form we prescribe.
C. Relocation Upon Renewal. If, as a condition of renewal, we
require you to relocate your Restaurant pursuant to subparagraph
4.B(iii) above, you may renew your license for two renewal terms (the
first renewal term for 15 years and the second renewal term for 5
years), provided that with respect to each renewal, you meet all
conditions stated in subparagraph 4.B.
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FACILITY STANDARDS AND MAINTENANCE
5. You acknowledge and agree that we have the right to establish,
from time to time, quality standards regarding the business operations of
BUFFALO WILD WINGS restaurants and stores to protect the distinction, goodwill
and uniformity symbolized by the Trademarks and the System. Accordingly, you
agree to maintain and comply with our quality standards and agree to the
following terms and conditions:
A. Restaurant Facility; Site Under Control. You are
responsible for purchasing or leasing a site that meets our site
selection criteria. You must obtain our written consent to the site.
Prior to granting our consent to a site, you must have the site
evaluated by the proprietary site evaluator software that has been
developed by GeoVue, Inc. You must execute the Enrollment Form and
Portal Terms and Conditions attached as Appendix F and pay GeoVue, Inc.
an evaluation fee of $400 per site evaluated, but you must pay for the
rights to have at least 3 sites evaluated and these fees are non
refundable. If your authorized location is located in an area with a
lower population or smaller trade area, we may reduce the number of
required site evaluations. You may not use the Restaurant premises or
Authorized Location for any purpose other than the operation of a
BUFFALO WILD WINGS Restaurant during the term of this Agreement. We
make no guarantees concerning the success of the Restaurant located on
any site to which we consent.
You may not open your Restaurant for business until we have
notified you in writing that you have satisfied your pre-opening
obligations as set forth in subparagraphs 5.A and 5.B and we have
approved your opening date. We are not responsible or liable for any of
your pre-opening obligations, losses or expenses you might incur for
your failure to comply with these obligations or your failure to open
by a particular date. We also are entitled to injunctive relief or
specific performance under subparagraph 12.C for your failure to comply
with your obligations.
In the event that you plan to enter into any type of lease for
the Restaurant premises, you and your landlord must sign the Lease
Addendum attached as Appendix C. We recommend you submit the Lease
Addendum to the landlord at the beginning of your lease review and
negotiation, although the terms of the Lease Addendum may not be
negotiated without our prior approval. If the landlord requires us to
negotiate the Lease Addendum, we reserve the right to charge you a fee,
which will not exceed our actual costs associated with the negotiation.
You must provide us a copy of the executed lease and Lease Addendum
within 5 days of its execution. We have no responsibility for the
lease; it is your sole responsibility to evaluate, negotiate and enter
into the lease for the Restaurant premises.
You must execute, and provide us an executed copy of your
lease (including an executed copy of the Lease Addendum) or the
purchase agreement for the selected and approved site for your
Restaurant within 120 days from the date of execution of this Agreement
if the Restaurant will be in a free standing location or within 90 days
from the execution of this Agreement if the selected and consented to
site for the Restaurant is in a non-free standing location. If you fail
to have your "site under control" (execute the lease or the purchase
agreement within the periods set forth in this subparagraph), we will
have the right to terminate this Agreement without opportunity to cure
pursuant to subparagraph 13.B.2.
B. Construction; Future Alteration. You must construct and
equip the Restaurant in strict accordance with our current approved
specifications and standards pertaining to equipment, inventory,
signage, fixtures, furnishings, accessory features (including sports
memorabilia) and design and layout of the building. You may not
commence construction of the Restaurant until you have received our
written consent to your building plans. If your Restaurant is not
constructed strictly according to the previously consented building
plans, we will not approve your Restaurant for opening. You will have
30 days from the date we deny our approval for opening your Restaurant
to correct all the construction problems so that your Restaurant is
strictly constructed according to the consented building plans. If you
fail to correct the problems within the 30 day period we may
immediately terminate this Agreement pursuant to subparagraph 13.B.2.
If the Restaurant opening is delayed for the foregoing reasons, you
will be responsible for any losses and costs related to such delay.
Without limiting the generality of the prior paragraph, you
must promptly after obtaining possession of the site for the
Restaurant: (i) retain the services of one of our designated
architects; and (ii) retain the services of a general contractor and
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audio/visual equipment providers and installers, each of whom must have
successfully gone through our application process or otherwise been
approved by us in writing (although if this Agreement is for your first
BUFFALO WILD WINGS restaurant or if you or any of your affiliates have
failed to timely open any other BUFFALO WILD WINGS restaurant in
accordance with the terms of any franchise agreement with us, you must
use one of our designated general contractors); (iii) have prepared and
submitted for our approval a site survey and basic architectural plans
and specifications (not for construction) consistent with our general
atmosphere, image, color scheme and ambience requirements as set forth
from time to time in the manuals for a BUFFALO WILD WINGS restaurant
(including requirements for dimensions, exterior design, materials,
interior design and layout, equipment, fixtures, furniture, signs and
decorating); (iv) purchase or lease and then, in the construction of
the Restaurant, use only the approved building materials, equipment,
fixtures, audio visual equipment, furniture and signs; (v) complete the
construction and/or remodeling, equipment, fixtures, furniture and sign
installation and decorating of the Restaurant in full and strict
compliance with plans and specifications we approve and all applicable
ordinances, building codes and permit requirements without any
unauthorized alterations; (vi) obtain all customary contractors' sworn
statements and partial and final waiver obtain all necessary permits,
licenses and architectural seals and comply with applicable legal
requirements relating to the building, signs, equipment and premises,
including, but not limited to, the Americans With Disabilities Act; and
(vii) obtain and maintain all required zoning changes, building,
utility, health, sanitation, liquor and sign permits and licenses and
any other required permits and licenses (if this Agreement is for your
first BUFFALO WILD WINGS restaurant or if in any previous franchise
agreement executed between you or any of your affiliates and us, you or
any of your affiliates have not met your obligations regarding the
build out of any previous BUFFALO WILD WINGS restaurant, you must
retain the services of a company specialized in assisting restaurant
operators during the construction process to assist you in submitting,
processing, monitoring and obtaining in a timely manner all necessary
construction documents, licenses and permits and to advise you
throughout the construction of your Restaurant). It is your
responsibility to comply with the foregoing conditions.
If this is not your first BUFFALO WILD WINGS restaurant and
you have opened all others on a timely basis, you may request that we
approve a general contractor that is not on our current list of
approved suppliers. You must pay us a $5,000 processing fee to process
your request to qualify the general contractor. You, your affiliates or
your Principal Owners, or any person related to, or any entity
controlled by your Principal Owners may not be your general contractor
unless you have requested our approval, you have paid the $5,000
qualification processing fee, and we have approved your request. If you
have signed an Area Development Agreement for 8 or more restaurants,
you also may request approval of an architect that is not on our list
of approved suppliers. The architect will be required to attend a two
day training session at our Minneapolis headquarters, at a cost of
$7,500.
If you want to use an audio/visual equipment
provider/installer who is not on our list of approved suppliers
(whether it is for your first or any subsequent restaurant), you must
pay us or our designated third party $250 for any audio/visual
equipment provider/installer that you submit for our qualification. You
also must pay a bid review fee of $150 and a final inspection fee of
$500 for audio/visual related services (in addition to travel expenses
of the inspector), regardless of whether you use a newly approved or
previously approved audio/visual provider and installer. Your general
contractor may not be your audio/visual equipment provider and
installer.
Any change to the building plans or any replacement,
reconstruction, addition or modification in the building, interior or
exterior decor or image, equipment or signage of the Restaurant to be
made after our consent is granted for initial plans, whether at the
request of you or of us, must be made in accordance with specifications
that have received our prior written consent. You may not commence such
replacement, reconstruction, addition or modification until you have
received our written consent to your revised plans.
You must begin substantial construction (site work, utility
infrastructure and building erection) of the Restaurant at least 150
days before the deadline to open the Restaurant if the Restaurant will
be in a free standing location or at least 120 days before the deadline
to open the Restaurant if the Restaurant will be in a non-free standing
location. You must provide us weekly development and construction
reports in the form we designate from the date you begin development
until the date you open the Restaurant. For instance, you must contact
us weekly and provide checklists and digital photos during
construction. In addition, on or before the deadlines to start
construction you must submit to us executed copies of any loan
documents and any other document that proves that you have secured
adequate financing to complete the construction of the Restaurant by
the date you are obligated to have the Restaurant open and in
operation. In the event that you fail to begin construction or to
secure financing pursuant to this paragraph, we will have the right to
terminate this Agreement without opportunity to cure pursuant to
subparagraph 13.B.2.
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C. Maintenance. The building, equipment, fixtures,
furnishings, signage and trade dress (including the interior and
exterior appearance) employed in the operation of your Restaurant must
be maintained and refreshed in accordance with our requirements
established periodically and any of our reasonable schedules prepared
based upon periodic evaluations of the premises by our representatives.
Within a period of 30-45 days (as we determine depending on the work
needed) after the receipt of any particular report prepared following
such an evaluation, you must effect the items of maintenance we
designate, including the repair of defective items and/or the
replacement of irreparable or obsolete items of equipment and interior
signage. If, however, any condition presents a threat to customers or
public health or safety, you must effect the items of maintenance
immediately, as further described in subparagraph 6.G. The items of
maintenance generally result from common wear and tear over a period of
time, accidents or lack of care. Examples include, but are not limited
to, repairing or replacing HVAC equipment, plumbing and electrical
systems that are not functioning properly; repairing a leaking roof;
repairing or replacing broken operational and audio-visual equipment;
refreshing general appearance items such as paint (interior and
exterior) and landscaping; replacing worn carpet, furniture and other
furnishings; and conducting routine maintenance of areas that affect
the appearance of the Restaurant and goodwill of the Trademarks such as
the appearance of the outdoor signage, the parking lot and dumpster
area. Items of maintenance will not be considered items of
modernization or replacement under subparagraph 5.E and, therefore, any
expenses for maintenance will not be counted towards the Maximum
Modernization Amount that you are required to spend pursuant to
subparagraph 5.E.
D. Relocation. If you need to relocate because of
condemnation, destruction, or expiration or cancellation of your lease
for reasons other than your breach, we will grant you authority to do
so at a site acceptable to us that is within your Designated Area;
provided that (i) the new site has been evaluated by the proprietary
site evaluator software that has been developed by GeoVue, Inc. (or by
the proprietary site evaluation system then being used by us) and you
have paid the $400 evaluation fee, provided, that you must purchase the
rights to have at least 3 sites evaluated unless we determine your
trade area does not require 3 evaluations; (ii) we have consented in
writing to the new site; (iii) the new Restaurant is under construction
within 90 days after you discontinue operation of the Restaurant at the
Authorized Location; and (iv) the new Restaurant is open and operating
within 270 days after construction commences, all in accordance with
our then-current standards. If you voluntarily decide to relocate the
Restaurant, your right to relocate the Restaurant will be void and your
interest in this Agreement will be voluntarily abandoned, unless you
have given us notice of your intent to relocate not less than 60 days
prior to closing the Restaurant, have procured a site that has been
evaluated by the proprietary site evaluator software that has been
developed by GeoVue, Inc. (or by the proprietary site evaluation system
then being used by us) and accepted by us within 60 days after closing
the prior Restaurant, have opened the new Restaurant for business
within 180 days of such closure and complied with any other conditions
that we reasonably require. You must pay the costs of any relocation,
and we reserve the right to charge you for any reasonable costs that we
incur.
In the event your Restaurant is destroyed or damaged and you
repair the Restaurant at the Authorized Location (rather than relocate
the Restaurant), you must repair and reopen the Restaurant at the
Authorized Location in accordance with our then-current standards for
the destroyed or damaged area within 270 days of the date of occurrence
of the destruction or damage.
You do not have the right to relocate in the event you lose
the right to occupy the Restaurant premises because of the cancellation
of your lease due to your breach. The termination or cancellation of
your lease due to your breach is grounds for immediate termination
under subparagraph 13.B.2.
E. Modernization or Replacement. From time to time as we
require, you must effect items of modernization and/or replacement of
the building, premises, trade dress, equipment and grounds as may be
necessary for your Restaurant to conform to the standards for similarly
situated new BUFFALO WILD WINGS restaurants. The maximum cumulative
amount (the "Maximum Modernization Amount") that you will be required
to spend during the initial term of this Agreement depends on whether
your Restaurant is a free standing location and is established as
follows:
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(i) Free Standing Locations (a single use,
single tenant, unattached building or pad site). You will be
required to spend no more than $185,000 during the initial 10
years of this Agreement and $50,000 during years 11-15. If we
do not require you to spend $185,000 during the first 10 years
of the Agreement, we may require you to spend the remaining
amount, in addition to the $50,000, during years 11-15. If we
do not require you to spend $235,000 during the first 15 years
of this Agreement, we may require you to spend the remaining
amount up to $235,000 during years 16-20.
(ii) Non-Free Standing Locations. You will
be required to spend no more than $155,000 during the initial
10 years of this Agreement and $25,000 during years 11-15. If
we do not require you to spend $155,000 during the first 10
years of the Agreement, we may require you to spend the
remaining amount, in addition to the $25,000, during years
11-15. If we do not require you to spend $180,000 during the
first 15 years of this Agreement, we may require you to spend
the remaining amount up to $180,000 during years 16-20.
Notwithstanding the prior paragraphs, we will not require you
to make any modernization expenditures during the first three years of
this Agreement. Thereafter, however, you must complete to our
satisfaction any changes we require within 24 months from the date you
are notified of any required changes, except for outdoor signage as set
forth in subparagraph 5.F.
Each and every transfer of any interest in this Agreement or
your business governed by Paragraph 11 or renewal covered by Paragraph
4 is expressly conditioned upon your compliance with these requirements
at the time of transfer or renewal without regard to the Maximum
Modernization Amount.
The Maximum Modernization Amount will be adjusted every 5-year
period in accordance with any change in the National Consumer Price
Index - All Urban Consumers for the recently completed 5-year period,
as described in subparagraph 16.Q. The Maximum Modernization Amount
does not include any required expenditures for equipment or leasehold
improvements necessary to prepare new product offerings. Furthermore,
you must perform general, continued maintenance and refreshing of the
Restaurant premises whenever necessary as set forth in subparagraph 5.C
and at a cost not included in the Maximum Modernization Amount.
You acknowledge and agree that the requirements of this
subparagraph 5.E are both reasonable and necessary to ensure continued
public acceptance and patronage of BUFFALO WILD WINGS restaurants and
to avoid deterioration or obsolescence in connection with the operation
of the Restaurant. If you fail to make any improvement as required by
this subparagraph or perform the maintenance described in subparagraph
5.C, we may, in addition to our other rights in this Agreement, effect
such improvement or maintenance and you must reimburse us for the costs
we incur.
F. Signage. The outdoor signage at your Restaurant must comply
with our then current specifications, which we may modify and change
from time to time due to modifications to the System, including changes
to the Trademarks. You must make such changes to the outdoor signage as
we require. We will pay for 1/3 of the cost to replace your outdoor
signage if: (i) your Restaurant's sign is less than 2 years old and
(ii) we require that you replace the sign within one year from the date
of notification. In any case, your failure to replace the signage
within 15 months from the date of notification will constitute a
default of this Agreement under Paragraph 13. Any upgrades to the type
or size of your outdoor signage will be at your expense. Your costs for
the signage will be included in the Maximum Modernization Amount under
subparagraph 5.E.
PRODUCTS AND OPERATIONS STANDARDS AND REQUIREMENTS
6. You must implement and abide by our requirements and
recommendations directed to enhancing substantial System uniformity. The
following provisions control with respect to products and operations:
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A. Authorized Menu. Your business must be confined to the
preparation and sale of only such Menu Items and other food and
beverage products as we designate and approve in writing from time to
time for sale by your Restaurant. You must offer for sale from the
Restaurant all items and only those items listed as Menu Items and
other approved food and beverage products. You must offer the full
Authorized Menu during all hours of operation, although you may offer a
limited selection of food Menu Items during the last hour if your
Restaurant is open past midnight and in excess of 12 hours during a
day. We have the right to make modifications to these items from time
to time, and you agree to comply with any modifications. You may not
offer or sell any other product or service at the Authorized Location
without our prior written consent.
B. Authorized Products and Ingredients. You must use in the
operation of the Restaurant and in the preparation of Menu Items and
other food and beverage products only the proprietary sauces and mixes
and other proprietary and non-proprietary ingredients, recipes,
formulas, cooking techniques and processes and supplies, and must
prepare and serve Menu Items and products in such portions, sizes,
appearance, taste and packaging, all as we specify in our most current
product preparation materials or otherwise in writing. We will supply
to you a copy of the current product preparation materials prior to
opening the Restaurant. You acknowledge and agree that we may change
these periodically and that you are obligated to conform to the
requirements. All supplies, including containers, cups, plates,
wrapping, eating utensils, and napkins, and all other customer service
materials of all descriptions and types must meet our standards of
uniformity and quality. You acknowledge that the Restaurant must at all
times maintain an inventory of ingredients, food and beverage products
and other products, material and supplies that will permit operation of
the Restaurant at maximum capacity.
C. Approved Supplies and Suppliers. We will furnish to you
from time to time lists of approved supplies or approved suppliers. You
must only use approved products, services, inventory, equipment,
fixtures, furnishings, signs, advertising materials, trademarked items
and novelties, and other items or services (collectively, "approved
supplies") in connection with the design, construction and operation of
the Restaurant as set forth in the approved supplies and approved
suppliers lists, as we may amend from time to time. Although we do not
do so for every item, we have the right to approve the manufacturer,
distributor and/or supplier of approved supplies and in some instances,
require that you use designated sources or suppliers. Along with a
number of other approval criteria, to be an approved supplier, the
supplier must have the ability to provide the product and/or service,
on a national basis, to at least 80% of the then existing Restaurants.
You acknowledge and agree that certain approved supplies may only be
available from one source, and we or our affiliates may be that source.
All inventory, products, materials and other items and supplies used in
the operation of the Restaurant that are not included in the approved
supplies or approved suppliers lists must conform to the specifications
and standards we establish from time to time. ALTHOUGH APPROVED OR
DESIGNATED BY US, WE AND OUR AFFILIATES MAKE NO WARRANTY AND EXPRESSLY
DISCLAIM ALL WARRANTIES, INCLUDING WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR ANY PARTICULAR PURPOSE, WITH RESPECT TO SERVICES, PRODUCTS,
EQUIPMENT (INCLUDING, WITHOUT LIMITATION, ANY REQUIRED COMPUTER
SYSTEMS), SUPPLIES, FIXTURES, FURNISHINGS OR OTHER APPROVED ITEMS. IN
ADDITION, WE DISCLAIM ANY LIABILITY ARISING OUT OF OR IN CONNECTION
WITH THE SERVICES RENDERED OR PRODUCTS FURNISHED BY ANY SUPPLIER
APPROVED OR DESIGNATED BY US. OUR APPROVAL OR CONSENT TO ANY SERVICES,
GOODS, SUPPLIERS, OR ANY OTHER INDIVIDUAL, ENTITY OR ANY ITEM SHALL NOT
CREATE ANY LIABILITY TO US.
D. Computer System. You must purchase and use any computer
system that we develop or select for the Restaurant, including all
future updates, supplements and modifications (the "Computer System").
Any updates, supplements or modifications are not subject to or part of
the Maximum Modernization Amount defined in subparagraph 5.E. The
Computer System may include all hardware and software used in the
operation of the Restaurant, including electronic point-of-sale cash
registers and back office programs used to record, analyze and report
sales, labor, inventory and tax information. The computer software
package developed for use in the Restaurant may include proprietary
software. You may be required to license the proprietary software from
us, an affiliate or a third party and you also may be required to pay a
software licensing or user fee in connection with your use of the
proprietary software. All right, title and interest in the software
will remain with the licensor of the software. The computer hardware
component of the Computer System must conform to specifications we
develop. We reserve the right to designate a single source from whom
you must purchase the Computer System. You acknowledge and agree that
we will have full and complete access to information and data entered
and produced by the Computer System. You must, at all times, have at
the Authorized Location internet access with a form of high speed
connection as we require and you must maintain: (i) an email account
for our direct correspondence with the Control Person; and (ii) a
separate email account for the Restaurant.
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E. Serving and Promotional Items. All sales promotion
material, customer goodwill items, cartons, containers, wrappers and
paper goods, eating and serving utensils and other items, and customer
convenience items used in the sales promotion, sale and distribution of
products covered by this Agreement are subject to our approval and
must, where practicable, contain one or more of the Trademarks. We may
require you to carry and offer for sale in the Restaurant a
representative supply of approved trademarked clothing and other
novelty items, including special promotional items that we develop and
market from time to time.
F. Health and Sanitation. Your Restaurant must be operated and
maintained at all times in compliance with any and all applicable
health and sanitary standards prescribed by governmental authority. You
also must comply with any standards that we prescribe. In addition to
complying with such standards, if the Restaurant is subject to any
sanitary or health inspection by any governmental authorities under
which it may be rated in one or more than one classification, it must
be maintained and operated so as to be rated in the highest available
health and sanitary classification with respect to each governmental
agency inspecting the same. In the event you fail to be rated in the
highest classification or receive any notice that you are not in
compliance with all applicable health and sanitary standards, you must
immediately notify us of such failure or noncompliance.
G. Evaluations. We or our authorized representative have the
right to enter your Restaurant at all reasonable times during the
business day for the purpose of making periodic evaluations and to
ascertain if the provisions of this Agreement are being observed by
you, to inspect and evaluate your building, land and equipment, and to
test, sample, inspect and evaluate your supplies, ingredients and
products, as well as the storage, preparation and formulation and the
conditions of sanitation and cleanliness in the storage, production,
handling and serving. If we determine that any condition in the
Restaurant presents a threat to customers or public health or safety,
we may take whatever measures we deem necessary, including requiring
you to immediately close the Restaurant until the situation is remedied
to our satisfaction. Our inspections and evaluations may include a
"mystery shopper" program from time to time throughout the term of this
Agreement. We hire various vendors who send the "mystery shoppers" into
the BUFFALO WILD WINGS restaurants. If you fail an evaluation by us or
by a mystery shopper or if we receive a specific customer complaint,
you must pay for the mystery shopper(s) we send to your Restaurant
(until the issue is resolved to our satisfaction). The current fee
charged by the vendors is approximately $100 fee per visit, which you
must pay directly to the vendor. The fee per visit includes the
reimbursement of the tab paid by the mystery shopper for the items
consumed at your Restaurant and, therefore, the actual fee for each
visit will vary.
H. Period of Operation. Subject to any contrary requirements
of local law, your Restaurant must be opened to the public and operated
with the full Authorized Menu at least 12 hours each day of the year,
although you have the option to close your Restaurant, with prior
notification to us, 5 days per year, although never 2 consecutive days
(with the exception of Christmas Eve and Christmas Day). Any variance
from this provision must be authorized by us in writing. You
acknowledge and agree that if your Restaurant is closed for a period of
2 consecutive days or 5 or more days in any 12-month period without our
prior written consent, such closure constitutes your voluntary
abandonment of the franchise and business and we have the right, in
addition to other remedies provided for herein, to terminate this
Agreement. Acts of force majeure, as defined in subparagraph 16.M cause
preventing you temporarily from complying with the foregoing will
suspend compliance for the duration of such interference.
I. Operating Procedures. You must adopt and use as your
continuing operational routine the required standards, service style,
procedures, techniques and management systems described in our manuals
or other written materials relating to product preparation, menu,
storage, uniforms, financial management, equipment, facility and
sanitation. We will revise the manuals and these standards, procedures,
techniques and management systems periodically to meet changing
conditions of retail operation in the best interest of restaurants
operating under the Trademarks. Any required standards exist to protect
our interests in the System and the Trademarks and not for the purpose
of establishing any control or duty to take control over those matters
that are reserved to you. You must use your best efforts to promote and
increase the sales and service of Menu Items and to effect the widest
and best possible distribution throughout the Designated Area.
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You acknowledge having received one copy of the manuals on
loan from us for the term of this Agreement. You acknowledge and agree
that the manuals and other system communications may only be available
on the internet or other online or computer communications. The manuals
at all times are our sole property. You must at all times treat the
manuals, and the information they contain, as secret and confidential,
and must use all reasonable efforts to maintain such information as
secret and confidential. We may from time to time revise the contents
of the manuals and you expressly agree to comply with each new or
changed requirement. You must at all times ensure that your copy of the
manuals are kept current and up to date, and in the event of any
dispute as to the contents of said manuals, the terms of the master
copy of the manuals that we maintain are controlling.
J. Confidential Information. You, the Principal Owners, the
Unit General Manager, your guarantors, officers, directors, members,
managers, partners, employees or agents, or any other individual or
entity related to, or controlled by, you may not, during the term of
this Agreement or thereafter, disclose, copy, reproduce, sell or use
any such information in any other business or in any manner not
specifically authorized or approved in advance in writing by us any
Confidential Information. For purposes of this Agreement, "Confidential
Information" means the whole or any portion of know-how, knowledge,
methods, specifications, processes, procedures and/or improvements
regarding the business that is valuable and secret in the sense that it
is not generally known to our competitors and any proprietary
information contained in the manuals or otherwise communicated to you
in writing, verbally or through the internet or other online or
computer communications, and any other knowledge or know-how concerning
the methods of operation of the Restaurant, as well as the content of
this Agreement and any other document executed in connection with this
Agreement. Any and all Confidential Information, including, without
limitation, proprietary ingredients, sauces and mixes, secret formulas
and recipes, methods, procedures, suggested pricing, specifications,
processes, materials, techniques and other data, may not be used for
any purpose other than operating the Restaurant. We may require that
you obtain nondisclosure and confidentiality agreements in a form
satisfactory to us from any persons owning a minority interest in the
franchisee, the Principal Owners, the Unit General Manager and other
key employees. You must provide executed copies of these agreements to
us upon our request. Notwithstanding the foregoing, you are authorized
to disclose the terms of this Agreement to any lender providing you
financing for the Restaurant as well as to your landlord.
K. Vending Services. If you install or maintain on the
premises any newspaper racks, video games, jukeboxes, gum machines,
games, rides, vending machines, or other similar devices that do not
meet with our approval, you must remove them within 3 days from
receiving written notice from us. Pool tables, cigarette vending
machines, gambling and gaming machines or games of chance are not
allowed. Any income from vending services in the Restaurant or on its
premises, regardless of which person or entity collects the money, and
regardless of whether we authorized you to install them, must be
included in Gross Sales for purposes of your Royalty Fee and
Advertising Fee. Upon our written approval, the money derived from
services provided by charitable organizations or services that are for
customer convenience, such as pay phones or cash machines, will not be
included in Gross Sales.
L. Catering and Delivery Services. If you want to offer
catering or delivery service to customers, you must obtain our prior
written approval, which we will not withhold unreasonably, although we
reserve the right to require you to offer catering service to customers
located within the Designated Area. Any catering or delivery services
must meet our written standards. You also must charge the same price
for products offered by the Restaurant whether delivered or catered by
or sold in the Restaurant. Any income from catering or delivery
services must be included in Gross Sales for purposes of your Royalty
Fee and Advertising Fee.
M. Compliance with Law; Licenses and Permits. You must at all
times maintain your premises and conduct your Restaurant operations in
compliance with all applicable laws, regulations, codes and ordinances.
You must secure and maintain in force all required licenses, including
a liquor license that permits alcohol sales 7 days a week (full liquor
Monday through Saturday and either full liquor or at least beer only on
Sundays), permits and certificates relating to your Restaurant. If your
Restaurant is open and operating and a change occurs in applicable
state or local law that does not permit liquor sales on Sundays, it
will not be deemed a breach of this Agreement. In the event your liquor
license is suspended or revoked, in addition to our right to terminate
this Agreement pursuant to subparagraph 13.B, we reserve the right to
charge you the Royalty Fee on the Gross Sales you would have received
on the lost liquor sales during the license suspension. We will
estimate the Gross Sales based on the prior year's Gross Sales for the
suspension period.
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You acknowledge that you are an independent business and
responsible for control and management of your Restaurant, including,
but not limited to, the hiring and discharging of your employees and
setting and paying wages and benefits of your employees. You
acknowledge that we have no power, responsibility or liability in
respect to the hiring, discharging, setting and paying of wages or
related matters.
You must immediately notify us in writing of any claim,
litigation or proceeding that arises from or affects the operation or
financial condition of your BUFFALO WILD WINGS business or Restaurant,
including any notices of health code violations or liquor license
violations.
N. Participation in Internet Web Sites or Other Online
Communications. You must, at your expense, participate in our BUFFALO
WILD WINGS web site on the internet, our intranet system or other
online communications as we may require. For instance, you must submit
to us daily reports via our intranet system, as further described in
subparagraph 9.H. We have the right to determine the content and use of
our web site and intranet system and will establish the rules under
which franchisees may or must participate. You may not separately
register any domain name containing any of the Trademarks nor
participate in any web site that markets goods and services similar to
a BUFFALO WILD WINGS restaurant. We retain all rights relating to our
web site and intranet system and may alter or terminate our web site or
intranet system. Your general conduct on our web site and intranet
system or other online communications and specifically your use of the
Trademarks or any advertising is subject to the provisions of this
Agreement. You acknowledge that certain information related to your
participation in our web site or intranet system may be considered
Confidential Information, including access codes and identification
codes. Your right to participate in our web site and intranet system,
or otherwise use the Trademarks or System on the internet or other
online communications, will terminate when this Agreement expires or
terminates.
O. System Modifications. You acknowledge and agree that we
have the right to modify, add to or rescind any requirement, standard
or specification that we prescribe under this Agreement to adapt the
System to changing conditions competitive circumstances, business
strategies, business practices and technological innovations and other
changes as we deem appropriate. You must comply with these
modifications, additions or rescissions at your expense, subject to the
requirements of subparagraph 5.E and any other express limitations set
forth in this Agreement.
P. Suggested Pricing Policies. We may, from time to time, make
suggestions to you with regard to your pricing policies.
Notwithstanding any suggestions, you have the sole and exclusive right
as to the minimum prices you charge for the services offered at the
Restaurant. We retain the right to establish maximum prices to be
charged by you for sales promotions, subject to subparagraph 8.F, or
otherwise. Any list or schedule of prices we furnish to you may, unless
otherwise specifically stated as to the maximum price, be treated as a
recommendation only and failure to accept or implement any such
suggestion will not in any way affect the relationship between you and
us.
PERSONNEL AND SUPERVISION STANDARDS
7. The following provisions and conditions control with respect to
personnel, training and supervision:
A. Supervision. You must have a Control Person and a Unit
General Manager that meet our standards and qualifications at all times
during the term of this Agreement. Your Control Person and Unit General
Manager must attend and successfully complete all required training, as
set forth in subparagraphs 7.B - E. Should any actions (or inactions)
of your Control Person or Unit General Manager cause the individual to
fail to meet our standards and qualifications or should the action (or
inaction) bring or tend to bring any of the Trademarks into disrepute
or impair or tend to impair your or your Restaurant's reputation or the
goodwill of the Trademarks, your Restaurant or the BUFFALO WILD WINGS
system, we have the right to require that you replace the Control
Person or Unit General Manager with an individual who meets our
standards and qualifications within 30 days. Any new Control Person or
Unit General Manager must attend and successfully complete our training
requirements immediately after being appointed by you. The Control
Person and Unit General Manager must ensure that the Restaurant is
operated in accordance with the terms and conditions of this Agreement,
although this in no way relieves you of your responsibilities to do so.
Your Control Person also must be readily and continuously available to
us. In addition to the Control Person and your Unit General Manager,
you must have at least two assistant managers at all times during the
term of this Agreement.
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B. Training. You must, at your expense, comply with all of the
training requirements we prescribe for the Restaurant to be developed
under this Agreement. The Control Person, the Unit General Manager and
at least one of your assistant managers must attend training and
complete training to our satisfaction (such that at all times you have
3 trained managers for your Restaurant). All replacement managers must
complete training to our satisfaction, and must begin training within 6
weeks of the time of hire. The training requirements may vary depending
on our assessment of the experience of the Control Person, the Unit
General Manager and the assistant managers or other factors specific to
the Restaurant. In the event you are given notice of default as set
forth in subparagraphs 13.A and B and the default relates, in whole or
in part, to your failure to meet any operational standards, we have the
right to require as a condition of curing the default that you, the
Control Person, the Unit General Manager and the assistant managers, at
your expense, comply with the additional training requirements we
prescribe. Any new Control Person or Unit General Manager must comply
with our training requirements. Under no circumstances may you permit
management of the Restaurant's operations by a person who has not
successfully completed to our reasonable satisfaction all applicable
training we require.
C. Ongoing Training. We may require the Control Person, the
Unit General Manager, the assistant managers and other key employees of
the Restaurant to attend, at your expense, ongoing training at our
training facility, the Authorized Location or other location we
designate. In addition, we may develop and require you to purchase an
in-restaurant training program.
D. Staffing. You will employ a sufficient number of competent
and trained employees to ensure efficient service to your customers.
You must require all your employees to work in clean uniforms approved
by us, but furnished at your cost or the employees' cost as you may
determine. No employee of yours will be deemed to be an employee of
ours for any purpose whatsoever.
E. Attendance at Meetings. You and the Control Person must
attend, at your expense, all annual franchise conventions we may hold
or sponsor and all meetings relating to new products or product
preparation procedures, new operational procedures or programs,
training, restaurant management, sales or sales promotion, or similar
topics. If you or the Control Person are not able to attend a meeting
or convention, you must notify us prior to the meeting and must have a
substitute person acceptable to us attend the meeting. In addition,
your Unit General Manager(s) must attend the annual training meeting
for Unit General Managers that we may hold or sponsor, at your own
expense. We reserve the right to require that you and/or your Control
Person attend any additional meetings that we deem appropriate under
special circumstances, provided however, that we will not require more
than one additional meeting every year and we will give you written
notice of any such meeting at least 10 days prior to the meeting.
ADVERTISING
8. You agree to actively promote your Restaurant, to abide by all of
our advertising requirements and to comply with the following provisions:
A. Advertising Fund. You must pay to us an Advertising Fee as
set forth in subparagraph 9.C. All Advertising Fees will be placed in
an Advertising Fund that we own and manage. On behalf of our company
and affiliate owned restaurants (except for "Special Sites"), we will
pay the same Advertising Fee as similarly situated franchised
restaurants (based on age and type of location) in the same local
marketing area. The Advertising Fund is not a trust or escrow account,
and we have no fiduciary obligation to franchisees with respect to the
Advertising Fund; provided, however, we will make a good faith effort
to expend such fees in a manner that we determine is in the general
best interests of the System. We have the right to determine the
expenditures of the amounts collected and the methods of marketing,
advertising, media employed and contents, terms and conditions of
marketing campaigns and promotional programs. Because of the methods
used, we are not required to spend a prorated amount on each restaurant
or in each advertising market. We have the right to make disbursements
from the Advertising Fund for expenses incurred in connection with the
cost of formulating, developing and implementing marketing, advertising
and promotional campaigns. The disbursements may include payments to us
for the expense of administering the Advertising Fund, including
accounting expenses and salaries and benefits paid to our employees
engaged in the advertising functions. If requested, we will provide you
an annual unaudited statement of the financial condition of the
Advertising Fund.
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B. Required Local Expenditures. You must use your best efforts
to promote and advertise the Restaurant and participate in any local
marketing and promotional programs we establish from time to time. In
addition to the Advertising Fee, you are required to spend 1/2% of your
Gross Sales on approved local marketing and promotion. Upon our
request, you must provide us with itemization and proof of marketing
and an accounting of the monies that you have spent for approved local
marketing. If you fail to make the required expenditure, we have the
right to collect and contribute the deficiency to the Advertising Fund.
C. Approved Materials. You must use only such advertising
materials (including any print, radio, television, electronic, or other
media forms that may become available in the future) as we furnish,
approve or make available, and the materials must be used only in a
manner that we prescribe. Furthermore, any promotional activities you
conduct in the Restaurant or on its premises are subject to our
approval. We will not unreasonably withhold approval of any sales
promotion materials or media and activities; provided that they are
current, in good condition, in good taste and accurately depict the
Trademarks. Any point-of-sale posters or other promotional materials
used by you must be current and in good condition. We may make
available at a reasonable cost to you annually or at other reasonable
intervals, a sales promotion kit containing new (or replacement)
point-of-sale and other promotional materials.
D. Advertising Cooperatives. We have the right to designate
local advertising markets and if designated, you must participate in
and contribute to the cooperative advertising and marketing programs in
your designated local advertising market. If established, you must
contribute the 1/2% of Gross Sales you are required to spend on local
marketing and promotion to the local cooperative. If, however, the
cooperative votes to spend a percentage greater than 1/2% per location,
you must contribute such amount. Each BUFFALO WILD WINGS restaurant,
including those operated by us, our parent company or our affiliates
(except Special Sites) within a designated local advertising area is a
member of the local advertising cooperative and each restaurant has one
vote on all matters requiring a vote. Each advertising cooperative will
be required to adopt governing bylaws that meet our approval. We will
provide each advertising cooperative with a sample form of bylaws,
containing certain terms and conditions that we require, although the
bylaws can not modify the voting structure set forth in this paragraph.
You will be required to contribute to the cooperative the percentage as
designated by a majority vote of the cooperative members. We reserve
the right to administer the advertising cooperatives' funds and require
payment from its members via electronic funds transfer. The
contribution amount designated by the cooperative must be on a
percentage of Gross Sales basis and per Restaurant, and must be at
least 1/2%. The members of each cooperative and their elected officers
will be responsible for the administration of the advertising
cooperative. Each advertising cooperative must engage the services of a
professional advertising agency or media buyer that meets with our
approval and has expertise in the industry and in the particular
market. Further, you must obtain our written approval of all
promotional and advertising materials, creative execution and media
schedules prior to their implementation. Each advertising cooperative
will be required to prepare annual financial statements, which must be
made available to all members of the cooperative and to us upon
request. Also, each advertising cooperative must submit to us its
meeting minutes upon our request. We have the right to require
advertising cooperatives to be formed, changed, dissolved or merged.
E. Telephone Directory Listing. You must place a separate
listing, or participate in a joint listing, in the primary yellow page
directory serving the geographic area in which your Restaurant is
located. The listing must contain such copy and proper use of the
Trademarks as we specify. The cost of the listing must be paid by you
or, in the case of a joint listing, by you and other participating
BUFFALO WILD WINGS restaurants. Your cost to advertise in the yellow
pages as we direct will be included as part of your local advertising
requirements under subparagraph 8.B. We will not specify an
unreasonably expensive listing; we may, however, require you to
advertise in more than one local telephone directory.
F. Participation in Certain Programs and Promotions. You must
participate in all required advertising and promotional programs we
establish. If the promotional program involves alcohol, or any Menu
Item that is listed on the then current BUFFALO WILD WINGS printed menu
(excluding any inserts), we may suggest, but will not require, that you
offer the item at a price lower than the every day menu price. You must
use and honor only system-wide gift cards, certificates and checks that
we designate and you must obtain all certificates, cards or checks from
an approved supplier. We have developed a gift card program and require
that you sign the Participation Agreement attached as Appendix E. At
the time of termination or expiration, or the transfer of your rights
under this Agreement, you must pay all amounts owed by you under the
Participation Agreement, including those amounts from purchased, but
unredeemed, gift cards.
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G. New Restaurant Opening Promotion. You must conduct certain
advertising and public relations activities in connection with the
opening of your Restaurant. We require you to spend, in addition to the
required local advertising contribution described above, $12,500 for
such opening activities, which must be spent within the 45 days prior
or 45 days following the opening of your Restaurant, unless otherwise
approved by us. In addition, you must perform opening advertising and
promotions as required by this paragraph every time that you (i)
relocate the Restaurant or (ii) reopen the Restaurant after having it
closed for 30 days or more. Upon our request, you must provide to us
proof of these expenditures. We have the right, but not the obligation,
to collect and administer these funds on your behalf.
FEES, REPORTING AND AUDIT RIGHTS
9. You must pay the fees described below and comply with the following
provisions:
A. Initial Franchise Fee. You must pay to us a nonrefundable
Initial Franchise Fee of $________. The Initial Franchise Fee, payable
in full on the date you sign this Agreement, is earned upon receipt and
is in consideration for our expenses incurred and services rendered in
granting you the franchise rights.
B. Royalty Fee. In addition to the Initial Franchise Fee,
during the full term of this Agreement and in consideration of the
rights granted to you, you must pay to us as a weekly Royalty Fee. The
Royalty Fee for the first half of the initial term of this Agreement
shall be an amount equal to 5% of Gross Sales. The Royalty Fee for the
second half of the initial term of this Agreement shall be an amount
equal to the greater of (i) 5% of Gross Sales or (ii) the Royalty Fee
being charged by us under our form of franchise agreement being used by
us at any time during the second half of the initial term of the
Agreement (or, if no form of franchise agreement is being used by us on
such date, the Royalty Fee being charged by us under our latest form of
franchise agreement), provided that the Royalty Fee may not be
increased by more than 1/2% at any time during the initial term of the
Agreement. The amount of the Royalty Fee for any renewal term shall be
that provided in the franchise agreement executed for such renewal
term.
C. Advertising Fee. You must pay to us a weekly Advertising
Fee in an amount equal to 3% of Gross Sales. We reserve the right to
increase this percentage upon 60 days written notice to you, provided,
however, that we may not increase the Advertising Fee by more than 1/2%
per year and that the Advertising Fee will not exceed 4% for the
initial term of this Agreement. These fees are not held by us in trust
and become our property to be spent in accordance with Paragraph 8 of
this Agreement.
D. Computations and Remittances. Except for the Initial
Franchise Fee, you must compute all amounts due and owing at the end of
each week's operation and remittance for the amounts must be made to us
on or before Friday of the following week, accompanied by the reports
required by subparagraph 9.H of this Agreement. We reserve the right to
change the reporting day of the week for any or all amounts. You must
certify the computation of the amounts in the manner and form we
specify, and you must supply to us any supporting or supplementary
materials as we reasonably require to verify the accuracy of
remittances. You waive any and all existing and future claims and
offsets against any amounts due under this Agreement, which amounts you
must pay when due. We have the right to apply or cause to be applied
against amounts due to us or any of our affiliates any amounts that we
or our affiliates may hold from time to time on your behalf or that we
or our affiliates owe to you. Further, if you are delinquent in the
payment of any amounts owed to us, we have the right to require you to
prepay estimated Royalty Fees and Advertising Fees.
E. Electronic Transfer of Funds. You must sign an electronic
transfer of funds authorization, attached as Appendix D, to authorize
and direct your bank or financial institution to transfer
electronically, on a weekly basis, directly to our account or our
affiliates' and to charge to your account all amounts due to us or our
affiliates. You must maintain a balance in your account sufficient to
allow us and our affiliates to collect the amounts owed when due. You
are responsible for any penalties, fines or other similar expenses
associated with the transfer of funds described in this subparagraph.
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F. Interest Charges; Late Fees. Any and all amounts that you
owe to us or to our affiliates will bear interest at the rate of 18%
per annum or the maximum contract rate of interest permitted by
governing law, whichever is less, from and after the date of accrual.
In addition to interest charges on late Royalty Fee and Advertising Fee
payments, you must pay to us a service charge of $150 for each
delinquent report or payment that you owe to us under this Agreement. A
payment is delinquent for any of the following reasons: (i) we do not
receive the payment on or before the date due; or (ii) there are
insufficient funds in your bank account to collect the total payment by
a transfer of funds on or after the date due. The service charge is not
interest or a penalty, it is only to compensate us for increased
administrative and management costs due to late payment.
G. Financial Planning and Management. You must record daily
all sales on a cash register tape or similar device. You must keep
books and records and submit reports as we periodically require,
including but not limited to a monthly profit plan, monthly balance
sheet and monthly statement of profit and loss, records of prices and
special sales, check registers, purchase records, invoices, sales
summaries and inventories, sales tax records and returns, payroll
records, cash disbursement journals and general ledger, all of which
accurately reflect the operations and condition of your Restaurant
operations. You must compile, keep and submit to us the books, records
and reports on the forms and using the methods of bookkeeping and
accounting as we periodically may prescribe. The records that you are
required to keep for your Restaurant must include detailed daily sales,
cost of sales, and other relevant records or information maintained in
an electronic media format and methodology we approve. You must provide
this information to us according to reporting formats, methodologies
and time schedules that we establish from time to time. You also must
preserve and retain the books, records and reports for not less than 36
months. You must allow us electronic and manual access to any and all
records relating to your Restaurant.
H. Reports and Audit. You must submit your Gross Sales daily
via our intranet system. You must verify the accuracy of the Gross
Sales figure by Tuesday at midnight of each week for the preceding
week. Within 10 days after the end of each month, you must submit to us
a report with respect to the preceding calendar month in the form and
content as we periodically prescribe. The report must include, but not
be limited to, the following information for the preceding month: (i)
amount of Gross Sales and gross receipts of the Restaurant, amount of
sales tax and the computation of the Royalty Fee and the Advertising
Fee; (ii) quantities of products purchased and the sources from which
each were obtained; (iii) if we request, copies of your most recent
sales tax return, monthly sales summary and monthly balance sheet and
statement of profit and loss, including a summary of your costs for
utilities, labor, rent and other material cost items (iv) if requested
by us to verify your Gross Sales, all such books and records as we may
require under our audit policies published from time to time. You also
must, at your expense, submit to us within 90 days after the end of
each fiscal year a detailed balance sheet, profit and loss statement
and statement of cash flows for such fiscal year, prepared on an
accrual basis including all adjustments necessary for fair presentation
of the financial statements. We may require that the annual financial
statements be reviewed by a certified public accountant. You must
certify all reports to be true and correct. You acknowledge and agree
that we have the right to impose these requirements on you regardless
of whether we impose the same requirement on our other franchisees.
We or our authorized representative have the right at all
times during the business day to enter the premises where your books
and records relative to the Restaurant are kept and to evaluate, copy
and audit such books and records. We also have the right to request
information from your suppliers and vendors. In the event that any such
evaluation or audit reveals any understatement of your Gross Sales,
Royalty Fees or Advertising Fees or a variance of 1.25% or more from
data reported to us in respect to any other item that is material to
the computation of fees or to the analysis of the operation, you must
pay for the audit, and in addition to any other rights we may have, we
have the right to conduct further periodic audits and evaluations of
your books and records as we reasonably deem necessary for up to 3
years thereafter and any further audits and evaluations will be at your
sole expense, including, without limitation, professional fees, travel,
and room and board expenses directly related thereto. Furthermore, if
you intentionally understate or underreport Gross Sales, Royalty Fees
or Advertising Fees at any time, or if a subsequent audit or evaluation
conducted within the 3-year period reveals any understatement of your
Gross Sales, Royalty Fees or Advertising Fees or a variance of 1.25% or
more from data reported to us in respect to any other item that is
material to the computation of fees or to the analysis of the
operation, in addition to any other remedies provided for in this
Agreement, at law or in equity, we have the right to terminate this
Agreement immediately. In order to verify the information that you
supply, we have the right to reconstruct your sales through the
inventory extension method or any other reasonable method of analyzing
and reconstructing sales. You agree to accept any such reconstruction
of sales unless you provide evidence in a form satisfactory to us of
your sales within a period of 14 days from the date of notice of
understatement or variance. You must fully cooperate with us or our
representative in performing these activities and any expenses incurred
by us from your lack of cooperation shall be reimbursed by you.
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We will keep your financial books, records and reports
confidential, unless the information is requested by tax authorities or
used as part of a legal proceeding or in a manner as set forth in
subparagraph 11.D.8 or where your information is grouped with similar
information from other restaurants to produce shared results like
high-low ranges or average gross sales or expenses on a system-wide or
regional basis.
YOUR OTHER OBLIGATIONS; NONCOMPETE COVENANTS
10. You agree to comply with the following terms and conditions:
A. Payment of Debts. You agree to pay promptly when due: (i)
all payments, obligations, assessments and taxes due and payable to us
and our affiliates, vendors, suppliers, lessors, federal, state or
local governments, or creditors in connection with your business; (ii)
all liens and encumbrances of every kind and character created or
placed upon or against any of the property used in connection with the
Restaurant or business; and (iii) all accounts and other indebtedness
of every kind incurred by you in the conduct of the Restaurant or
business. In the event you default in making any such payment, we are
authorized, but not required, to pay the same on your behalf and you
agree promptly to reimburse us on demand for any such payment.
B. Indemnification. You hereby waive all claims against us for
damages to property or injuries to persons arising out of the operation
of your Restaurant. You must fully protect, indemnify and hold us and
our owners, directors, officers, insurers, successors and assigns and
our affiliates harmless from and against any and all claims, demands,
damages and liabilities of any nature whatsoever arising in any manner,
directly or indirectly, out of or in connection with or incidental to
the operation of your Restaurant (regardless of cause or any concurrent
or contributing fault or negligence of us or our affiliates) or any
breach by you or your failure to comply with the terms and conditions
of this Agreement. We also reserve the right to select our own legal
counsel to represent our interests, and you must reimburse us for all
our costs and all attorneys' fees immediately upon our request as they
are incurred.
We hereby waive all claims against you for damages to property
or injuries to persons arising out of the operation of our company or
affiliate owned restaurants. We must fully protect, indemnify and
defend you and your affiliates and hold you and them harmless from and
against any and all claims, demands, damages and liabilities of any
nature whatsoever arising in any manner, directly or indirectly, out of
or in connection with or incidental to the operation of our company or
affiliate owned restaurants (regardless of cause or any concurrent or
contributing fault or negligence of you) or any breach by us or our
failure to comply with the terms and conditions of this Agreement.
C. Insurance. You must purchase and maintain in full force and
effect, at your expense and from a company we accept, insurance that
insures both you and us, our affiliates and any other persons we
designate by name. The insurance policies must include, at a minimum:
(i) special/causes of loss coverage forms (sometimes called "All Risk
coverage") on the Restaurant and all fixtures, equipment, supplies and
other property used in the operation of the Restaurant, for full repair
and replacement value of the machinery, equipment and improvements,
including full coverage for loss of income resulting from damage to the
Restaurant without any co-insurance clause, except that an appropriate
deductible clause is permitted; (ii) business interruption insurance
covering a minimum 12 months loss of income, including coverage for our
Royalty Fees; (iii) comprehensive general liability insurance,
including product liability insurance and contractual liability
insurance, with minimum limits of $1,000,000 per occurrence and
$2,000,000 aggregate; (iv) liquor liability coverage with minimum
limits of $1,000,000 per occurrence; (v) "Per Location" aggregate
limits when multiple restaurant locations are insured under one
comprehensive general liability policy and/or liquor liability
policy(ies); (vi) automobile liability insurance, including owned,
hired and non-owned vehicle coverage with a minimum combined single
limit of $1,000,000 per claim (vii) workers' compensation and
employer's liability insurance covering all of your employees (viii)
umbrella liability insurance, which also includes liquor liability,
employer's liability and automobile liability, with minimum limits of
$2,000,000 per occurrence; (ix) Buffalo Wild Wings, Inc., Buffalo Wild
Wings International, Inc. and affiliates (collectively, "BWW Entities")
as named additional insureds on all liability policies required by this
subparagraph; (x) severability of interests or separation of insureds
provisions must be included in the liability policies and all policies
must be primary and non-contributing with any insurance policy carried
by the BWW Entities; and (xi) any other such insurance coverages or
amounts as required by law or other agreement related to the
Restaurant. The insurance coverages referenced in (iii), (v), (vi),
(vii), (viii), (ix); (x) and (xi) of this subparagraph must commence as
of the date of this Agreement. The insurance coverages referenced in
(i) and (ii) of this subparagraph must commence as of the date
construction begins at the Restaurant. The liquor liability insurance
referenced in (iv) of this subparagraph must commence no later than the
date that liquor begins to arrive at the Restaurant site.
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You must deliver to us at commencement and thereafter annually
or at our request a proper certificate evidencing the existence of such
insurance coverage and your compliance with the provisions of this
subparagraph. The insurance certificate must show our status as an
additional insured (as noted in (ix) above) and provide that we will be
given 30 days' prior written notice of material change in or
termination or cancellation of the policy. We also may request copies
of all policies. We may from time to time modify the required minimum
limits (including a significant increase to the umbrella policy
referenced in (viii) above) and require additional insurance coverages,
by providing written notice to you, as conditions require, to reflect
changes in relevant circumstances, industry standards, experiences in
the BUFFALO WILD WINGS system, standards of liability and higher damage
awards. If you do not procure and maintain the insurance coverage
required by this Agreement (including any modifications referenced in
the preceding sentence), we have the right, but not the obligation, to
procure insurance coverage and to charge same to you, together with a
reasonable fee for the expenses we incur in doing so, payable by you
immediately upon notice.
D. Noncompete Covenants. You agree that you will receive
valuable training and Confidential Information that you otherwise would
not receive or have access to but for the rights licensed to you under
this Agreement. You therefore agree to the following noncompetition
covenants:
1. Unless otherwise specified, the term "you" as used
in this subparagraph 10.D includes, collectively and
individually, your Control Person, all Principal Owners,
guarantors, officers, directors, members, managers, partners,
as the case may be, and holders of any ownership interest in
you. We may require you to obtain from your Control Person and
other individuals identified in the preceding sentence a
signed non-compete agreement in a form satisfactory to us that
contains the non-compete provisions of this subparagraph 10.D.
2. You covenant that during the term of this
Agreement you will not, either directly or indirectly, for
yourself, or through, on behalf of, or in conjunction with any
person or entity, own, manage, operate, maintain, engage in,
consult with or have any interest in any restaurant or food
business other than one authorized by this Agreement or any
other agreement between us and you, except if, at the
Effective Date of this Agreement, you operate or hold an
interest in a restaurant or food business other than a casual
or fast casual restaurant. Under no circumstances may you be a
member of a franchisee advisory council, committee, board or
other similar group for a restaurant or food business, unless
you receive our prior written approval.
3. You covenant that you will not, for a period of 2
years after the expiration or termination of this Agreement,
regardless of the cause of termination, or within 2 years of
the sale of the Restaurant or any interest in you, either
directly or indirectly, for yourself, or through, on behalf
of, or in conjunction with any person or entity, own, manage,
operate, maintain, engage in, consult with or have any
interest in (i) a casual or fast casual restaurant that sells
or offers to dispense prepared food products the same as or
similar to the type sold in BUFFALO WILD WINGS restaurants;
(ii) a video entertainment oriented, casual or fast casual
restaurant or bar business; or (iii) any business
establishment that sells or offers to dispense prepared
chicken wings or legs:
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a. At the premises of the former Restaurant;
b. Within a 5-mile radius of the former
Restaurant; or
c. Within a 5-mile radius of the location of
any other business or restaurant using the BUFFALO
WILD WINGS System, whether franchised or owned by us
or our affiliates.
For purposes of this subparagraph, a video entertainment
oriented, casual or fast casual restaurant or bar is one with
more than two screens, or any screen larger than 21 inches,
available for the viewing of different events.
4. You agree that the length of time in subpart (3)
will be tolled for any period during which you are in breach
of the covenants or any other period during which we seek to
enforce this Agreement. The parties agree that each of the
foregoing covenants will be construed as independent of any
other covenant or provision of this Agreement.
TRANSFER OF FRANCHISE
11. You agree that the following provisions govern any transfer or
proposed transfer:
A. Transfers. We have entered into this Agreement with
specific reliance upon your financial qualifications, experience,
skills and managerial qualifications as being essential to the
satisfactory operation of the Restaurant. Consequently, neither your
interest in this Agreement nor in the Restaurant may be transferred or
assigned to or assumed by any other person or entity (the "assignee"),
in whole or in part, unless you have first tendered to us the right of
first refusal to acquire this Agreement in accordance with subparagraph
11.F, and, if we do not exercise such right, unless our prior written
consent is obtained, the transfer fee provided for in subparagraph 11.C
is paid, and the transfer conditions described in subparagraph 11.D are
satisfied. Any sale (including installment sale), lease, pledge,
management agreement, contract for deed, option agreement, assignment,
bequest, gift or otherwise, or any arrangement pursuant to which you
turn over all or part of the daily operation of the business to a
person or entity who shares in the losses or profits of the business in
a manner other than as an employee will be considered a transfer for
purposes of this Agreement. Specifically, but without limiting the
generality of the foregoing, the following events constitute a transfer
and you must comply with the right of first refusal, consent, transfer
fee, and other transfer conditions in this Paragraph 11:
1. Any change or any series of changes in the
percentage of the franchisee entity owned, directly or
indirectly, by any Principal Owner which results in any
addition or deletion of any person or entity who qualifies as
a Principal Owner;
2. Any change in the general partner of a franchisee
that is a general, limited or other partnership entity; or
3. For purposes of this subparagraph 11.A, a pledge
or seizure of any ownership interests in you or in any
Principal Owner that affects the ownership of 25% or more of
you or any Principal Owner, which we have not approved in
advance in writing.
In the event of your insolvency or the filing of any petition
by or against you under any provisions of any bankruptcy or insolvency
law, if your legal representative, successor, receiver or trustee
desires to succeed to your interest in this Agreement or the business
conducted hereunder, such person first must notify us, tender the right
of first refusal provided for in subparagraph 11.F, and if we do not
exercise such right, must apply for and obtain our consent to the
transfer, pay the transfer fee provided for in subparagraph 11.C, and
satisfy the transfer conditions described in subparagraph 11.D. In
addition, you or the assignee must pay the attorneys' fees and costs
that we incur in any bankruptcy or insolvency proceeding pertaining to
you.
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You may not place in, on or upon the location of the
Restaurant, or in any communication media or any form of advertising,
any information relating to the sale of the Restaurant or the rights
under this Agreement, without our prior written consent.
B. Consent to Transfer. We will not unreasonably withhold our
consent to transfer, provided that all of the conditions described in
this Paragraph 11 have been satisfied. Application for our consent to a
transfer and tender of the right of first refusal provided for in
subparagraph 11.F must be made by submission of our form of application
for consent to transfer, which must be accompanied by the documents
(including a copy of the proposed purchase or other transfer agreement)
or other required information. The application must indicate whether
you or a Principal Owner proposes to retain a security interest in the
property to be transferred. No security interest may be retained or
created, however, without our prior written consent and except upon
conditions acceptable to us. Any agreement used in connection with a
transfer shall be subject to our prior written approval, which approval
will not be withheld unreasonably. You immediately must notify us of
any proposed transfer and must submit promptly to us the application
for consent to transfer. Any attempted transfer by you without our
prior written consent or otherwise not in compliance with the terms of
this Agreement will be void, your interest in this Agreement will be
voluntarily abandoned, and it will provide us with the right to elect
either to deem you in default and terminate this Agreement or to
collect from you and the guarantors a transfer fee equal to two times
the transfer fee provided for in subparagraph 11.C.
C. Transfer Fee. You must pay to us a $12,500 transfer fee
every time you submit an application for consent to transfer. The
transfer fee must be submitted at the time you submit the application
for consent to transfer. If the transfer is part of a simultaneous,
multiple restaurant transfer, the transfer fee will be modified as
follows: the transfer fee for the first restaurant is $12,500, the
transfer fee for the second through tenth restaurants is $2,500 per
restaurant, with no additional transfer fee beyond the tenth
restaurant. If, however, our costs and expenses in reviewing and
processing the transfer, including attorneys' fees, exceed the
applicable transfer fee, then in addition to the transfer fee you agree
to cover those additional costs and expenses up to $10,000. The
transfer fee is nonrefundable even if, for any reason, the proposed
transfer does not occur, in which case the transfer fee you paid us for
the failed transfer will not be applied to any future attempted
transfer.
D. Conditions of Transfer. We condition our consent to any
proposed transfer, whether to an individual, a corporation, a
partnership or any other entity upon the following:
1. Assignee Requirements. The assignee must meet all
of our then-current requirements for any potential new
franchisee at the time of the proposed transfer.
2. Payment of Amounts Owed. All amounts owed by you
to us or any of our affiliates, your suppliers or any landlord
for the Restaurant premises and Authorized Location, or upon
which we or any of our affiliates have any contingent
liability must be paid in full.
3. Reports. You must have provided all required
reports to us in accordance with subparagraphs 9.G and H.
4. Modernization. You must have complied with the
provisions of subparagraph 5.E.
5. Guarantee. In the case of an installment sale for
which we have consented to you or any Principal Owner
retaining a security interest or other financial interest in
this Agreement or the business operated thereunder, you or
such Principal Owner, and the guarantors, are obligated to
guarantee the performance under this Agreement until the final
close of the installment sale or the termination of such
interest, as the case may be.
6. General Release. You, each Principal Owner and
each guarantor must sign a general release of all claims
arising out of or relating to this Agreement, your Restaurant
or the parties' business relationship, in the form we
designate, releasing us and our affiliates.
7. Execution of Then Current Franchise Agreement. The
assignee executes our then-current form of franchise agreement
(modified to reflect that the term is only the remainder of
the term under this Agreement and other modifications to
reflect that the agreement relates to a transfer), the terms
of which may differ from this Agreement, including higher fees
and modifications to the Designated Area (although in no event
will the revised Designated Area have a residential population
of the lesser of approximately 30,000 to 40,000 or the
residential population that existed as of the Effective Date).
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8. Training. The assignee must, at your or assignee's
expense, comply with the training requirements of subparagraph
7.B.
9. Financial Reports and Data. We have the right to
require you to prepare and furnish to assignee and/or us such
financial reports and other data relating to the Restaurant
and its operations reasonably necessary or appropriate for
assignee and/or us to evaluate the Restaurant and the proposed
transfer. You agree that we have the right to confer with
proposed assignees and furnish them with information
concerning the Restaurant and proposed transfer without being
held liable to you, except for intentional misstatements made
to an assignee. Any information furnished by us to proposed
assignees is for the sole purpose of permitting the assignees
to evaluate the Restaurant and proposed transfer and must not
be construed in any manner or form whatsoever as earnings
claims or claims of success or failure.
10. Other Franchise Agreements. You must be in full
compliance with all your obligations under any and all
Franchise Agreements and Area Development Agreements executed
between you and us.
11. Other Conditions. You must have complied with any
other conditions that we reasonably require from time to time
as part of our transfer policies, provided that such
conditions will not be more stringent than any conditions
otherwise imposed on new franchisees signing the then current
franchise agreement.
E. Death, Disability or Incapacity. If any individual who is a
Principal Owner dies or becomes disabled or incapacitated and the
decedent's or disabled or incapacitated person's heir or
successor-in-interest wishes to continue as a Principal Owner, such
person or entity must apply for our consent under subparagraph 11.B,
comply with the training requirements of subparagraph 7.B if the
Principal Owner also was the Control Person (unless the heir or
successor-in-interest finds another Principal Owner to qualify as the
Control Person), pay the applicable transfer fee under subparagraph
11.C, and satisfy the transfer conditions under subparagraph 11.D, as
in any other case of a proposed transfer, all within 180 days of the
death or event of disability or incapacity. During any transition
period to an heir or successor-in-interest, the Restaurant still must
be operated in accordance with the terms and conditions of this
Agreement. If the assignee of the decedent or disabled or incapacitated
person is the spouse or child of such person, no transfer fee will be
payable to us and we will not have a right of first refusal as set
forth in subparagraph 11.F.
F. Right of First Refusal. If you propose to transfer or
assign this Agreement or your interest herein or in the business, in
whole or in part, to any third party, including, without limitation,
any transfer contemplated by subparagraph 11.E or any transfer
described in subparagraph 11.A, you first must offer to sell to us your
interest under the same terms. In the event of a bona fide offer from
such third party, you must obtain from the third-party offeror and
deliver to us a statement in writing, signed by the offeror and by you,
of the terms of the offer. In the event the proposed transfer results
from a change in control of the franchisee or a Principal Owner under
subparagraphs 11.A.1 through 11.A.3, or your insolvency or the filing
of any petition by or against you under any provisions of any
bankruptcy or insolvency law, you first must offer to sell to us your
interest in this Agreement and the land, building, equipment, furniture
and fixtures, and any leasehold interest used in the operation of your
Restaurant. Unless otherwise agreed to in writing by us and you, the
purchase price for our purchase of assets in the event of a transfer
that occurs by a change in control or insolvency or bankruptcy filing
will be established by a qualified appraiser selected by the parties
and in accordance with the price determination formula established in
subparagraph 14.B in connection with an asset purchase upon expiration.
In addition, unless otherwise agreed to in writing by us and you, the
transaction documents, which we will prepare, will be those customary
for this type of transaction and will include representations and
warranties then customary for this type of transaction. If the parties
cannot agree upon the selection of such an appraiser, a Judge of the
United States District Court for the District in which the Authorized
Location is located will appoint one upon petition of either party.
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You or your legal representative must deliver to us a
statement in writing incorporating the appraiser's report and all other
information we have requested. We then have 45 days from our receipt of
the statement setting forth the third-party offer or the appraiser's
report and other requested information to accept the offer by
delivering written notice of acceptance to you. Our acceptance of any
right of first refusal will be on the same price and terms set forth in
the statement delivered to us; provided, however, we have the right to
substitute equivalent cash for any noncash consideration included in
the offer. If we fail to accept the offer within the 45-day period, you
will be free for 60 days after such period to effect the disposition
described in the statement delivered to us provided such transfer is in
accordance with this Paragraph 11. You may effect no other sale or
assignment of you, this Agreement or the business without first
offering the same to us in accordance with this subparagraph 11.F.
G. Transfer to Immediate Family Members. If the assignee is
your spouse or child, no transfer fee will be payable to us, although
you must reimburse us for our reasonable expenses, in an amount not to
exceed $3,500. Further, if the transfer is to a spouse or child, we
will waive our right of first refusal described in subparagraph 11.F
and will not require that the individual execute the then-current
franchise agreement, as required by subparagraph 11.D.E. All other
provisions of this Paragraph 11 apply in full force and effect to the
type of transfer described in this subparagraph.
H. Transfer by Us. We have the right to sell or assign, in
whole or in part, our interest in this Agreement.
DISPUTE RESOLUTION
12. The following provisions apply with respect to dispute resolution:
A. Arbitration; Mediation. Except as qualified below, any
dispute between you and us or any of our or your affiliates arising
under, out of, in connection with or in relation to this Agreement, any
lease or sublease for the Restaurant or Authorized Location, the
parties' relationship, or the business must be submitted to binding
arbitration under the authority of the Federal Arbitration Act and must
be arbitrated in accordance with the then-current rules and procedures
and under the auspices of the American Arbitration Association. The
arbitration must take place in Minneapolis, Minnesota, or at such other
place as may be mutually agreeable to the parties. Any arbitration must
be resolved on an individual basis and not joined as part of a class
action or the claims of other parties. The arbitrators must follow the
law and not disregard the terms of this Agreement. The decision of the
arbitrators will be final and binding on all parties to the dispute;
however, the arbitrators may not under any circumstances: (i) stay the
effectiveness of any pending termination of this Agreement; (ii) assess
punitive or exemplary damages; or (iii) make any award which extends,
modifies or suspends any lawful term of this Agreement or any
reasonable standard of business performance that we set. A judgment may
be entered upon the arbitration award by any state or federal court in
Minnesota or the state of the Authorized Location.
Before the filing of any arbitration, the parties agree to
mediate any dispute that does not include injunctive relief or specific
performance actions covered under subparagraph 12.B, provided that the
party seeking mediation must notify the other party of its intent to
mediate prior to the termination of this Agreement. Mediation will be
conducted by a mediator or mediation program agreed to by the parties.
Persons authorized to settle the dispute must attend any mediation
session. The parties agree to participate in the mediation proceedings
in good faith with the intention of resolving the dispute if at all
possible within 30 days of the notice from the party seeking to
initiate the mediation procedures. If not resolved within 30 days, the
parties are free to pursue arbitration. Mediation is a compromise
negotiation for purposes of the federal and state rules of evidence,
and the entire process is confidential.
B. Injunctive Relief. Notwithstanding subparagraph 12.A above,
you recognize that the Restaurant is one of a large number of
restaurants and stores identified by the Trademarks and similarly
situated and selling to the public similar products, and the failure on
the part of a single franchisee to comply with the terms of its
agreement could cause irreparable damage to us and/or to some or all of
our other franchisees. Therefore, it is mutually agreed that in the
event of a breach or threatened breach of any of the terms of this
Agreement by you, we will forthwith be entitled to an injunction
restraining such breach or to a decree of specific performance, without
showing or proving any actual damage, together with recovery of
reasonable attorneys' fees and other costs incurred in obtaining said
equitable relief, until such time as a final and binding determination
is made by the arbitrators. The foregoing equitable remedies are in
addition to, and not in lieu of, all other remedies or rights that the
parties might otherwise have by virtue of any breach of this Agreement
by the other party. Finally, we and our affiliates have the right to
commence a civil action against you or take other appropriate action
for the following reasons: to collect sums of money due to us; to
compel your compliance with trademark standards and requirements to
protect the goodwill of the Trademarks; to compel you to compile and
submit required reports to us; or to permit evaluations or audits
authorized by this Agreement.
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C. Attorneys' Fees. The prevailing party in any action or
proceeding arising under, out of, in connection with, or in relation to
this Agreement, any lease or sublease for the Restaurant or Authorized
Location, or the business will be entitled to recover its reasonable
attorneys' fees and costs.
DEFAULT AND TERMINATION
13. The following provisions apply with respect to default and
termination:
A. Defaults. You are in default if we determine that you or
any Principal Owner or guarantor has breached any of the terms of this
Agreement or any other agreement between you and us or our affiliates,
which without limiting the generality of the foregoing includes making
any false report to us, intentionally understating or underreporting or
failure to pay when due any amounts required to be paid to us or any of
our affiliates, conviction of you, a Principal Owner, or a guarantor of
(or pleading no contest to) any misdemeanor that brings or tends to
bring any of the Trademarks into disrepute or impairs or tends to
impair your reputation or the goodwill of any of the Trademarks or the
Restaurant, any felony, filing of tax or other liens that may affect
this Agreement, voluntary or involuntary bankruptcy by or against you
or any Principal Owner or guarantor, insolvency, making an assignment
for the benefit of creditors or any similar voluntary or involuntary
arrangement for the disposition of assets for the benefit of creditors.
B. Termination by Us. We have the right to terminate this
Agreement in accordance with the following provisions:
1. Termination After Opportunity to Cure. Except as
otherwise expressly provided in this subparagraph 13.B or
elsewhere in the Agreement: (i) you will have 30 days from the
date of our issuance of a written notice of default to cure
any default under this Agreement, other than a failure to pay
amounts due or submit required reports, in which case you will
have 10 days to cure those defaults; (ii) your failure to cure
a default within the 30-day or 10-day period will provide us
with good cause to terminate this Agreement; (iii) the
termination will be accomplished by mailing or delivering to
you written notice of termination that will identify the
grounds for the termination; and (iv) the termination will be
effective immediately upon our issuance of the written notice
of termination.
2. Immediate Termination With No Opportunity to Cure.
In the event any of the following defaults occurs, you will
have no right or opportunity to cure the default and this
Agreement will terminate effective immediately on our issuance
of written notice of termination: any material
misrepresentation or omission in your franchise application,
your voluntary abandonment of this Agreement or the Authorized
Location, the loss or revocation of your liquor license or
suspensions totaling 90 days over any 5 year period, the loss
of your lease, the failure to timely cure a default under the
lease, the loss of your right of possession or failure to
reopen or relocate under subparagraph 5.D, the closing of the
Restaurant by any state or local authorities for health or
public safety reasons, any unauthorized use of the
Confidential Information, insolvency of you, a Principal
Owner, the Control Person or guarantor, you, a Principal
Owner, the Control Person or guarantor making an assignment or
entering into any similar arrangement for the benefit of
creditors, any default under this Agreement that materially
impairs the goodwill associated with any of the Trademarks,
conviction of you, any Principal Owners, the Control Person,
or guarantors of (or pleading no contest to) any felony
regardless of the nature of the charges, or any misdemeanor
that brings or tends to bring any of the Trademarks into
disrepute or impairs or tends to impair your reputation or the
goodwill of the Trademarks or the Restaurant, intentionally
understating or underreporting Gross Sales, Royalty Fees or
Advertising Fees or any understatement or 1.25% variance on a
subsequent audit within a 3 year period under subparagraph
9.H, failure to open the Restaurant by the date set forth in
subparagraph 2.C, failure to execute the lease (including the
Lease Addendum) or the Purchase Agreement for the Restaurant
by the date stated subparagraph 5.A, failure to start
substantial construction of the Restaurant by the date
established in subparagraph 5.B, failure to secure financing
for the construction of the Restaurant by the date set forth
in subparagraph 5.B, violation by you of the provisions of
subparagraph 15.P, any unauthorized transfer or assignment in
violation of Paragraph 11 or any default by you that is the
second same or similar default within any 12-month consecutive
period or the fourth default of any type within any 24-month
consecutive period.
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3. Immediate Termination After No More than 24 Hours
to Cure. In the event that a default under this Agreement
occurs that violates any health safety or sanitation law or
regulation, violates any system standard as to food handling,
cleanliness, health and sanitation, or if the operation of the
Restaurant presents a health or safety hazard to your
customers or to the public (for example, improper cooking or
storage procedures used for chicken wings): (i) you will have
no more than 24 hours after we provide written notice of the
default to cure the default; and (ii) if you fail to cure the
default within the 24 hour period, this Agreement will
terminate effective immediately on our issuance of written
notice of termination.
4. Effect of Other Laws. The provisions of any valid,
applicable law or regulation prescribing permissible grounds,
cure rights or minimum periods of notice for termination of
this franchise supersede any provision of this Agreement that
is less favorable to you.
C. Termination by You. You may terminate this Agreement as a
result of a breach by us of a material provision of this Agreement
provided that: (i) you provide us with written notice of the breach
that identifies the grounds for the breach; and (ii) we fail to cure
the breach within 30 days after our receipt of the written notice. If
we fail to cure the breach, the termination will be effective 60 days
after our receipt of your written notice of breach. Your termination of
this Agreement under this Paragraph will not release or modify your
Post-Term obligations under Paragraph 14 of this Agreement.
POST-TERM OBLIGATIONS
14. Upon the expiration or termination of this Agreement:
A. Reversion of Rights; Discontinuation of Trademark Use. All
of your rights to the use of the Trademarks and all other rights and
licenses granted herein and the right and license to conduct business
under the Trademarks at the Authorized Location will revert to us
without further act or deed of any party. All of your right, title and
interest in, to and under this Agreement will become our property. Upon
our demand, you must assign to us or our assignee your remaining
interest in any lease then in effect for the Restaurant (although we
will not assume any past due obligations). You must immediately comply
with the post-term noncompete obligations under subparagraph 10.D,
cease all use and display of the Trademarks and of any proprietary
material (including the manual and the product preparation materials)
and of all or any portion of point-of-sale materials furnished or
approved by us, assign all right, title and interest in the telephone
numbers for the Restaurant and cancel or assign, at our option, any
assumed name rights or equivalent registrations filed with authorities.
You must pay all sums due to us, our affiliates or designees and all
sums you owe to third parties that have been guaranteed by us or any of
our affiliates. You must immediately return to us, at your expense, all
copies of the manuals and product preparation materials then in your
possession or control or previously disseminated to your employees and
continue to comply with the confidentiality provisions of subparagraph
6.J. You must promptly at your expense and subject to subparagraph
14.B, remove or obliterate all Restaurant signage, displays or other
materials (electronic or tangible) in your possession at the Authorized
Location or elsewhere that bear any of the Trademarks or names or
material confusingly similar to the Trademarks and so alter the
appearance of the Restaurant as to differentiate the Restaurant
unmistakably from duly licensed restaurants identified by the
Trademarks. If, however, you refuse to comply with the provisions of
the preceding sentence within 30 days, we have the right to enter the
Authorized Location and remove all Restaurant signage, displays or
other materials in your possession at the Authorized Location or
elsewhere that bear any of the Trademarks or names or material
confusingly similar to the Trademarks, and you must reimburse us for
our costs incurred. Notwithstanding the foregoing, in the event of
expiration or termination of this Agreement, you will remain liable for
your obligations pursuant to this Agreement or any other agreement
between you and us or our affiliates that expressly or by their nature
survive the expiration or termination of this Agreement.
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B. Purchase Option. We have the right to purchase or designate
a third party that will purchase all or any portion of the assets of
your Restaurant that are owned by you or any of your affiliates
including, without limitation, the land, building, equipment, fixtures,
signage, furnishings, supplies, leasehold improvements, liquor license
and inventory of the Restaurant at a price determined by a qualified
appraiser (or qualified appraisers if one party believes it is better
to have a real estate appraiser appraise the value of the land and
building and a business appraiser appraise the Restaurant's other
assets) selected with the consent of both parties, provided we give you
written notice of our preliminary intent to exercise our purchase
rights under this Paragraph within 30 days after the date of the
expiration or termination of this Agreement. If the parties cannot
agree upon the selection of an appraiser(s), one or both will be
appointed by a Judge of the United States District Court for the
District in which the Authorized Location is located upon petition of
either party.
In the event the Agreement is terminated (rather than if it
expires), the price determined by the appraiser(s) will be the
reasonable fair market value of the assets based on their continuing
use in, as, and for the operation of a BUFFALO WILD WINGS Restaurant
and the appraiser will designate a price for each category of asset
(e.g., land, building, equipment, fixtures, etc.), but shall not
include the value of any goodwill of the business, as the goodwill of
the business is attributable to the Trademarks and the System. In the
event that the Agreement expires (rather than if it is terminated), the
price determined by the appraiser(s) will be the reasonable fair market
value of the assets, as stated in the prior sentence, plus the value of
any goodwill of the business, attributable to your operation of the
Restaurant. In the event of expiration, however, the parties agree that
you may elect not to include the land in the appraisal and option to
purchase process. In this instance, you may elect to lease the land to
us or our designee for a lease term of at least 10 years with two
5-year options to renew and for a primary rate equal to fair market
value according to the applicable Building Office Management
Association Guidelines, unless otherwise agreed to by the parties.
Within 45 days after our receipt of the appraisal report, we
or our designated purchaser will identify the assets, if any, that we
intend to purchase at the price designated for those assets in the
appraisal report. We or our designated purchaser and you will then
proceed to complete and close the purchase of the identified assets,
and to prepare and execute purchase and sale documents customary for
the assets being purchased, in a commercially reasonable time and
manner. We and you will each pay one-half of the appraiser's fees and
expenses. Our interest in the assets of the Restaurant that are owned
by you or your affiliates will constitute a lien thereon and may not be
impaired or terminated by the sale or other transfer of any of those
assets to a third party. Upon our or our designated purchaser's
exercise of the purchase option and tender of payment, you agree to
sell and deliver, and cause your affiliates to sell and deliver, the
purchased assets to us or our designated purchaser, free and clear of
all encumbrances, and to execute and deliver, and cause your affiliates
to execute and deliver, to us or our designated purchaser a bill of
sale therefor and such other documents as may be commercially
reasonable and customary to effectuate the sale and transfer of the
assets being purchased.
If we do not exercise our option to purchase under this
subparagraph, you may sell or lease the Restaurant premises to a third
party purchaser, provided that your agreement with the purchaser
includes a covenant by the purchaser, which is expressly enforceable by
us as a third party beneficiary, pursuant to which the purchaser
agrees, for a period of 2 years after the expiration or termination of
this Agreement, not to use the premises for the operation of a
restaurant business that has a menu or method of operation similar to
that employed by our company-owned or franchised restaurants.
C. Claims. You and your Principal Owners and guarantors may
not assert any claim or cause of action against us or our affiliates
relating to this Agreement or the BUFFALO WILD WINGS business after the
shorter period of the applicable statute of limitations or one year
following the effective date of termination of this Agreement; provided
that where the one-year limitation of time is prohibited or invalid by
or under any applicable law, then and in that event no suit or action
may be commenced or maintained unless commenced within the applicable
statute of limitations.
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GENERAL PROVISIONS
15. The parties agree to the following provisions:
A. Severability. Should one or more clauses of this Agreement
be held void or unenforceable for any reason by any court of competent
jurisdiction, such clause or clauses will be deemed to be separable in
such jurisdiction and the remainder of this Agreement is valid and in
full force and effect and the terms of this Agreement must be equitably
adjusted so as to compensate the appropriate party for any
consideration lost because of the elimination of such clause or
clauses. It is the intent and expectation of each of the parties that
each provision of this Agreement will be honored, carried out and
enforced as written. Consequently, each of the parties agrees that any
provision of this Agreement sought to be enforced in any proceeding
must, at the election of the party seeking enforcement and
notwithstanding the availability of an adequate remedy at law, be
enforced by specific performance or any other equitable remedy.
B. Waiver/Integration. No waiver by us of any breach by you,
nor any delay or failure by us to enforce any provision of this
Agreement, may be deemed to be a waiver of any other or subsequent
breach or be deemed an estoppel to enforce our rights with respect to
that or any other or subsequent breach. Subject to our rights to modify
Appendices and/or standards and as otherwise provided herein, this
Agreement may not be waived, altered or rescinded, in whole or in part,
except by a writing signed by you and us. This Agreement together with
the addenda and appendices hereto and the application form executed by
you requesting us to enter into this Agreement constitute the sole
agreement between the parties with respect to the entire subject matter
of this Agreement and embody all prior agreements and negotiations with
respect to the business. You acknowledge and agree that you have not
received any warranty or guarantee, express or implied, as to the
potential volume, profits or success of your business. There are no
representations or warranties of any kind, express or implied, except
as contained herein and in the aforesaid application.
C. Notices. Except as otherwise provided in this Agreement,
any notice, demand or communication provided for herein must be in
writing and signed by the party serving the same and either delivered
personally or by a reputable overnight service or deposited in the
United States mail, service or postage prepaid and addressed as
follows:
1. If intended for us, addressed to General Counsel,
Buffalo Wild Wings International, Inc., 1600 Utica Avenue
South, Suite 700, Minneapolis, Minnesota 55416;
2. If intended for you, addressed to you at
____________________________________ or at the Authorized Location; or,
in either case, as the intended party may change such address by
written notice to the other party. Notices for purposes of this
Agreement will be deemed to have been received if mailed or delivered
as provided in this subparagraph.
D. Authority. Any modification, consent, approval,
authorization or waiver granted hereunder required to be effective by
signature will be valid only if in writing executed by the Control
Person or, if on behalf of us, in writing executed by our President or
one of our authorized Vice Presidents.
E. References. If the franchisee is 2 or more individuals, the
individuals are jointly and severally liable, and references to you in
this Agreement includes all of the individuals. Headings and captions
contained herein are for convenience of reference and may not be taken
into account in construing or interpreting this Agreement.
F. Guarantee. All Principal Owners of a franchisee that is a
corporation, limited liability company, partnership or other legal
entity must execute the form of undertaking and guarantee at the end of
this Agreement. Any person or entity that at any time after the date of
this Agreement becomes a Principal Owner pursuant to the provisions of
Paragraph 11 or otherwise must execute the form of undertaking and
guarantee at the end of this Agreement within 10 days from the date
such person or entity becomes a Principal Owner; provided, however,
that any person or entity who becomes a Principal Owner shall
automatically acquire all the obligations of a Principal Owner under
this Agreement at the time such person or entity becomes a Principal
Owner. Before approving and entering into any transaction that would
make any person or entity a Principal Owner, you must notify such
person about the content of this subparagraph.
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G. Successors/Assigns. Subject to the terms of Paragraph 11
hereof, this Agreement is binding upon and inures to the benefit of the
administrators, executors, heirs, successors and assigns of the
parties.
H. Interpretation of Rights and Obligations. The following
provisions apply to and govern the interpretation of this Agreement,
the parties' rights under this Agreement, and the relationship between
the parties:
1. Applicable Law and Waiver. Subject to our rights
under federal trademark laws and the parties' rights under the
Federal Arbitration Act in accordance with Paragraph 12 of
this Agreement, the parties' rights under this Agreement, and
the relationship between the parties is governed by, and will
be interpreted in accordance with, the laws (statutory and
otherwise) of the state in which the Authorized Location is
located. You waive, to the fullest extent permitted by law,
the rights and protections that might be provided through the
laws of any state relating to franchises or business
opportunities, other than those of the state in which the
Authorized Location is located.
2. Our Rights. Whenever this Agreement provides that
we have a certain right, that right is absolute and the
parties intend that our exercise of that right will not be
subject to any limitation or review. We have the right to
operate, administrate, develop, and change the System in any
manner that is not specifically precluded by the provisions of
this Agreement, although this right does not modify the
requirements of subparagraph 5.E and other express limitations
set forth in this Agreement.
3. Our Reasonable Business Judgment. Whenever we
reserve discretion in a particular area or where we agree to
exercise our rights reasonably or in good faith, we will
satisfy our obligations whenever we exercise Reasonable
Business Judgment in making our decision or exercising our
rights. Our decisions or actions will be deemed to be the
result of Reasonable Business Judgment, even if other
reasonable or even arguably preferable alternatives are
available, if our decision or action is intended, in whole or
significant part, to promote or benefit the System generally
even if the decision or action also promotes our financial or
other individual interest. Examples of items that will promote
or benefit the System include, without limitation, enhancing
the value of the Trademarks, improving customer service and
satisfaction, improving product quality, improving uniformity,
enhancing or encouraging modernization and improving the
competitive position of the System.
I. Venue. Any cause of action, claim, suit or demand allegedly
arising from or related to the terms of this Agreement or the
relationship of the parties that is not subject to arbitration under
Paragraph 12, must be brought in the Federal District Court for the
District of Minnesota or in Hennepin County District Court, Fourth
Judicial District, Minneapolis, Minnesota. Both parties hereto
irrevocably submit themselves to, and consent to, the jurisdiction of
said courts. The provisions of this subparagraph will survive the
termination of this Agreement. You are aware of the business purposes
and needs underlying the language of this subparagraph, and with a
complete understanding thereof, agree to be bound in the manner set
forth.
J. Jury Waiver. All parties hereby waive any and all rights to
a trial by jury in connection with the enforcement or interpretation by
judicial process of any provision of this Agreement, and in connection
with allegations of state or federal statutory violations, fraud,
misrepresentation or similar causes of action or any legal action
initiated for the recovery of damages for breach of this Agreement.
K. Waiver of Punitive Damages. You and your affiliates and us
and our affiliates agree to waive, to the fullest extent permitted by
law, the right to or claim for any punitive or exemplary damages
against the other and agree that in the event of any dispute between
them, each will be limited to the recovery of actual damages sustained.
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L Relationship of the Parties. You and we are independent
contractors. Neither party is the agent, legal representative, partner,
subsidiary, joint venturer or employee of the other. Neither party may
obligate the other or represent any right to do so. This Agreement does
not reflect or create a fiduciary relationship or a relationship of
special trust or confidence. Without limiting the generality of the
foregoing, we shall have no liability in connection with or related to
the products or services rendered to you by any third party, even if we
required, approved or consented to the product or service or designated
or approved the supplier.
M. Force Majeure. In the event of any failure of performance
of this Agreement according to its terms by any party due to force
majeure will not be deemed a breach of this Agreement. For purposes of
this Agreement, "force majeure" shall mean acts of God, State or
governmental action, riots, disturbance, war, strikes, lockouts,
slowdowns, prolonged shortage of energy supplies or any raw material,
epidemics, fire, flood, hurricane, typhoon, earthquake, lightning and
explosion or other similar event or condition, not existing as of the
date of signature of this Agreement, not reasonably foreseeable as of
such date and not reasonably within the control of any party hereto,
which prevents in whole or in material part the performance by one of
the parties hereto of its obligations hereunder.
N. Adaptations and Variances. Complete and detailed uniformity
under many varying conditions may not always be possible, practical, or
in the best interest of the System. Accordingly, we have the right to
vary the Menu Items and other standards, specifications, and
requirements for any franchised restaurant or franchisee based upon the
customs or circumstances of a particular franchise or operating
agreement, site or location, population density, business potential,
trade area population, existing business practice, competitive
circumstance or any other condition that we deem to be of importance to
the operation of such restaurant or store, franchisee's business or the
System. We are not required to grant to you a like or other variation
as a result of any variation from standard menus, specifications or
requirements granted to any other franchisee. You acknowledge that you
are aware that our other franchisees operate under a number of
different forms of agreement that were entered into at different times
and that, consequently, the obligations and rights of the parties to
other agreements may differ materially in certain instances from your
rights and obligations under this Agreement.
O. Notice of Potential Profit. We and/or our affiliates may
from time to time make available to you or require you to purchase
goods, products and/or services for use in your Restaurant on the sale
of which we and/or our affiliates may make a profit. Further, we and/or
our affiliates may from time to time receive consideration from
suppliers and/or manufacturers in respect to sales of goods, products
or services to you or in consideration of services rendered or rights
licensed to such persons. You agree that we and/or our affiliates are
entitled to said profits and/or consideration.
P. Interference with Employment Relations. During the term of
this Agreement, neither we nor you may employ or seek to employ,
directly or indirectly, any person who is at the time or was at any
time during the prior 6 months employed in any type of managerial
position by the other party or any of its affiliates, or by any
franchisee in the system. In the event that you violate this provision,
we will have the right to terminate this Agreement without opportunity
to cure pursuant to subparagraph 13.B.2. In addition, any party who
violates this provision agrees to pay as fair and reasonable liquidated
damages (but not as a penalty) an amount equal to 2 times the annual
compensation that the person being hired away was receiving at the time
the violating party offers her/him employment. You agree that this
amount is for the damages that the non-violating party will suffer for
the loss of the person hired away by the other party, including the
costs of finding, hiring and training a new employee and for the loss
of the services and experience of the employee hired away, and that it
would be difficult to calculate with certainty the amount of damage
that the non-violating party will incur. Notwithstanding the foregoing,
if a court determines that this liquidated damages payment is
unenforceable, then the non-violating party may pursue all other
available remedies, including consequential damages. This subparagraph
will not be violated if (i) at the time we or you employ or seek to
employ the person, the former employer has given its written consent or
(ii) we employ or seek to employ the person in connection with the
transfer of the Restaurant to us or any of our affiliates. The parties
acknowledge and agree that any franchisee from whom an employee was
hired by you in violation of this subparagraph shall be a third-party
beneficiary of this provision, but only to the extent they may seek
compensation from you.
29
Q. National Consumer Price Index. We may adjust the maximum
modernization amount (subparagraph 5.E) every five year period, as
noted in subparagraph 5.E, in proportion to the five-year change in the
National Consumer Price Index - All Urban Consumers as reported for
each calendar year by the U.S. Department of Labor (or the successor
index or agency thereto) using 2003 as the base year, and as so
adjusted will apply to the maximum modernization expenditure amount,
subsequent to the adjustment date but prior to the next adjustment
date.
R. Updating Your Franchise Agreement. If at any time during
the term of this Agreement you and us enter into a subsequent franchise
agreement (the "Subsequent Agreement") granting you the right to
operate another BUFFALO WILD WINGS restaurant and the terms of the
Subsequent Agreement are different from the terms of this Agreement,
you will have the right to request that this Agreement be replaced by a
franchise agreement containing terms and conditions similar to the
Subsequent Agreement (the "New Agreement"), but such right shall be
conditioned upon you meeting all the conditions stipulated in
subparagraph 4.B of this Agreement, except that you shall pay a fee of
only $2,500; provided, however, that the term under the New Agreement
shall be equal to the term left under this Agreement at the time of the
execution of the New Agreement. You must exercise the rights granted
under this subparagraph within 30 days after the date you execute the
Subsequent Agreement.
S. Effective Date. We will designate the "Effective Date" of
this Agreement in the space provided on the cover page. If no Effective
Date is designated on the cover page, the Effective Date is the date
when we sign this Agreement. However, as described in subparagraph 5.A,
you do not have the right to, and may not, open and commence operation
of a Restaurant at the Authorized Location until we notify you that you
have satisfied all of the pre-opening conditions set forth in this
Agreement.
T. Acknowledgment of Prohibition on Insider Trading. Federal
law and our parent company's policy prohibit purchasing or selling
stock in Buffalo Wild Wings, Inc. ("BWW") by anyone in possession of
material, non-public information concerning BWW. While it is not
possible to define "material information" to cover every set of
circumstances that might arise, a general guide is that information is
considered "material" if there is a substantial likelihood that a
reasonable investor would consider it important in determining whether
to buy, sell or hold stock. Violations of insider trading laws may be
punishable by fines and/or imprisonment. During the terms of this
Agreement, you may be provided with material, non-public information
regarding BWW. You hereby acknowledge that you are familiar with
insider trading laws and will not purchase or sell BWW stock while in
possession of material, non-public information.
30
31
IN WITNESS WHEREOF, the parties have executed this Franchise Agreement
on the dates written below.
FRANCHISEE: US:
BUFFALO WILD WINGS INTERNATIONAL, INC.
Date: _______________________________
Date: ______________________________
______________________________________
_____________________________________ By: Sally J. Smith
By: ________________________________ --------------
Its:_____________________________ Its: President & CEO
_____________________________________
By: ________________________________
Its:_____________________________
_____________________________________
By: ________________________________
Its:_____________________________
31
PERSONAL GUARANTY AND AGREEMENT TO BE BOUND
PERSONALLY BY THE TERMS AND CONDITIONS
OF THE FRANCHISE AGREEMENT
In consideration of the execution of the Franchise Agreement (the
"Agreement") between BUFFALO WILD WINGS INTERNATIONAL, INC. ("we" or "us") and
_____________________________(the "Franchisee"), dated_____, 20____ and for
other good and valuable consideration, the undersigned, for themselves, their
heirs, successors, and assigns, do jointly, individually and severally hereby
become surety and guarantor for the payment of all amounts and the performance
of the covenants, terms and conditions in the Agreement, to be paid, kept and
performed by the Franchisee, including without limitation the arbitration and
other dispute resolution provisions of the Agreement.
Further, the undersigned, individually and jointly, hereby agree to be
personally bound by each and every condition and term contained in the
Agreement, including but not limited to the non-compete provisions in
subparagraph 10.D, and agree that this Personal Guaranty will be construed as
though the undersigned and each of them executed an agreement containing the
identical terms and conditions of the Agreement.
The undersigned waive (1) notice of demand for payment of any
indebtedness or nonperformance of any obligations hereby guaranteed; (2) protest
and notice of default to any party respecting the indebtedness or nonperformance
of any obligations hereby guaranteed; (3) any right he/she may have to require
that an action be brought against the Franchisee or any other person as a
condition of liability; and (4) notice of any changes permitted by the terms of
the Agreement or agreed to by the Franchisee.
In addition, the undersigned consents and agrees that: (1) the
undersigned's liability will not be contingent or conditioned upon our pursuit
of any remedies against the Franchisee or any other person; (2) such liability
will not be diminished, relieved or otherwise affected by the Franchisee's
insolvency, bankruptcy or reorganization, the invalidity, illegality or
unenforceability of all or any part of the Agreement, or the amendment or
extension of the Agreement with or without notice to the undersigned; and (3)
this Personal Guaranty shall apply in all modifications to the Agreement of any
nature agreed to by Franchisee with or without the undersigned receiving notice
thereof.
It is further understood and agreed by the undersigned that the
provisions, covenants and conditions of this Personal Guaranty will inure to the
benefit of our successors and assigns.
FRANCHISEE:
PERSONAL GUARANTORS:
___________________________________ ___________________________________
Individually Individually
___________________________________ ___________________________________
Print Name Print Name
___________________________________ ___________________________________
Address Address
___________________________________ ___________________________________
City State Zip Code City State Zip Code
___________________________________ ___________________________________
Telephone Telephone
1
___________________________________ ___________________________________
Individually Individually
___________________________________ ___________________________________
Print Name Print Name
___________________________________ ___________________________________
Address Address
___________________________________ ___________________________________
City State Zip Code City State Zip Code
___________________________________ ___________________________________
Telephone Telephone
2
OWNERSHIP AND MANAGEMENT ADDENDUM TO
BUFFALO WILD WINGS(R) FRANCHISE AGREEMENT
1. Control Person. You represent and warrant to us that the following
person, and only the following person is the Control Person:
NAME TITLE ADDRESS
- ---- ----- -------
2. Ownership. You represent and warrant to us that the following
person(s) and entities, and only the following person(s) and entities, have
ownership interests in the franchisee entity:
PERCENTAGE
NAME HOME ADDRESS OF INTEREST
- ---- ------------ -----------
3. Unit General Manager. You represent and warrant to us that the
following person, and only the following person, is your Unit General Manager:
NAME TITLE ADDRESS
- ---- ----- -------
4. Change. You must immediately notify us in writing of any change in
the information contained in this Addendum and, at our request, prepare and sign
a new Addendum containing the correct information.
5. Effective Date. This Addendum is effective as
of this ______ day of_________ , 2006.
___________________________________ _____________________________________
Your Initials Our Initials
Appendix A to the Franchise Agreement
TRADEMARKS
You have the right to use the following Trademarks in accordance with
the terms of the Franchise Agreement:
Service Mark: BUFFALO WILD WINGS
Registration No.: 2,239,550
Registration Date: April 13, 1999
Service Mark: BUFFALO WILD WINGS GRILL & BAR (Design Mark)
Registration No.: 2,187,765
Registration Date: September 8, 1998
[LOGO OMITTED]
Service Mark: BETTER-BE-READY BLAZIN'
Registration No.: 2,433,893
Registration Date: March 6, 2001
Service Mark: HOME OF THE REAL WING
Registration No.: 2,247,812
Registration Date: May 25, 1999
Service Mark: SOMETHING WILD HAS COME TO TOWN
Registration No.: 2,234,404
Registration Date: March 23, 1999
Service Mark: GOTTA WING IT
Registration No.: 2,556,785
Registration Date: April 2, 2002
Service Mark: WINGS. BEER. SPORTS. ALL
THE ESSENTIALS
Registration No.: 2,905,689
Registration Date: November 30, 2004
We may amend this Appendix A from time to time in order to make
available additional Trademarks or to delete those Trademarks that become
unavailable. You agree to use only those Trademarks that are then currently
authorized.
The Trademarks must be used only in the manner that we specify. No
deviations will be permitted.
Appendix B to the Franchise Agreement
THE DESIGNATED AREA
As stated in Subparagraph 2.B. of the Franchise Agreement, subject to the terms
and conditions of the Franchise Agreement, the Designated Area in which you will
locate and operate the Restaurant is defined as follows:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
The Designated Area is considered fixed as of the date of the Franchise
Agreement.
FRANCHISEE: FRANCHISOR:
BUFFALO WILD WINGS INTERNATIONAL, INC.
Date: _______________________________
Date: ______________________________
______________________________________
_____________________________________ By: Sally J. Smith
By: ________________________________ --------------
Its:_____________________________ Its: President & CEO
_____________________________________
By: ________________________________
Its:_____________________________
_____________________________________
By: ________________________________
Its:_____________________________
Appendix C to the Franchise Agreement
ADDENDUM TO LEASE
This Addendum to Lease, dated ______________, 200__, is entered into
between __________________("Landlord"), and _______________________("Tenant").
RECITALS
A. The parties have entered into a Lease Agreement, dated _________,
200__, (the "Lease") pertaining to the premises located at
_______________________________________ (the "Premises").
B. Landlord acknowledges that Tenant has agreed to operate a Restaurant at
the Premises pursuant to Tenant's Franchise Agreement (the "Franchise
Agreement") with Buffalo Wild Wings International, Inc. ("BWW") under
the name "Buffalo Wild Wings Grill & Bar" or other name designated by
BWW (the "Restaurant").
C. The parties desire to amend the Lease in accordance with the terms and
conditions contained in this Addendum to provide BWW the opportunity to
preserve the Premises as a BWW branded restaurant as provided herein.
AGREEMENT
Landlord and Tenant agree as follows:
1. Remodeling and Decor. Landlord agrees that Tenant has the right to
remodel, equip, paint and decorate the interior of the Premises and to
display such proprietary marks and signs on the interior and exterior
of the Premises as Tenant is reasonably required to do pursuant to the
Franchise Agreement and any successor Franchise Agreement under which
Tenant may operate a Restaurant on the Premises. Any remodel of the
building and/or its signs shall be subject to Landlord's prior and
reasonable approval.
2. Assignment. Tenant does not have the right to sublease or assign the
Lease to any third party without BWW's and Landlord's written approval.
Tenant has the right to assign all of its right, title and interest in
the Lease to BWW, its affiliates or its parent company, at any time
during the term of the Lease, including any extensions or renewals,
without first obtaining Landlord's consent. No assignment will be
effective, however, until BWW or its designated affiliate gives
Landlord written notice of its acceptance of the assignment. BWW or its
parent company will be responsible for the lease obligations incurred
after the effective date of the assignment. If BWW elects to assume the
Lease under this subparagraph or unilaterally assumes the lease as
provided for in subparagraph 3(a) or 4(a), Landlord and Tenant agree
that (i) Lessee will remain liable for the responsibilities and
obligations, including amounts owed to Landlord, prior to the date of
assignment and assumption, and (ii) BEWW will have the right to
sublease the Premises to another franchisee with Landlord's prior
reasonable approval - reasonableness to be based on proposed new
franchisee's related business experience and credit history, provided
the franchisee meets BWW's then-current standards and requirements for
franchisees and agrees to operate the Restaurant as a Buffalo Wild
Wings restaurant pursuant to a Franchise Agreement with BWW. Upon
receipt by Landlord of an assumption agreement pursuant to which the
assignee agrees to assume the Lease and to observe the terms,
conditions and agreements on the part of Tenant to be performed under
the Lease, the BWW Entity shall thereupon be released from all
liability as tenant under the Lease from and after the date of
assignment, without any need of a written acknowledgment of such
release by Landlord.
3. Default and Notice.
(a) Landlord shall send BWW copies of all notices of default it
gives to Tenant concurrently with giving such notices to
Tenant. If Tenant fails to cure any defaults within the period
specified in the Lease, Landlord shall promptly give BWW
written notice thereof, specifying the defaults Tenant has
failed to cure. BWW has the right to unilaterally assume the
Lease if Tenant fails to cure. BWW shall have 15 days from the
date BWW receives such notice to exercise, by written notice
to Landlord and Tenant, its right for BWW or its designee (the
"BWW Entity") to assume the Lease. BWW shall have an
additional 15 days from the expiration of Tenant's cure period
in which to cure the default or violation.
-1-
(b) If the BWW Entity elects to assume the Lease, the BWW Entity
shall not be required to cure defaults and/or to begin paying
rent until Landlord delivers possession of the Premises to the
BWW Entity. The BWW Entity shall have the right, at any time
until Landlord delivers possession of the Premises, to rescind
the option exercise, by written notice to Landlord.
(c) All notices to BWW must be sent by registered or certified
mail, postage prepaid, to the following address:
Buffalo Wild Wings International, Inc.
1600 Utica Avenue South
Suite 700
Minneapolis, MN 55416
Attention: General Counsel
BWW may change its address for receiving notices by giving Landlord
written notice of the new address. Landlord agrees that it will notify both
Tenant and BWW of any change in Landlord's mailing address to which notices
should be sent.
4. Termination, Non-Renewal, Expiration.
(a) If the Franchise Agreement is terminated for any reason during
the term of the Lease or any extension thereof, BWW has the
right, but not the obligation, to unilaterally assume the
Lease by giving Landlord written notice. Within 30 days after
receipt of such notice, Landlord shall give a BWW Entity
written notice specifying any defaults of Tenant under the
Lease.
(b) If the Lease contains term renewal or extension right(s) and
if Tenant allows the term to expire without exercising said
right(s), Landlord shall give BWW written notice thereof, and
a BWW Entity shall have the option, for thirty (30) days after
receipt of said notice, to exercise the Tenant's renewal or
extension right(s) on the same terms and conditions as are
contained in the Lease. If a BWW Entity elects to exercise
such right(s), it shall so notify Landlord in writing,
whereupon Landlord and the BWW Entity shall promptly execute
and deliver an agreement whereby the BWW Entity assumes the
Lease, effective at the commencement of the extension or
renewal term.
(c) Upon the expiration or termination of the Lease, Landlord will
cooperate with and assist BWW in gaining possession of the
Premises and if a BWW Entity does not elect to enter into a
new lease for the Premises with Landlord on terms reasonably
acceptable to the BWW Entity, Landlord will allow BWW to enter
the Premises, without being guilty of trespass and without
incurring any liability to Landlord, except for any damages
caused by BWW's willful misconduct or gross negligence, to
remove all signs, awnings, and all other items identifying the
Premises as a Buffalo Wild Wings(R) Restaurant and to make
such other modifications (such as repainting) as are
reasonably necessary to protect the Buffalo Wild Wings(R)
marks and system. In the event BWW exercises its option to
purchase assets of Tenant, Landlord must permit BWW to remove
all such assets being purchased by BWW.
-2-
5. Additional Provisions.
(a) Landlord hereby acknowledges that the provisions of this
Addendum to Lease are required pursuant to the Franchise
Agreement under which Tenant plans to operate its business and
the Tenant would not lease the Premises without this Addendum.
(b) Landlord further acknowledges that Tenant is not an agent or
employee of BWW and the Tenant has no authority or power to
act for, or to create any liability on behalf of, or to in any
way bind BWW or any affiliate of BWW, and that Landlord has
entered into this Addendum to Lease with full understanding
that it creates no duties, obligations or liabilities of or
against BWW or any affiliate of BWW, unless and until the
Lease is assigned to, and accepted in writing by, BWW or its
parent company.
(c) BWW Entity may elect not to assume or be bound by the terms of
any amendment to the Lease executed by Tenant without
obtaining BWW's prior written approval, which shall not be
unreasonably withheld or delayed.
6. Sales Reports. If requested by BWW, Landlord will provide BWW with
whatever information Landlord has regarding Tenant's sales from the
Restaurant.
7. Modification. No amendment or variation of the terms of this Addendum
is valid unless made in writing and signed by the parties and the
parties have obtained the written consent of BWW.
8. Reaffirmation of Lease. Except as amended or modified in this Addendum,
all of the terms, conditions and covenants of the Lease remain in full
force and effect and are incorporated by reference and made a part of
this Addendum as though copied herein in full. In the event of any
conflict between the terms of this Addendum and those in the Lease, the
terms of this Addendum shall control.
9. Beneficiary. Landlord and Tenant expressly agree that BWW is a third
party beneficiary of this Addendum.
IN WITNESS WHEREOF, the parties have executed this Addendum as of the
dates written below.
TENANT: LANDLORD:
_________________________________ ________________________________
By_______________________________ By______________________________
Its_________________________ Its_____________________________
-3-
Appendix D to the Franchise Agreement
ELECTRONIC TRANSFER OF FUNDS AUTHORIZATION
Franchisee:
Location:
Date:
-------------- -------------
NEW CHANGE
-------------- -------------
-------------- -------------
-------------- -------------
Attention: Bookkeeping Department
The undersigned hereby authorizes Buffalo Wild Wings International, Inc., its
parent company or any affiliated entity (collectively, "BWW"), to initiate
weekly ACH debit entries against the account of the undersigned with you in
payment of amounts for Royalty Fees, Advertising Fees or other amounts that
become payable by the undersigned to BWW. The dollar amount to be debited per
payment will vary.
Subject to the provisions of this letter of authorization, you are hereby
directed to honor any such ACH debit entry initiated by BWW.
This authorization is binding and will remain in full force and effect until 90
days prior written notice has been given to you by the undersigned. The
undersigned is responsible for, and must pay on demand, all costs or charges
relating to the handling of ACH debit entries pursuant to this letter of
authorization.
Please honor ACH debit entries initiated in accordance with the terms of this
letter of authorization, subject to there being sufficient funds in the
undersigned's account to cover such ACH debit entries.
Sincerely yours,
Sincerely yours,
*** We also need a VOIDED Check *** _____________________________
Account Name
_________________________________ _____________________________
Bank Name
Street Address
_________________________________ _____________________________
Branch City State Zip Code
_________________________________ _____________________________
Street Address Telephone Number
_________________________________ By___________________________
City State Zip Code
_________________________________ Its__________________________
Bank Telephone Number
Date_________________________
_________________________________
Bank's Account Number
_________________________________
Customer's Account Number
Appendix E to the Franchise Agreement
BUFFALO WILD WINGS(R)
AUTHORIZATION AND GIFT CARD PARTICIPATION AGREEMENT
The franchisee identified below ("Franchisee") hereby agrees to
participate in the gift card marketing program to be provided by SASH Management
L.L.C. d.b.a. Gift Card Solutions, a Utah limited liability company ("GCS") to
owners of franchises operated under an agreement with Buffalo Wild Wings, Inc.,
a Minnesota corporation, Blazin Wings, Inc., a Minnesota corporation, Buffalo
Wild Wings International, Inc., an Ohio corporation, and Real Wing, Inc., a
Kansas corporation (the aforementioned entities are collectively and
individually referred to as "Franchisor"). This Agreement will continue until
the expiration of the Gift Card Agreement between GCS and Buffalo Wild Wings,
Blazin Wings, Buffalo Wild Wings International, and Real Wing, Inc. dated August
16, 2002. GCS may otherwise terminate this Agreement if Franchisee ceases to
operate outlets pursuant to a franchise agreement with any of the above
referenced entities or, with the consent of the respective franchisor,
franchisee has defaulted under the terms of this Agreement.
GCS' program is made available to Franchisee in return for Franchisee's
agreement to participate in a TurnKey Gift Card program (the "Program") that
will allow Franchisee's customers to prepay in specific amounts for product
purchases at participating stores and to then purchase product at any
participating store using the gift card (the "Gift Card") provided by GCS for
purchase. To effectuate this, GCS agrees to provide the following:
1. A complete TurnKey Gift Card processing program, defined to include a
system for real-time card authorization and accounting and funds
settlement procedures.
2. Provide reports that will be available via a secure web site for next
day viewing of daily transaction detail.
3. Maintain adequate communication lines for both the issuing and
verification terminals within the Franchisee's stores.
4. Inventory management, including ordering and disbursement of cards to
Franchisee.
5. Accept and fulfill Gift Card requests from consumers and Franchisee.
6. Maintain adequate inventory of card stock and other fulfillment
materials.
7. With the assistance of Franchisee, prepare individual terminals at each
Store to accept Gift Cards by programming terminals, gaining required
permissions from a Store merchant acquirer or through other measures
that are required for participation in the program.
8. Maintain an automated balance inquiry system that is available 24 hours
a day 365 days a year which may be accessed by Franchisee by a toll
free telephone number.
To effectuate the Program, the Franchisee will have an account which is
credited and debited with certain amounts. Those credits and debits are as
follows:
1. If a Verifone Terminal/Printer package is to be supplied by GCS to
Franchisee, as described below, GCS shall bill the Franchisee $225.00
for each such package. Said amount shall be due with the first monthly
payment, as set forth below.
2. There will be a transaction fee for each transaction which is performed
with respect to a Gift Card issued as part of the program. The
transaction fee shall be $.16 per transaction, and shall be charged for
each transaction performed by the Franchisee. The cumulative amount of
the transaction fees for a particular month shall be paid as part of
the payment to be made pursuant to the terms of this Agreement. A
"transaction" shall be defined as the initial activation of a Gift Card
and each respective use of a Gift Card for the purchase of product from
a participating store. In addition, a transaction shall include the
payment of any inactivity fee which is debited against a Gift Card.
-1-
3. In addition to the transaction fee, a fee of $.04 per transaction will
be charged, and this amount will be added to an insurance account
established for the payment of delinquent franchise payments. The
insurance account which these fees are added to shall be owned by
Franchisor, and all amounts paid to this account shall be under the
control of Franchisor. The cumulative amount of the insurance account
fees for a particular month shall be paid as part of the payment to be
made pursuant to the terms of the Agreement.
4. Each Gift Card which is purchased as part of this program and which is
not completely used on the date which is the later of one (1) year from
the initial purchase of the Gift Card or one (1) year from the last
time the customer added cash to the value of the Gift card shall be
assessed a fee of $2.00 on such date which shall be debited against the
remaining value of the Gift Card. This fee shall be applied thereafter
for each additional month until the earlier of the customer adding
additional cash to the Gift Card or until the remaining balance of the
Gift Card is $0.00. The $2.00 inactivity fee shall be credited to the
Franchisee if the Gift Card was purchased at a Franchisee's store.
5. GCS may modify any of the aforementioned fees, except the insurance
account fee, to cover any cost increases incurred by GCS when material
cost increases are sustained from non-related third party vendors that
provide support services to GCS. These price changes can only take
place once in each contract year upon sixty (60) days' prior written
notice to the Franchisee. GCS will not have the power to modify the
insurance account fee, but this fee may be modified by Franchisor,
provided the fee may not be greater than $.04 per transaction.
6. GCS will maintain and provide monthly reports of the amounts due from
the Franchisee. The Franchisee's account shall be debited with an
amount equal to the value of all Gift Cards sold at the Franchisee's
stores and all fees which are due from a Franchisee as set forth in
this Agreement. The Franchisee's account will be credited with an
amount equal to the value of all product purchased from the
Franchisee's store using a Gift Card and all inactivity fees which are
attributed to the Franchisee. The resulting difference as of the last
day of each month will be the monthly amount which is due to or from
the Franchisee. This amount will be collected from or paid to a
participant as set forth below.
7. GCS shall be solely responsible for the accuracy of all account
management with regard to the Gift Cards. Any error in the account
management shall be the sole liability of GCS and GCS shall bear the
cost of any such error. By way of example and not limitation, if a
$10.00 Gift Card is sold and entered into the terminal for $10.00 and
GCS accounts for the Gift Card at $100.00, GCS shall be solely
responsible for the $90.00 discrepancy.
Franchisee is responsible for providing an electronic card issuing
terminal that is compatible with and can interface with the GCS system to be
used for this Program. GCS will assist Franchisee by programming Franchisee's
individual terminal for a fee of $150.00. GCS will maintain adequate
communication lines for both Franchisee's issuing terminal and verification
terminal. A Verifone Terminal package may be purchased from GCS for Two Hundred
Twenty Five Dollars ($225.00). This amount shall be due with the first monthly
payment, as described above.
CS has contracted with Stored Value Systems, Inc. to provide account services
for the Program. Franchisee agrees to have a bank account which will be used to
either withdraw funds that are due from the Franchisee for the Program or into
which funds will be deposited if they are due to Franchisee under the Program.
The Franchisee agrees to execute the attached ACH Authorization Form to allow
Stored Value Systems to electronically debit and credit Franchisee's account. In
the event Franchisee has insufficient funds to pay any amount due hereunder and
such amount is collected from the insurance account referred to above or from
Buffalo Wild Wings, Inc., the paying party shall have the right to recover the
amount paid from Franchisee and Franchisee shall pay said amount to the party
paying the amount due from Franchisee.
-2-
Agreed to this_______ day of______________________ , 2006.
FRANCHISEE:
_____________________________________
By: ________________________________
Its:_____________________________
_____________________________________
By: ________________________________
Its:_____________________________
Franchisee Legal Business Name: _____________________________________
Franchisee's Address: _____________________________________
SASH Management, LLC, a Utah Limited Liability Company
_____________________________________
By: ________________________________
Its:_____________________________
-3-
Appendix F to the Franchise Agreement
BUFFALO WILD WINGS(R)
ENROLLMENT FORM AND PORTAL TERMS AND CONDITIONS
WHAT IS THE PORTAL?
The portal has been designed to provide franchisees with a preliminary real
estate analysis of a proposed location. Franchisees are able to gather the
required data from one central source by leveraging the power of this portal.
The following maps and reports are created as part of the site evaluation
package:
a. Site Overview Map
b. Competition and Co-Tenants Map
c. Daytime Employment Map
d. Traffic Volumes Map
e. Medium Household Income Map
f. Mosaic Index Map
g. Owner Occupied Units Map
h. Population & Daytime Employment Map
i. 3-5-7 Minute Drive Time Map
j. Demographic Report
k. Traffic Location Report
l. Trade Area Rating Report
HOW DO I GET STARTED?
Once you have enrolled, you will receive a Welcome Kit from geoVue in the mail.
This kit will contain: a User Guide, Frequently Asked Questions, your user name
and password and other information. Your account will be set up with credits
that are redeemed for site packages. Each time you process a request for a
package, your account will be decremented. You must purchase site packages in
blocks of three.
The maps and reports will be available to you in PDF form via email and through
the portal itself. You will have one year to use the credits you have purchased.
ENROLLMENT FORM
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Name City
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Company Name State
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Company Address Zip
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Email Address Telephone
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SITE PACKAGES
Each site package includes the maps and reports in proper form for submission to
corporate. Each site is measured against a pre-determined set of benchmarks.
PAYMENT METHOD
Each package is $400, available in blocks of three (3) for a total of $1,200.
[_] Enclosed is a check for $1,200 made payable to geoVue, Inc.
[_] Please bill my credit card (Visa, MC or Amex)
Card Number ___________________________________________
Expirations Date_______________________________________
Full Name on Card______________________________________
By signing below and using the geoVue Portal products, you agree, for yourself
and any applicable entities that all services and products are provided subject
to the Portal Terms and Conditions, printed on the following page.
Non-refundable payment is due upon placement of order. In certain states, this
order will be subject to state tax.
Print Name:__________________________________________
Title:_______________________________________________
Signature:___________________________________________ Date:______________
Upon completing this form, please either fax back to (617) 482-3066 or mail to
geoVue, Inc., Attn: Sales, 200 Lincoln Street, Boston, MA 02111. If you require
any additional information, please feel free to call us at 1-800-554-5150.
PORTAL TERMS AND CONDITIONS
1. Acceptance of Terms
These terms and conditions apply to and govern your use of the geoVue software
and online products, including the Portal available through web sites owned or
controlled by geoVue (collectively, the "Products"). Your use of the Products
signifies your agreement to be bound by these terms and conditions in their
entirety. If you do not agree to be bound by these terms and conditions, you may
not access or otherwise use the Products. You are responsible for obtaining and
paying for the hardware, software, and Internet access required for you to use
the Products. The Products are only to be used within the United States of
America. You acknowledge that transmissions to and from geoVue are not
confidential and your Communications may be read or intercepted by others. At
geoVue's sole discretion, anyone determined to have violated these Terms and
Conditions may be barred, without notice, from using the Products.
2. Limited License
geoVue grants you a non-exclusive, non-transferable, limited right to access,
use and display the Products and content and the materials thereon only for your
business use as described herein, provided that you comply fully with these
terms and conditions. You shall not interfere or attempt to interfere with the
operation of the Products in any way through any means or device including, but
not limited to, spamming, hacking, uploading computer viruses or time bombs, or
the means expressly prohibited by any provision of these terms and conditions.
The license, unless otherwise specified, is for utilization by a single user or
a single-user workstation at any one time. You shall not use or permit the use
of Products for the benefit of any other entities.
3. Changes to Terms and Conditions
geoVue reserves the right, at its sole discretion, to change, modify, add or
remove any portion of these terms and conditions, in whole or in part, at any
time upon written notice. Your continued use of the Products after any changes
to these terms and conditions will be considered acceptance of those changes.
4. Ownership; Restrictions
geoVue owns, controls, licenses or has the right to use and provide the Products
and all material in the Products, including, without limitation, text, images,
articles, photographs, illustrations, audio and video clips, (collectively the
"Content"). All Products and Content are Copyright (C) 2004 geoVue, Inc.,
protected pursuant to U.S. copyright laws, international conventions, and other
copyright laws. You agree to abide by any and all copyright notices, information
or restrictions displayed on the Products. Except as expressly provided herein,
you may not use the Products and Content, and geoVue reserves all copyrights
therein. All Business logos are the registered trademarks of their respective
owners. All rights reserved. You are responsible for complying with all
applicable laws, rules and regulations regarding your use of the Products and
Content. In the event of any permitted publication of material from the
Products, no changes in or deletion of author attribution, trademark, legend or
copyright notice shall be made.
5. Indemnification
You agree that you shall indemnify, defend and hold harmless geoVue, and its
officers, directors, owners, agents, employees, Content providers, affiliates,
and licensors (collectively, the "Indemnified Parties") from and against any and
all losses, damages, liabilities, and claims and all fees, costs, expenses, of
any kind related thereto (including, without limitation, reasonable attorneys'
fees) incurred by the Indemnified Parties in connection with any claim arising
out of, based upon or resulting from your use of the Products or Content geoVue
reserves the right, at its own expense, to assume the exclusive defense and
control of any matter otherwise subject to indemnification by you and you shall
not in any event settle any matter without the written consent of geoVue.
6. Links to Other Web Pages
The Products may contain links and pointers to the other related World Wide Web
Internet pages, resources, and sponsors of the Products. Links to or from any
Products and third-party sites, maintained by third parties, do not constitute
an endorsement by geoVue or any of its subsidiaries and affiliates of any
third-party resources or their contents. Links do not imply that geoVue is
affiliated or associated with or/is legally authorized to use any trademark,
trade name, logo or copyright symbol displayed in or accessible through the
links, or that any linked web sites are authorized to use any trademark, trade
name, logo or copyright symbol of geoVue, any of their affiliates or licensors.
7. Disclaimer of Warranties and Damages; Limitation of Liability
The site selection package is a preliminary report and assessment based upon
data available on geoVue's databases. It is provided without representation or
warranty. Not all retailers, competitors, employers, or streets were reviewed.
Acceptable sites may not be available on favorable terms within the indicated
areas. The assessment may be (or become) inaccurate due to changing demographic
and economic conditions; opening and closing of retailers, employers and
competitors; modifications to roads and other transportation systems; and other
causes. It is your responsibility to fully analyze the indicated area to remain
aware of the changes in it, and to seek locations that are the most
advantageous. Upon delivery of the purchased site selection reports, you will no
longer have access to any data or information you had previously created,
maintained, managed, or stored in Products. geoVue is under no obligation to
maintain any such data or information. Your obligations pursuant to Section 1
(Acceptance of the Terms), Section 2 (Limited License), Section 4 (Ownership;
Restrictions), Section 5 (Indemnification), Section 7 (Disclaimer of Warranties
and Damages; Limitation of Liability), and Section 8 (General Provisions) shall
survive the termination of your use of the Products. THE PRODUCTS, INCLUDING ALL
CONTENT, SOFTWARE, FUNCTIONS, MATERIALS AND INFORMATION MADE AVAILABLE ON OR
ACCESSED THROUGH THE PRODUCTS, ARE PROVIDED ON AN "AS IS," "AS AVAILABLE" BASIS,
WITHOUT REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE. NEITHER geoVue NOR ITS CONTENT PROVIDERS WARRANT THAT THE
FUNCTIONS, FEATURES OR CONTENT CONTAINED IN THE PRODUCTS WILL BE UNINTERRUPTED
OR ERROR FREE, THAT DEFECTS WILL BE CORRECTED, OR THAT ANY OTHER PRODUCTS OR THE
SERVERS) THAT MAKE THEM AVAILABLE ARE FREE OF VIRUSES OR OTHER HARMFUL
COMPONENTS; NOR DO THEY MAKE ANY WARRANTY OR REPRESENTATION AS TO THE ACCURACY
OR RELIABILITY OF THE PRODUCTS, THE CONTENT THEREOF, THE MATERIALS, INFORMATION
AND FUNCTIONS MADE ACCESSIBLE BY THE SOFTWARE USED ON OR ACCESSED THROUGH THE
PRODUCTS, ANY PRODUCTS OR SERVICES OR HYPERTEXT LINKS TO THIRD PARTIES OR FOR
ANY BREACH OF SECURITY ASSOCIATED WITH THE TRANSMISSION OF SENSITIVE INFORMATION
THROUGH THE PRODUCTS OR ANY LINKED PRODUCTS. geoVue AND ITS SUBSIDIARIES AND
AFFILIATES MAKE NO WARRANTIES AND SHALL NOT BE LIABLE FOR THE USE OF THE
PRODUCTS, INCLUDING WITHOUT LIMITATION. THE CONTENT AND ANY ERRORS CONTAINED
THEREIN UNDER ANY DIRECT OR INDIRECT CIRCUMSTANCES, INCLUDING BUT NOT LIMITED TO
geoVue's NEGLIGENCE. IF YOU ARE DISSATISFIED WITH THE PRODUCTS OR ANY MATERIALS
ON THE PRODUCTS, YOUR SOLE REMEDY FOR ALL OF THE FOREGOING SHALL BE LIMITED TO
THE GREATER OF THE AMOUNT ACTUALLY PAID FOR BY YOU FOR THE PRODUCTS OR FIVE
DOLLARS (USD $5.00). UNDER NO CIRCUMSTANCES SHALL geoVue, ITS SUBSIDIARIES,
AFFILIATES OR CONTENT PROVIDERS BE LIABLE FOR ANY SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES THAT ARE DIRECTLY OR INDIRECTLY RELATED TO THE USE OF, OR
THE INABILITY TO USE, THE CONTENT, MATERIALS AND FUNCTIONS IN THE PRODUCTS,
INCLUDING WITHOUT LIMITATION LOSS OF REVENUE OR ANTICIPATED PROFITS OR LOST
BUSINESS, EVEN IF SUCH ENTITIES OR AN AUTHORIZED REPRESENTATIVE THEREOF HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. SOME STATES DO NOT ALLOW THE
EXCLUSION OR LIMITATION OF INCIDENTAL OR CONSEQUENTIAL DAMAGES, SO THE ABOVE
LIMITATION OR EXCLUSION MAY NOT APPLY TO YOU. IN NO EVENT SHALL THE TOTAL
LIABILITY OF geoVue, ITS SUBSIDIARIES AND AFFILIATES TO YOU FOR ALL DAMAGES,
LOSSES, AND CAUSES OF ACTION (WHETHER IN CONTRACT OR TORT, INCLUDING, BUT NOT
LIMITED T0, NEGLIGENCE OR OTHERWISE) ARISING FROM THESE TERMS AND CONDITIONS OR
YOUR USE OF THE PRODUCTS EXCEED, IN THE AGGREGATE, ONE HUNDRED DOLLARS (USD
$100.00).
8. General Provisions
These terms and conditions shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts, without regard to conflicts of
laws provisions. The sole and exclusive jurisdiction for any action or
proceeding arising out of or related to these terms and conditions shall be an
appropriate State or Federal court located in the Commonwealth of Massachusetts
and you hereby irrevocably consent to the jurisdiction of such courts. If for
any reason a court of competent jurisdiction finds any provision of these terms
and conditions, or portion thereof, to be unenforceable, that provision shall be
enforced to the maximum extent permissible so as to effect the intent of these
terms and conditions, and the remainder of these terms and conditions shall
continue in full force and effect. These terms and conditions constitute the
entire agreement between you and geoVue with respect to the subject matter
hereof, and supersede all previous written or oral agreements between the
parties with respect to such subject matter. No waiver by either you or geoVue
of any breach or default hereunder shall be deemed to be a waiver of any
preceding or subsequent breach or default. The section headings used herein are
for convenience only and shall not be given any legal import.
ADDENDUM TO
BUFFALO WILD WINGS(R)
FRANCHISE AGREEMENT FOR THE
STATE OF ILLINOIS
This Addendum pertains to franchises sold in the State of Illinois and is for
the purpose of complying with Illinois statutes and regulations. Notwithstanding
anything which may be contained in the body of the Franchise Agreement to the
contrary, the Agreement is amended to include the following:
1. Section 41 of the Illinois Franchise Disclosure Act states that "any
condition, stipulation or provision purporting to bind any person acquiring any
franchise to waive compliance with any provision of this Act is void."
Accordingly, the fourth and fifth sentences of Section 15.B of the Agreement are
hereby deleted in their entirety.
2. Section 15.B of the Agreement is hereby amended to include the following:
Nothing in this Section 15.B, however, may be construed to
mean that you may not rely on the BUFFALO WILD WINGS Offering
Circular that we provided to you in connection with the offer
and purchase of your BUFFALO WILD WINGS Business. Although the
statements in the Offering Circular do not become part of the
Franchise Agreement, nothing in the Offering Circular may
contradict or be inconsistent with the contract terms.
3. The first sentence of Section 15.I is hereby deleted in its entirety, and the
following substituted in lieu thereof:
Subject to Section 12.A, any cause of action, claim, suit or
demand allegedly arising from or related to the terms of this
Agreement or the relationship of the parties must be brought
in the Illinois federal or state court for the Designated Area
in which you are located.
4. Section 15.H(1) is deleted in its entirety and replaced with the following:
Applicable Law and Waiver. Subject to our rights under federal
trademark laws and the parties' rights under the Federal
Arbitration Act in accordance with Paragraph 12 of this
Agreement, the parties' rights under this Agreement, and the
relationship between the parties is governed by, and will be
interpreted in accordance with, the laws of Illinois.
5. As stated in the text of the Acknowledgment Addendum, representations
contained in the Acknowledgment Addendum are not intended for nor shall they act
as a release, estoppel or waiver of rights that you as a franchisee have or
liabilities that you may incur under the Illinois Franchise Disclosure Act, 815
IL ss. 705.
6. Except as amended herein, the Franchise Agreement will be construed and
enforced in accordance with its terms.
Each of the undersigned hereby acknowledges having read and understood this
Addendum and consents to be bound by all of its terms.
YOU: US:
BUFFALO WILD WINGS INTERNATIONAL, INC.
______________________________________
_____________________________________ By: Sally J. Smith
By: ________________________________ --------------
Its:_____________________________ President & CEO
_____________________________________
By: ________________________________
Its:_____________________________
ADDENDUM TO
BUFFALO WILD WINGS(R)
FRANCHISE AGREEMENT FOR THE
STATE OF MARYLAND
This Addendum pertains to franchises sold in the State of Maryland and is for
the purpose of complying with Maryland statutes and regulations. Notwithstanding
anything which may be contained in the body of the Franchise Agreement to the
contrary, the Agreement is amended as follows:
1. The following sentence is added to the end of Section 14.C:
Notwithstanding the preceding sentence, any claims arising
under the Maryland Franchise Registration and Disclosure Law
must be brought within three years after the date of this
Agreement.
2. The following sentence is hereby added to the end of Section 11.D.6:
Nothing in this Section 11.D.6, however, will act as a
release, estoppel or waiver of any liability incurred under
the Maryland Franchise Registration and Disclosure Law.
3. The following sentence is hereby added to the end of Section 15.B:
Nothing in this Section 15.B, however, will act as a release,
estoppel or waiver of any liability incurred under the
Maryland Franchise Registration and Disclosure Law.
4. Section 15.I is amended to provide that you may bring a lawsuit in Maryland
for claims arising under the Maryland Franchise Registration and Disclosure Law.
Section 15.I is further amended to provide that any claims arising under the
Maryland Franchise Registration and Disclosure Law must be brought within three
(3) years after the date of the Franchise Agreement.
5. Any provision in the Agreement that requires you to disclaim the occurrence
and/or acknowledge the non occurrence of acts that would constitute a violation
of the Maryland Franchise Registration and Disclosure Law is not intended to nor
will it act as a release, estoppel or waiver of any liability incurred under the
Maryland Franchise Registration and Disclosure Law.
6. Except as amended herein, the Franchise Agreement will be construed and
enforced in accordance with its terms.
Each of the undersigned hereby acknowledges having read and understood this
Addendum and consents to be bound by all of its terms.
YOU: WE:
BUFFALO WILD WINGS INTERNATIONAL, INC.
______________________________________
_____________________________________ By: Sally J. Smith
By: ________________________________ --------------
Its:_____________________________ President & CEO
_____________________________________
By: ________________________________
Its:_____________________________
RELEASE OF CLAIMS
For and in consideration of the agreements and covenants described
below, Buffalo Wild Wings International, Inc. ("BWW") and ("Franchisee") enter
into this Release of Claims ("Agreement").
RECITALS
A. BWW and Franchisee entered into a BUFFALO WILD WINGS(R) Franchise
Agreement dated __________, ____________.
B. [NOTE: Describe the circumstances relating to the release.]
C. Subject to and as addressed with greater specificity in the terms
and conditions set forth below, BWW and Franchisee now desire to settle any and
all disputes that may exist between them relating to the Franchise Agreement.
AGREEMENTS
1. CONSIDERATION. [NOTE: Describe the consideration paid.]
2-3. [NOTE: Detail other terms and conditions of the release.]
4. RELEASE OF CLAIMS BY BWW. In consideration of, and only upon full
payment of $________ to BWW, and the other terms and conditions of this
Agreement, the receipt and sufficiency of which is hereby acknowledged, BWW, for
itself, its parent company and for each of its affiliated corporations,
subsidiaries, divisions, insurers, indemnitors, attorneys, successors, and
assigns, together with all of its past and present directors, officers,
employees, attorneys, agents, assigns and representatives does hereby release
and forever discharge Franchisee and each of his heirs, executors, successors,
and assigns of and from any and all actions, suits, proceedings, claims
(including, but not limited to, claims for attorney's fees), complaints,
judgments, executions, whether liquidated or unliquidated, known or unknown,
asserted or unassorted, absolute or contingent, accrued or not accrued,
disclosed or undisclosed, related to the Franchise Agreement. This release does
not release Franchisee from any obligations he may have under this Agreement.
5. RELEASE OF CLAIMS BY FRANCHISEE. In consideration of the other terms
and conditions of this Agreement, the receipt and sufficiency of which is hereby
acknowledged, Franchisee, for himself and for each of his heirs, executors,
administrators, insurers, attorneys, agents, representatives, successors, and
assigns, does hereby release and forever discharge Buffalo Wild Wings
International, Inc., its parent company and each of its respective affiliated
corporations, subsidiaries, divisions, insurers, indemnitors, attorneys,
successors, and assigns, together with all of their past and present directors,
officers, employees, attorneys, agents, assigns and representatives in their
capacities as such, of and from any and all actions, suits, proceedings, claims
(including, but not limited to, claims for attorney's fees), complaints,
charges, judgments, executions, whether liquidated or unliquidated, known or
unknown, asserted or unasserted, absolute or contingent, accrued or not accrued,
related to the Franchise Agreement.
6. RESERVATION OF CLAIMS AGAINST NON-SETTLING PARTIES. Buffalo Wild
Wings International, Inc. and Franchisee expressly reserve their right and
claims against any non-settling persons, firms, corporations, or other entities
for whatever portion or percentage their damages are found to be attributable to
the wrongful conduct of said non-settling parties.
7. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties relative to the subject matter contained herein, and all
prior understandings, representations and agreements made by and between the
parties relative to the contents contained in this Agreement are merged into
this Agreement.
8. VOLUNTARY NATURE OF AGREEMENT. The parties acknowledge and agree
that they have entered into this Agreement voluntarily and without any coercion.
The parties further represent that they have had the opportunity to consult with
an attorney of their own choice, that they have read the terms of this
Agreement, and that they fully understand and voluntarily accept the terms.
9. GOVERNING LAW AND JURISDICTION. This Agreement will be construed and
enforced in accordance with the law of the state of ____________.
10. ATTORNEYS' FEES. All rights and remedies under this Agreement shall
be cumulative and none shall exclude any other right or remedy allowed by law.
In the event of a breach of this Agreement that requires one of the parties to
enforce the terms and conditions of this Agreement, the non-prevailing party
shall pay the prevailing party's attorneys' fees and costs incurred by reason of
the breach.
BUFFALO WILD WINGS INTERNATIONAL, INC.
Date: __________________,2006
______________________________________
By: Sally J. Smith
--------------
Its: President & CEO
FRANCHISEE:
By: ________________________________
Date: __________________,2006 Its:______________________________
ADDENDUM TO
BUFFALO WILD WINGS(R)
FRANCHISE AGREEMENT FOR THE
STATE OF MINNESOTA
This Addendum pertains to franchises sold in the State of Minnesota and is for
the purpose of complying with Minnesota statutes and regulations.
Notwithstanding anything which may be contained in the body of the Franchise
Agreement to the contrary, the Agreement is amended as follows:
1. We will undertake the defense of any claim of infringement by third parties
involving the BUFFALO WILD WINGS mark, and you will cooperate with the defense
in any reasonable manner prescribed by us with any direct cost of such
cooperation to be borne by us.
2. Minnesota law provides franchisees with certain termination and nonrenewal
rights. As of the date of this Franchise Agreement, Minn. Stat. Sec. 80C.14,
Subd. 3, 4 and 5 require, except in certain specified cases, that a franchisee
be given 90 days notice of termination (with 60 days to cure) and 180 days
notice for nonrenewal of the franchise agreement.
3. The second sentence of Section 12.B of the Agreement is deleted in its
entirety and will have no further force and effect and the following is
substituted in lieu thereof:
Therefore, it is mutually agreed that in the event of a breach
or threatened breach of any of the terms of this Agreement by
you, we will forthwith be entitled to seek an injunction
restraining such breach or to a decree of specific
performance, without showing or proving any actual damage,
together with recovery of reasonable attorneys' fees and other
costs incurred in obtaining said equitable relief, until such
time as a final and binding determination is made by the
arbitrators.
4. Section 15.J is hereby deleted in its entirety.
5. No release language set forth in the Franchise Agreement shall relieve
Franchisor or any other person, directly or indirectly, from liability imposed
by the laws concerning franchising in the State of Minnesota, provided, that
this part will not bar the voluntary settlement of disputes.
6. Except as amended herein, the Franchise Agreement will be construed and
enforced in accordance with its terms.
Each of the undersigned hereby acknowledges having read and understood this
Addendum and consents to be bound by all of its terms.
YOU: WE:
BUFFALO WILD WINGS INTERNATIONAL, INC.
______________________________________
_____________________________________ By: Sally J. Smith
By: ________________________________ --------------
Its:_____________________________ Its: President & CEO
_____________________________________
By: ________________________________
Its:_____________________________
ADDENDUM TO
BUFFALO WILD WINGS(R)
FRANCHISE AGREEMENT FOR THE
STATE OF NORTH DAKOTA
This Addendum pertains to franchises sold in the State of North Dakota and is
for the purpose of complying with North Dakota statutes and regulations.
Notwithstanding anything which may be contained in the body of the Franchise
Agreement to the contrary, the Agreement is amended to include the following:
1. Notwithstanding anything contained in Section 12.A of the Franchise
Agreement, any arbitration proceeding must take place in the city nearest to the
your Business in which the American Arbitration Association maintains an office
and facility for arbitration, or at such other location as may be mutually
agreed upon by the parties.
2. Covenants not to compete such as those mentioned in Sections 10.D of the
Franchise Agreement may be subject to Section 9-08-06 of the North Dakota
Century Code and unenforceable in the State of North Dakota if contrary to
Section 9-08-06.
3. The North Dakota Securities Commissioner has held that requiring franchisees
to consent to the jurisdiction of courts outside of North Dakota is unfair,
unjust or inequitable within the intent of Section 51-19-09 of the North Dakota
Franchise Investment Law. The first sentence of Section 15.I is therefore
deleted in its entirety, and the following substituted in lieu thereof:
Any cause of action, claim, suit or demand allegedly arising
from or related to the terms of this Agreement or the
relationship of the parties that is not subject to arbitration
under Paragraph 12 must be brought in the Federal District
Court for the District of Minnesota or in Hennepin County
District Court, Fourth Judicial District, Minneapolis,
Minnesota or the federal or state court of the Designated Area
in which the you are located.
4. Section 15.J is hereby deleted from the Franchise Agreement, as a waiver of
punitive damages is considered unenforceable in the State of North Dakota.
5. Pursuant to Section 51-19-09 of the North Dakota Franchise Investment Law, a
franchisee may not be required to sign a general release as a condition of
renewal under Section 4.B of the Franchise Agreement.
6. Except as amended herein, the Franchise Agreement will be construed and
enforced in accordance with its terms.
Each of the undersigned hereby acknowledges having read and understood this
Addendum and consents to be bound by all of its terms.
YOU: WE:
BUFFALO WILD WINGS INTERNATIONAL, INC.
______________________________________
_____________________________________ By: Sally J. Smith
By: ________________________________ --------------
Its:_____________________________ Its: President & CEO
_____________________________________
By: ________________________________
Its:_____________________________
_____________________________________
By: ________________________________
Its:_____________________________
ADDENDUM TO
BUFFALO WILD WINGS(R)
FRANCHISE AGREEMENT FOR THE
STATE OF WASHINGTON
This Addendum pertains to franchises sold in the State of Washington
and is for the purpose of complying with Washington statutes and regulations.
Notwithstanding anything which may be contained in the body of the Franchise
Agreement to the contrary, the Agreement is amended to include the following:
1. Section 15.B of the Franchise Agreement is amended by the addition of the
following language:
If any of the provisions in the Franchise Offering Circular or
Franchise Agreement are inconsistent with the relationship provisions
of R.C.W. 19.100.180 or other requirements of the Washington Franchise
Investment Protection Act, the provisions of the Act will prevail over
the inconsistent provisions of the Franchise Offering Circular and
Franchise Agreement with regard to any franchise sold in Washington.
2. The second sentence of Section 12.A is hereby deleted in its entirety and the
following substituted in lieu thereof
The arbitration must take place either in the state of
Washington, or in a place mutually agreed upon at the time of the
arbitration, or as determined by the arbitrator.
3. Paragraph 16 of the Franchise Agreement is amended by the addition of the
following language:
A release or waiver of rights executed by you will not include
rights under the Washington Franchise Investment Protection Act except
when executed pursuant to a negotiated settlement after the agreement
is in effect and where the parties are represented by independent
counsel. Provisions such as those which unreasonably restrict or limit
the statute of limitations period for claims under the Act, rights or
remedies under the Act such as a right to a jury trial may not be
enforceable.
4. Except as amended herein, the Franchise Agreement will be construed and
enforced in accordance with its terms.
Each of the undersigned hereby acknowledges having read and understood this
Addendum and consents to be bound by all of its terms.
YOU: WE:
BUFFALO WILD WINGS INTERNATIONAL, INC.
______________________________________
_____________________________________ By: Sally J. Smith
By: ________________________________ --------------
Its:_____________________________ Its: President & CEO
_____________________________________
By: ________________________________
Its:_____________________________
_____________________________________
By: ________________________________
Its:_____________________________
ADDENDUM TO
BUFFALO WILD WINGS(R)
FRANCHISE AGREEMENT FOR THE
STATE OF WISCONSIN
This Addendum pertains to franchisees in the State of Wisconsin and is for the
purpose of complying with Wisconsin statutes and regulations. Notwithstanding
anything which may be contained in the body of the Franchise Agreement to the
contrary, the Agreement is amended to include the following:
1. Notwithstanding anything which may be contained in the body of the Franchise
Agreement to the contrary, Section 13.B of the Agreement pertaining to
"Termination by Us" is extended as follows:
We will provide you at least 90 days' prior written notice of
termination, cancellation, or substantial change in competitive
circumstances. The notice will state all the reasons for termination,
cancellation, or substantial change in competitive circumstances and
will provide that you have 60 days in which to rectify any claimed
deficiency. If the deficiency is rectified within 60 days, the notice
will be void. If the reason for termination, cancellation, or
substantial change in competitive circumstances is nonpayment of sums
due under the franchise, you will be entitled to written notice of such
default, and will have not less than 10 days in which to remedy such
default from the date of delivery or posting of such notice.
2. Ch. 135, Stats., the Wisconsin Fair Dealership Law, supersedes any provisions
of this Agreement or a related document between you and us inconsistent with the
Law.
3. Except as amended herein, the Franchise Agreement will be construed and
enforced in accordance with its terms.
Each of the undersigned hereby acknowledges having read and understood this
Addendum and consents to be bound by all of its terms.
FRANCHISEE: FRANCHISOR:
BUFFALO WILD WINGS INTERNATIONAL, INC.
______________________________________
_____________________________________ By: Sally J. Smith
By: ________________________________ --------------
Its:_____________________________ Its: President & CEO
_____________________________________
By: ________________________________
Its:_____________________________
_____________________________________
By: ________________________________
Its:_____________________________
ACKNOWLEDGMENT ADDENDUM TO
BUFFALO WILD WINGS(R) FRANCHISE AGREEMENT
As you know, you and we are entering into a Franchise Agreement for the
operation of a BUFFALO WILD WINGS(R) franchise. The purpose of this
Acknowledgment Addendum is to determine whether any statements or promises were
made to you that we have not authorized or that may be untrue, inaccurate or
misleading, and to be certain that you understand the limitations on claims that
may be made by you by reason of the offer and sale of the franchise and
operation of your business. Please review each of the following questions
carefully and provide honest responses to each question.
ACKNOWLEDGMENTS AND REPRESENTATIONS*.
1. Did you receive a copy of our Offering Circular (and all exhibits and
attachments) at least 10 business days prior to signing the Franchise
Agreement? Check one: ( ) Yes ( ) No. If no, please comment:
_______________________________________________________________________
_______________________________________________________________________
1A. For Illinois residents or those wishing to locate their franchise in
Illinois, did you receive a copy of our Offering Circular (and all
exhibits and attachments) at least 14 calendar days prior to signing
the Franchise Agreement? Check one: ( ) Yes ( ) No. If no, please
comment:
_______________________________________________________________________
_______________________________________________________________________
2. Have you studied and reviewed carefully our Offering Circular and
Franchise Agreement? Check one: ( ) Yes ( ) No. If no, please comment:
_______________________________________________________________________
_______________________________________________________________________
3. Did you receive a copy of the Franchise Agreement at least 5 business
days prior to the date on which the Franchise Agreement was executed?
Check one: ( ) Yes ( ) No. If no, please comment:
_______________________________________________________________________
_______________________________________________________________________
4. Did you understand all the information contained in both the Offering
Circular and Franchise Agreement? Check one: ( ) Yes ( ) No. If no,
please comment:
_______________________________________________________________________
_______________________________________________________________________
5. Was any oral, written or visual claim or representation made to you
that contradicted the disclosures in the Offering Circular? Check one:
( ) Yes ( ) No. If yes, please state in detail the oral, written or
visual claim or representation:
_______________________________________________________________________
_______________________________________________________________________
6. Did any employee or other person speaking on behalf of Buffalo Wild
Wings International, Inc. make any oral, written or visual claim,
statement, promise or representation to you that stated, suggested,
predicted or projected sales, revenues, expenses, earnings, income or
profit levels at any BUFFALO WILD WINGS location or business, or the
likelihood of success at your franchised business? Check one: ( ) Yes (
) No. If yes, please state in detail the oral, written or visual claim
or representation:
7. Did any employee or other person speaking on behalf of Buffalo Wild
Wings International, Inc. make any statement or promise regarding the
costs involved in operating a franchise that is not contained in the
Offering Circular or that is contrary to, or different from, the
information contained in the Offering Circular. Check one: (__) Yes (__)
No. If yes, please comment:
_______________________________________________________________________
_______________________________________________________________________
8. Do you understand that that the franchise granted is for the right to
develop and operate the Restaurants in the Designated Territory, as
stated in Subparagraph 2.B, and that, according to Subparagraph 2.D, we
and our affiliates have the right to distribute products through
alternative methods of distribution and to issue franchises or operate
competing businesses for or at locations, as we determine, (i) outside
of your Designated Area using any trademarks; (ii) inside your
Designated Territory using any trademarks other than the BUFFALO WILD
WINGS Trademark; and (iii) inside the Designated Territory using the
BUFFALO WILD WINGS Trademark, for facilities at Special Sites and
facilities with interior areas less than 2,400 square feet (subject to
your right of first refusal as detailed in the Franchise Agreement)?
Check one: (__) Yes (__) No. If no, please comment:
_______________________________________________________________________
_______________________________________________________________________
9. Do you understand that the Franchise Agreement contains the entire
agreement between you and us concerning the franchise for the
Restaurant, meaning that any prior oral or written statements not set
out in the Franchise Agreement will not be binding? Check one: (__) Yes
(__) No. If no, please comment:
_______________________________________________________________________
_______________________________________________________________________
10. Do you understand that the success or failure of your Restaurant will
depend in large part upon your skills and experience, your business
acumen, your location, the local market for products under the BUFFALO
WILD WINGS trademarks, interest rates, the economy, inflation, the
number of employees you hire and their compensation, competition and
other economic and business factors? Further, do you understand that the
economic and business factors that exist at the time you open your
Business may change? Check one (__) Yes (__) No. If no, please comment:
_______________________________________________________________________
_______________________________________________________________________
11. Do you understand that you are bound by the non-compete covenants (both
in-term and post-term) listed in Subparagraph 10.D and that an
injunction is an appropriate remedy to protect the interests of the
BUFFALO WILD WINGS system if you violate the covenant(s)? Further, do
you understand that the term "you" for purposes of the non-compete
covenants is defined broadly in subparagraph 10.D, such that any actions
in violation of the covenants by those holding any interest in the
franchisee entity may result in an injunction, default and termination
of the Franchise Agreement? Check one (__) Yes (__) No. If no, please
comment:
_______________________________________________________________________
_______________________________________________________________________
YOU UNDERSTAND THAT YOUR ANSWERS ARE IMPORTANT TO US AND THAT WE WILL RELY ON
THEM. BY SIGNING THIS ADDENDUM, YOU ARE REPRESENTING THAT YOU HAVE CONSIDERED
EACH QUESTION CAREFULLY AND RESPONDED TRUTHFULLY TO THE ABOVE QUESTIONS. IF MORE
SPACE IS NEEDED FOR ANY ANSWER, CONTINUE ON A SEPARATE SHEET AND ATTACH.
NOTE: IF THE RECIPIENT IS A CORPORATION, PARTNERSHIP, LIMITED LIABILITY COMPANY
OR OTHER ENTITY, EACH OF ITS PRINCIPAL OWNERS MUST EXECUTE THIS ACKNOWLEDGMENT.
Signed:_____________________________________________
Print Name:_________________________________________
Date:_______________________________________________
APPROVED ON BEHALF OF
BUFFALO WILD WINGS INTERNATIONAL, INC.
By:__________________________________________________
Title: Sally J. Smith, President & CEO
_____________________________________________________
Date:
_____________________________________________________
*Such representations are not intended to nor shall they act as a release,
estoppel or waiver of any liability incurred under the Illinois Franchise
Disclosure Act or under the Maryland Franchise Registration and Disclosure Law.
ACKNOWLEDGMENT ADDENDUM TO
BUFFALO WILD WINGS(R) FRANCHISE AGREEMENT
As you know, you and we are entering into a Franchise Agreement for the
operation of a BUFFALO WILD WINGS(R) franchise. The purpose of this
Acknowledgment Addendum is to determine whether any statements or promises were
made to you that we have not authorized or that may be untrue, inaccurate or
misleading, and to be certain that you understand the limitations on claims that
may be made by you by reason of the offer and sale of the franchise and
operation of your business. Please review each of the following questions
carefully and provide honest responses to each question.
ACKNOWLEDGMENTS AND REPRESENTATIONS*.
1. Did you receive a copy of our Offering Circular (and all exhibits and
attachments) at least 10 business days prior to signing the Franchise
Agreement? Check one: ( ) Yes ( ) No. If no, please comment:
_______________________________________________________________________
_______________________________________________________________________
1A. For Illinois residents or those wishing to locate their franchise in
Illinois, did you receive a copy of our Offering Circular (and all
exhibits and attachments) at least 14 calendar days prior to signing the
Franchise Agreement? Check one: ( ) Yes ( ) No. If no, please comment:
2. Have you studied and reviewed carefully our Offering Circular and
Franchise Agreement? Check one: ( ) Yes ( ) No. If no, please comment:
_______________________________________________________________________
_______________________________________________________________________
3. Did you receive a copy of the Franchise Agreement at least 5 business
days prior to the date on which the Franchise Agreement was executed?
Check one: ( ) Yes ( ) No. If no, please comment:
_______________________________________________________________________
_______________________________________________________________________
4. Did you understand all the information contained in both the Offering
Circular and Franchise Agreement? Check one: ( ) Yes ( ) No. If no,
please comment:
_______________________________________________________________________
_______________________________________________________________________
5. Was any oral, written or visual claim or representation made to you
that contradicted the disclosures in the Offering Circular? Check one:
( ) Yes ( ) No. If yes, please state in detail the oral, written or
visual claim or representation:
_______________________________________________________________________
_______________________________________________________________________
6. Did any employee or other person speaking on behalf of Buffalo Wild
Wings International, Inc. make any oral, written or visual claim,
statement, promise or representation to you that stated, suggested,
predicted or projected sales, revenues, expenses, earnings, income or
profit levels at any BUFFALO WILD WINGS location or business, or the
likelihood of success at your franchised business? Check one: ( ) Yes (
) No. If yes, please state in detail the oral, written or visual claim
or representation:
_______________________________________________________________________
_______________________________________________________________________
7. Did any employee or other person speaking on behalf of Buffalo Wild
Wings International, Inc. make any statement or promise regarding the
costs involved in operating a franchise that is not contained in the
Offering Circular or that is contrary to, or different from, the
information contained in the Offering Circular. Check one: (__) Yes (__)
No. If yes, please comment:
_______________________________________________________________________
_______________________________________________________________________
8. Do you understand that that the franchise granted is for the right to
develop and operate the Restaurants in the Designated Territory, as
stated in Subparagraph 2.B, and that, according to Subparagraph 2.D, we
and our affiliates have the right to distribute products through
alternative methods of distribution and to issue franchises or operate
competing businesses for or at locations, as we determine, (i) outside
of your Designated Area using any trademarks; (ii) inside your
Designated Territory using any trademarks other than the BUFFALO WILD
WINGS Trademark; and (iii) inside the Designated Territory using the
BUFFALO WILD WINGS Trademark, for facilities at Special Sites and
facilities with interior areas less than 2,400 square feet (subject to
your right of first refusal as detailed in the Franchise Agreement)?
Check one: (__) Yes (__) No. If no, please comment:
_______________________________________________________________________
_______________________________________________________________________
9. Do you understand that the Franchise Agreement contains the entire
agreement between you and us concerning the franchise for the
Restaurant, meaning that any prior oral or written statements not set
out in the Franchise Agreement will not be binding? Check one: (__) Yes
(__) No. If no, please comment:
_______________________________________________________________________
_______________________________________________________________________
10. Do you understand that the success or failure of your Restaurant will
depend in large part upon your skills and experience, your business
acumen, your location, the local market for products under the BUFFALO
WILD WINGS trademarks, interest rates, the economy, inflation, the
number of employees you hire and their compensation, competition and
other economic and business factors? Further, do you understand that the
economic and business factors that exist at the time you open your
Business may change? Check one (__) Yes (__) No. If no, please comment:
_______________________________________________________________________
_______________________________________________________________________
11. Do you understand that you are bound by the non-compete covenants (both
in-term and post-term) listed in Subparagraph 10.D and that an
injunction is an appropriate remedy to protect the interests of the
BUFFALO WILD WINGS system if you violate the covenant(s)? Further, do
you understand that the term "you" for purposes of the non-compete
covenants is defined broadly in subparagraph 10.D, such that any actions
in violation of the covenants by those holding any interest in the
franchisee entity may result in an injunction, default and termination
of the Franchise Agreement? Check one (__) Yes (__) No. If no, please
comment:
_______________________________________________________________________
_______________________________________________________________________
YOU UNDERSTAND THAT YOUR ANSWERS ARE IMPORTANT TO US AND THAT WE WILL RELY ON
THEM. BY SIGNING THIS ADDENDUM, YOU ARE REPRESENTING THAT YOU HAVE CONSIDERED
EACH QUESTION CAREFULLY AND RESPONDED TRUTHFULLY TO THE ABOVE QUESTIONS. IF MORE
SPACE IS NEEDED FOR ANY ANSWER, CONTINUE ON A SEPARATE SHEET AND ATTACH.
NOTE: IF THE RECIPIENT IS A CORPORATION, PARTNERSHIP, LIMITED LIABILITY COMPANY
OR OTHER ENTITY, EACH OF ITS PRINCIPAL OWNERS MUST EXECUTE THIS ACKNOWLEDGMENT.
Signed:_____________________________________________
Print Name:_________________________________________
Date:_______________________________________________
APPROVED ON BEHALF OF
BUFFALO WILD WINGS INTERNATIONAL, INC.
By:__________________________________________________
Title: Sally J. Smith, President & CEO
_____________________________________________________
Date:
_____________________________________________________
*Such representations are not intended to nor shall they act as a release,
estoppel or waiver of any liability incurred under the Illinois Franchise
Disclosure Act or under the Maryland Franchise Registration and Disclosure Law.
ACKNOWLEDGMENT ADDENDUM TO
BUFFALO WILD WINGS(R) FRANCHISE AGREEMENT
As you know, you and we are entering into a Franchise Agreement for the
operation of a BUFFALO WILD WINGS(R) franchise. The purpose of this
Acknowledgment Addendum is to determine whether any statements or promises were
made to you that we have not authorized or that may be untrue, inaccurate or
misleading, and to be certain that you understand the limitations on claims that
may be made by you by reason of the offer and sale of the franchise and
operation of your business. Please review each of the following questions
carefully and provide honest responses to each question.
ACKNOWLEDGMENTS AND REPRESENTATIONS*.
1. Did you receive a copy of our Offering Circular (and all exhibits and
attachments) at least 10 business days prior to signing the Franchise
Agreement? Check one: ( ) Yes ( ) No. If no, please comment:
_______________________________________________________________________
_______________________________________________________________________
1A. For Illinois residents or those wishing to locate their franchise in
Illinois, did you receive a copy of our Offering Circular (and all
exhibits and attachments) at least 14 calendar days prior to signing the
Franchise Agreement? Check one: ( ) Yes ( ) No. If no, please comment:
_______________________________________________________________________
_______________________________________________________________________
2. Have you studied and reviewed carefully our Offering Circular and
Franchise Agreement? Check one: ( ) Yes ( ) No. If no, please comment:
______________________________________________________________________
_______________________________________________________________________
3. Did you receive a copy of the Franchise Agreement at least 5 business
days prior to the date on which the Franchise Agreement was executed?
Check one: ( ) Yes ( ) No. If no, please comment:
_______________________________________________________________________
_______________________________________________________________________
4. Did you understand all the information contained in both the Offering
Circular and Franchise Agreement? Check one: ( ) Yes ( ) No. If no,
please comment:
_______________________________________________________________________
_______________________________________________________________________
5. Was any oral, written or visual claim or representation made to you
that contradicted the disclosures in the Offering Circular? Check one:
( ) Yes ( ) No. If yes, please state in detail the oral, written or
visual claim or representation:
_______________________________________________________________________
_______________________________________________________________________
6. Did any employee or other person speaking on behalf of Buffalo Wild
Wings International, Inc. make any oral, written or visual claim,
statement, promise or representation to you that stated, suggested,
predicted or projected sales, revenues, expenses, earnings, income or
profit levels at any BUFFALO WILD WINGS location or business, or the
likelihood of success at your franchised business? Check one: ( ) Yes (
) No. If yes, please state in detail the oral, written or visual claim
or representation:
_______________________________________________________________________
_______________________________________________________________________
7. Did any employee or other person speaking on behalf of Buffalo Wild
Wings International, Inc. make any statement or promise regarding the
costs involved in operating a franchise that is not contained in the
Offering Circular or that is contrary to, or different from, the
information contained in the Offering Circular. Check one: (__) Yes (__)
No. If yes, please comment:
_______________________________________________________________________
_______________________________________________________________________
8. Do you understand that that the franchise granted is for the right to
develop and operate the Restaurants in the Designated Territory, as
stated in Subparagraph 2.B, and that, according to Subparagraph 2.D, we
and our affiliates have the right to distribute products through
alternative methods of distribution and to issue franchises or operate
competing businesses for or at locations, as we determine, (i) outside
of your Designated Area using any trademarks; (ii) inside your
Designated Territory using any trademarks other than the BUFFALO WILD
WINGS Trademark; and (iii) inside the Designated Territory using the
BUFFALO WILD WINGS Trademark, for facilities at Special Sites and
facilities with interior areas less than 2,400 square feet (subject to
your right of first refusal as detailed in the Franchise Agreement)?
Check one: (__) Yes (__) No. If no, please comment:
_______________________________________________________________________
_______________________________________________________________________
9. Do you understand that the Franchise Agreement contains the entire
agreement between you and us concerning the franchise for the
Restaurant, meaning that any prior oral or written statements not set
out in the Franchise Agreement will not be binding? Check one: (__) Yes
(__) No. If no, please comment:
_______________________________________________________________________
_______________________________________________________________________
10. Do you understand that the success or failure of your Restaurant will
depend in large part upon your skills and experience, your business
acumen, your location, the local market for products under the BUFFALO
WILD WINGS trademarks, interest rates, the economy, inflation, the
number of employees you hire and their compensation, competition and
other economic and business factors? Further, do you understand that the
economic and business factors that exist at the time you open your
Business may change? Check one (__) Yes (__) No. If no, please comment:
_______________________________________________________________________
_______________________________________________________________________
11. Do you understand that you are bound by the non-compete covenants (both
in-term and post-term) listed in Subparagraph 10.D and that an
injunction is an appropriate remedy to protect the interests of the
BUFFALO WILD WINGS system if you violate the covenant(s)? Further, do
you understand that the term "you" for purposes of the non-compete
covenants is defined broadly in subparagraph 10.D, such that any actions
in violation of the covenants by those holding any interest in the
franchisee entity may result in an injunction, default and termination
of the Franchise Agreement? Check one (__) Yes (__) No. If no, please
comment:
YOU UNDERSTAND THAT YOUR ANSWERS ARE IMPORTANT TO US AND THAT WE WILL RELY ON
THEM. BY SIGNING THIS ADDENDUM, YOU ARE REPRESENTING THAT YOU HAVE CONSIDERED
EACH QUESTION CAREFULLY AND RESPONDED TRUTHFULLY TO THE ABOVE QUESTIONS. IF MORE
SPACE IS NEEDED FOR ANY ANSWER, CONTINUE ON A SEPARATE SHEET AND ATTACH.
NOTE: IF THE RECIPIENT IS A CORPORATION, PARTNERSHIP, LIMITED LIABILITY COMPANY
OR OTHER ENTITY, EACH OF ITS PRINCIPAL OWNERS MUST EXECUTE THIS ACKNOWLEDGMENT.
Signed:_____________________________________________
Print Name:_________________________________________
Date:_______________________________________________
APPROVED ON BEHALF OF
BUFFALO WILD WINGS INTERNATIONAL, INC.
By:__________________________________________________
Title: Sally J. Smith, President & CEO
_____________________________________________________
Date:
_____________________________________________________
*Such representations are not intended to nor shall they act as a release,
estoppel or waiver of any liability incurred under the Illinois Franchise
Disclosure Act or under the Maryland Franchise Registration and Disclosure Law.