EXHIBIT 10.26
Buffalo Wild Wings(R)
Area Development Agreement
Between
Buffalo Wild Wings International, Inc.
1600 Utica Avenue, Suite 700
Minneapolis, MN 55416
And
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Name of Developer(s)
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Street Address
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City State Zip Code
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Phone Number
Effective Date:
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(To be completed by Us)
CONFIDENTIAL
(C) 2006 Buffalo Wild Wings International, Inc.
TABLE OF CONTENTS
SECTION PAGE
RECITALS 1
1. DEFINITIONS...........................................................1
2. GRANT OF DEVELOPMENT RIGHTS...........................................2
3. DEVELOPMENT FEE.......................................................4
4. DEVELOPMENT SCHEDULE..................................................5
5. TERM..................................................................7
6. YOUR DUTIES...........................................................7
7. DEFAULT AND TERMINATION...............................................8
8. RIGHTS AND DUTIES OF PARTIES UPON TERMINATION OR EXPIRATION...........9
9. TRANSFER.............................................................10
10. MISCELLANEOUS........................................................11
APPENDICES
A. DEVELOPMENT TERRITORY
B. DEVELOPMENT SCHEDULE
BUFFALO WILD WINGS(R)
AREA DEVELOPMENT AGREEMENT
This Area Development Agreement is made this ____ day of _____________,
20___ 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 _______________________
("developer" or "you"). If the developer is a corporation, partnership or
limited liability company, certain provisions of the Agreement also apply to
your owners and will be noted.
RECITALS
A. Our parent company has developed a unique system for operating 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;
E. You desire to develop and operate several BUFFALO WILD WINGS
restaurants and we, in reliance on your representations, have approved your
franchise application to do so in accordance with this Agreement.
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. "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.
B. "Principal Owner" means any person who directly or
indirectly owns a 10% or greater interest in the developer when the
developer is a corporation, limited liability company, a 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 developer,
we have the right to designate that person or entity as a Principal
Owner for all purposes under this Agreement, including, but not limited
to, the execution of the personal guaranty referenced in Section 10.J
below. In addition, if the developer is a partnership entity, then each
general partner is a Principal Owner, regardless of the percentage
ownership interest. If the developer is one or more individuals, each
individual is a Principal Owner of the developer. You must have at
least one Principal Owner.
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C. "Restaurants" means the BUFFALO WILD WINGS Restaurants you
develop and operate pursuant to this Agreement.
D. "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.
E. "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
in each Franchise Agreement, as we may modify and change from time to
time, and the trade dress and other commercial symbols used in the
Restaurants. Trade dress includes the designs, color schemes and image
we authorize you to use in the operation of the Restaurants from time
to time.
GRANT OF DEVELOPMENT RIGHTS
2. The following provisions control with respect to the rights granted
hereunder:
A. We grant to you, under the terms and conditions of this
Agreement, the right to develop and operate _________ (___) BUFFALO
WILD WINGS Restaurants (the "Restaurants") within the territory
described on Appendix A ("Development Territory").
B. You are bound by the development schedule ("Development
Schedule") set forth in Appendix B. Time is of the essence for the
development of each Restaurant in accordance with the Development
Schedule. Each Restaurant must be developed and operated pursuant to a
separate Franchise Agreement that you enter into with us pursuant to
Section 4.B below.
C. If you are in compliance with the Development Schedule set
forth on Appendix B, we will not develop or operate or grant anyone
else a franchise to develop and operate a BUFFALO WILD WINGS Restaurant
business (except for the Special Sites and Limited Seating Facilities
defined in Section 2.D or as otherwise set forth in this Agreement) in
the Development Territory prior to the earlier of (i) the expiration or
termination of this Agreement; (ii) the date on which you must execute
the Franchise Agreement for your last restaurant pursuant to the terms
of the Development Schedule or (iii) the date on which the Designated
Area for your final Restaurant under this Agreement is determined.
However, in the event that the Development Territory covers more than
one city, county or designated market area, the protection for each
particular city, county or designated market area shall expire upon the
earliest of (1) any of the foregoing events or (2) the date when the
Designated Area for your final Restaurant to be developed in such city,
county or designated market area under this Agreement is determined.
Notwithstanding anything in this Agreement, upon the earliest
occurrence of any of the foregoing events (i) the Development Territory
shall expire and (ii) we will be entitled to develop and operate, or to
franchise others to develop and operate, BUFFALO WILD WINGS restaurants
in the Development Territory, except as may be otherwise provided under
any Franchise Agreement that has been executed between us and you and
that has not been terminated. At the time you execute your final
Franchise Agreement under the Development Schedule, you must have an
Authorized Location for your final Restaurant.
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D. The rights granted under this Agreement are limited to the
right to develop and operate Restaurants located in the Development
Territory, and do not include (i) any right to sell products and Menu
Items identified by the Trademarks at any location or through any other
channels or methods of distribution, including the internet (or any
other existing or future form of electronic commerce), other than at
Restaurants within the Development Territory, (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 or operation
of franchised, company or affiliate owned restaurants at any time or at
any location outside of the Development Territory. You may not use any
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 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 Development Territory
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 Development Territory 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. Outside of the
Development Territory, 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 Development Territory, 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 Development Territory 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 Development Territory.
You acknowledge and agree that certain locations within the
Development Territory 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 Development Territory and we
have the right, subject to our then-current Special Sites Impact
Policy, 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.
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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 the Development Territory 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 Development
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 Development
Territory. 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.
E. This Agreement is not a Franchise Agreement and you have no
right to use in any manner the Trademarks by virtue of this Agreement.
You have no right under this Agreement to sublicense or subfranchise
others to operate a business or restaurant or use the System or the
Trademarks.
DEVELOPMENT FEE
3. You must pay a Development Fee as described below:
A. As consideration for the rights granted in this Agreement,
you must pay us a "Development Fee" of $_________, representing
one-half of the Initial Franchise Fee for each Restaurant to be
developed under this Agreement. The Initial Franchise Fee for the first
Restaurant is $___________. The Initial Franchise Fee for the second
Restaurant is $__________. The Initial Franchise Fee for each
subsequent Restaurant is $__________.
The Development Fee is consideration for this Agreement and
not consideration for any Franchise Agreement, is fully earned by us
upon execution of this Agreement and is non-refundable. The part of the
Initial Franchise Fee that is included in the Development Fee is
credited against the Initial Franchise Fee payable upon the signing of
each individual Franchise Agreement. The balance of the Initial
Franchise Fee for the first Restaurant must be paid at the time of
execution of this Agreement, together with the execution by you of the
Franchise Agreement for the first Restaurant. The total amount to be
paid by you at the time of execution of this Agreement pursuant to this
Section, including both the Development Fee and the balance of the
Initial Franchise Fee for your first Restaurant is $_______. The
balance of the Initial Franchise Fee for each subsequent Restaurant is
due as specified in Section 3.B.
B. You must submit a separate application for each Restaurant
to be established by you within the Development Territory as further
described in Section 4. Upon our consent to the site of your
Restaurant, a separate Franchise Agreement must be executed for each
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such Restaurant, at which time the balance of the Initial Franchise Fee
for that Restaurant is due and owing. Such payment represents the
balance of the appropriate Initial Franchise Fee, as described above in
Section 3.A. Upon the execution of each Franchise Agreement, the terms
and conditions of the Franchise Agreement control the establishment and
operation of such Restaurant.
DEVELOPMENT SCHEDULE
4. The following provisions control with respect to your development
rights and obligations:
A. You are bound by and strictly must follow the Development
Schedule. By the dates set forth under the Development Schedule, you
must enter into Franchise Agreements with us pursuant to this Agreement
for the number of Restaurants described under the Development Schedule.
You also must comply with the Development Schedule requirements
regarding (i) the restaurant type to be developed and the opening date
for each Restaurant and (ii) the cumulative number of Restaurants to be
open and continuously operating for business in the Development
Territory. If you fail to either execute a Franchise Agreement or to
open a Restaurant according to the dates set forth in the Franchise
Agreement, we have the right to (i) require that you hire a franchise
development expert with recognized experience in developing franchises
in a similar line of business to ours or (ii) immediately terminate
this Agreement pursuant to Section 7.B. If you are developing 3 or more
restaurants under this Agreement, you will have a "late opening
extension right" of two weeks for each restaurant in which we will not
have the right under (i) or (ii) in the previous sentence. To take
advantage of this late opening extension, you must make a request for
the extension 45 days prior to the opening date set forth in the
Franchise Agreement and have been in continuous compliance throughout
the term of this Agreement.
B. You may not develop a Restaurant unless (i) at least 45
days, but no more than 60 days, prior to the date set forth in the
Development Schedule for the execution of each Franchise Agreement, you
send us a notice (a) requiring that we send you our then current
disclosure documents, (b) confirming your intention to develop the
particular Restaurant and (c) sending us all information necessary to
complete the Franchise Agreement for the particular Restaurant and (ii)
all of the following conditions have been met (these conditions apply
to each Restaurant to be developed in the Development Territory):
1. Your Submission of Proposed Site. You must find a
proposed site for the Restaurant which you reasonably believe
to conform to our site selection criteria, as modified by us
from time to time, and submit to us a complete site report
(containing such demographic, commercial, and other
information and photographs as we may reasonably require) for
such site.
2. Our Consent to Proposed Site. You must receive our
written consent to your proposed site. We agree not to
unreasonably withhold consent to a proposed 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 will pay GeoVue, Inc. an
evaluation fee of $400 per site evaluated, provided, that you
must purchase the rights to have at least 3 sites evaluated,
unless you receive our prior approval to purchase less than 3
sites, based on the trade area. In approving or disapproving
any proposed site, we will consider such matters as we deem
material, including demographic characteristics of the
proposed site, traffic patterns, competition, the proximity to
other businesses, the nature of other businesses in proximity
to the site, and other commercial characteristics (including
the purchase or lease obligations for the proposed site) and
the size of premises, appearance and other physical
characteristics. Our consent to a proposed site, however, does
not in any way constitute a guaranty by us as to the success
of the Restaurant.
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3. Your Submission of Information. You must furnish
to us, at least 30 days prior to the earliest of (i) the date
set forth in the Development Schedule by which you must
execute a Franchise Agreement or (ii) the actual date in which
the Franchise Agreement would be executed, a franchise
application for the proposed Restaurant, financial statements
and other information regarding you, the operation of any of
your other Restaurants within the Development Territory and
the development and operation of the proposed Restaurant
(including, without limitation, investment and financing plans
for the proposed Restaurant) as we may reasonably require.
4. Your Compliance with Our Then-Current Standards
for Franchisees. You must receive written confirmation from us
that you meet our then-current standards for franchisees,
including financial capability criteria for the development of
a new Restaurant. You acknowledge and agree that this
requirement is necessary to ensure the proper development and
operation of your Restaurants, and preserve and enhance the
reputation and goodwill of all BUFFALO WILD WINGS restaurants
and the goodwill of the Trademarks. Our confirmation that you
meet our then-current standards for the development of a new
Restaurant, however, does not in any way constitute a guaranty
by us as to your success.
5. Good Standing. You must not be in default of this
Agreement, any Franchise Agreement entered into pursuant to
this Agreement or any other agreement between you or any of
your affiliates and us or any of our affiliates. You also must
have satisfied on a timely basis all monetary and material
obligations under the Franchise Agreements for all existing
Restaurants.
6. Execution of Franchise Agreement. You and we must
enter into our then-current form of Franchise Agreement for
the proposed Restaurant. You understand that we may modify the
then-current form of Franchise Agreement from time to time and
that it may be different than the current form of Franchise
Agreement, including different fees and obligations. You
understand and agree that any and all Franchise Agreements
will be construed and exist independently of this Agreement.
The continued existence of each Franchise Agreement will be
determined by the terms and conditions of such Franchise
Agreement. Except as specifically set forth in this Agreement,
the establishment and operation of each Restaurant must be in
accordance with the terms of the applicable Franchise
Agreement.
C. You must begin substantial construction of each of the
Restaurants at least 150 days before the deadline to open each of the
Restaurants 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. In addition, on or
before the deadlines to start construction you must submit to us
executed copies of any loan documents and/or 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
that Restaurant open and in operation. In the event that you fail to
comply with any of these obligations, we will have the right to
terminate this Agreement without opportunity to cure pursuant to
subparagraph 7.B.
D. You acknowledge that you have conducted an independent
investigation of the prospects for the establishment of Restaurants
within the Development Territory, and recognize that the business
venture contemplated by this Agreement involves business and economic
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risks and that your financial and business success will be primarily
dependent upon the personal efforts of you and your management and
employees. We expressly disclaim the making of, and you acknowledge
that you have not received, any estimates, projections, warranties or
guaranties, express or implied, regarding potential gross sales,
profits, earnings or the financial success of the Restaurants you
develop within the Development Territory.
E. You recognize and acknowledge that this Agreement requires
you to open Restaurants in the future pursuant to the Development
Schedule. You further acknowledge that the estimated expenses and
investment requirements set forth in Items 6 and 7 of our Uniform
Franchise Offering Circular are subject to increase over time, and that
future Restaurants likely will involve greater initial investment and
operating capital requirements than those stated in the Uniform
Franchise Offering Circular provided to you prior to the execution of
this Agreement. You are obligated to execute all the Franchise
Agreements and open all the Restaurants on the dates set forth on the
Development Schedule, regardless of (i) the requirement of a greater
investment, (ii) the financial condition or performance of your prior
Restaurants, or (iii) any other circumstances, financial or otherwise.
The foregoing shall not be interpreted as imposing any obligation upon
us to execute the Franchise Agreements under this Agreement if you have
not complied with each and every condition necessary to develop the
Restaurants.
TERM
5. Unless sooner terminated in accordance with Section 7 of this
Agreement and subject to the terms detailed in Section 2.C, the term of this
Agreement and all rights granted to you will expire on the date that your last
BUFFALO WILD WINGS Restaurant is scheduled to be opened under the Development
Schedule.
YOUR DUTIES
6. You must perform the following obligations:
A. You must comply with all of the terms and conditions of
each Franchise Agreement, including the operating requirements
specified in each Franchise Agreement.
B. You and your owners, officers, directors, shareholders,
partners, members and managers (if any) acknowledge that your entire
knowledge of the operation of a BUFFALO WILD WINGS Restaurant and the
System, including the knowledge or know-how regarding the
specifications, standards and operating procedures of the services and
activities, is derived from information we disclose to you and that
certain information is proprietary, confidential and constitutes our
trade secrets. The term "trade secrets" refers to 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
Restaurants. You and your owners, officers, directors, shareholders,
partners, members and managers (if any), jointly and severally, agree
that at all times during and after the term of this Agreement, you will
maintain the absolute confidentiality of all such proprietary
information and will not 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. We may
require that you obtain nondisclosure and confidentiality agreements in
a form satisfactory to us from the individuals identified in the first
sentence of this paragraph and other key employees.
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C. You must comply with all requirements of federal, state and
local laws, rules and regulations.
D. If you at some time in the future desire to make either a
public or a private offering of your securities, prior to such offering
and sale, and prior to the public release of any statements, data, or
other information of any kind relating to the proposed offering of your
securities, you must secure our written approval, which approval will
not be unreasonably withheld. You must secure our prior written consent
to any and all press releases, news releases and any and all other
publicity, the primary purpose of which is to generate interest in your
offering. Only after we have given our written approval may you proceed
to file, publish, issue, and release and make public any said data,
material and information regarding the securities offering. It is
specifically understood that any review by us is solely for our own
information, and our approval does not constitute any kind of
authorization, acceptance, agreement, endorsement, approval, or
ratification of the same, either expressly or implied. You may make no
oral or written notice of any kind whatsoever indicating or implying
that we and/or our affiliates have any interest in the relationship
whatsoever to the proposed offering other than acting as Franchisor.
You agree to indemnify, defend, and hold us and our affiliates
harmless, and our affiliates' directors, officers, successors and
assigns harmless from all claims, demands, costs, fees, charges,
liability or expense (including attorneys' fees) of any kind whatsoever
arising from your offering of information published or communicated in
actions taken in that regard.
E. If neither you, your Principal Owner, nor any other person
in your organization possesses, in our judgment, adequate experience
and skills to allow you to locate, obtain and develop prime locations
in the Development Territory to allow you to meet your development
obligations under this Agreement, we can require that you hire or
engage a person with those necessary skills.
DEFAULT AND TERMINATION
7. The following provisions apply with respect to default and
termination:
A. The rights and territorial protection granted to you in
this Agreement have been granted in reliance on your representations
and warranties, and strictly on the conditions set forth in Sections 2,
4 and 6 of this Agreement, including the condition that you comply
strictly with the Development Schedule.
B. You will be deemed in default under this Agreement if you
breach any of the terms of this Agreement, including the failure to
meet the Development Schedule, or the terms of any Franchise Agreement
or any other agreements between you or your affiliates and us or our
affiliates. All rights granted in this Agreement immediately terminate
upon written notice without opportunity to cure if: (i) you become
insolvent, commit any affirmative action of insolvency or file any
action or petition of insolvency, (ii) a receiver (permanent or
temporary) of your property is appointed by a court of competent
authority, (iii) you make a general assignment or other similar
arrangement for the benefit of your creditors, (iv) a final judgment
remains unsatisfied of record for 30 days or longer (unless supersedeas
bond is filed), (v) execution is levied against your business or
property, (vi) suit to foreclose any lien or mortgage against the
premises or equipment is instituted against you and not dismissed
within 30 days, or is not in the process of being dismissed, (vii) you
fail to meet the development obligations set forth in the Development
Schedule attached as Appendix B, (viii) failure to start substantial
construction of any of the Restaurants by the date established in
Section 4.C (ix) failure to secure financing for the construction of
any of the Restaurants by the date set forth in Section 4.C (x) you
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violate the provisions of Section 10.N; (xi) you fail to comply with
any other provision of this Agreement and do not correct the failure
within 30 days after written notice of that failure is delivered to
you, or (xii) we have delivered to you a notice of termination of a
Franchise Agreement in accordance with its terms and conditions.
RIGHTS AND DUTIES OF PARTIES UPON TERMINATION OR EXPIRATION
8. Upon termination or expiration of this Agreement, all rights granted
to you will automatically terminate, and:
A. All remaining rights granted to you to develop Restaurants
under this Agreement will automatically be revoked and will be null and
void. You will not be entitled to any refund of any fees. You will have
no right to develop or operate any business for which a Franchise
Agreement has not been executed by us. We will be entitled to develop
and operate, or to franchise others to develop and operate, BUFFALO
WILD Wings restaurants in the Development Territory, except as may be
otherwise provided under any Franchise Agreement that has been executed
between us and you and that has not been terminated.
B. You must immediately cease to operate your business under
this Agreement and must not thereafter, directly or indirectly,
represent to the public or hold yourself out as a present or former
developer of ours.
C. You must take such action as may be necessary to cancel or
assign to us or our designee, at our option, any assumed name or
equivalent registration that contains the name or any of the words
BUFFALO, WILD or WINGS or any other Trademark of ours, and you must
furnish us with evidence satisfactory to us of compliance with this
obligation within 30 days after termination or expiration of this
Agreement.
D. You must assign to us or our designee all your right,
title, and interest in and to your telephone numbers and must notify
the telephone company and all listing agencies of the termination or
expiration of your right to use any telephone number in any regular,
classified or other telephone directory listing associated with the
Trademarks and to authorize transfer of same at our direction.
E. You must within 30 days of the termination or expiration
pay all sums owing to us and our affiliates, including the balance of
the Initial Franchise Fees that we would have received had you
developed all of the Restaurants set forth in the Development Schedule.
In addition to the Initial Franchise Fees for undeveloped Restaurants,
you agree to pay as fair and reasonable liquidated damages (but not as
a penalty) an amount equal to $50,000 for each undeveloped Restaurant.
You agree that this amount is for lost revenues from Royalty Fees and
other amounts payable to us, including the fact that you were holding
the development rights for those Restaurants and precluding the
development of certain Restaurants in the Development Territory, and
that it would be difficult to calculate with certainty the amount of
damage we will incur. Notwithstanding your agreement, if a court
determines that this liquidated damages payment is unenforceable, then
we may pursue all other available remedies, including consequential
damages.
All unpaid amounts 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 the
event of termination for any default by you, the sums due will include
all damages, costs, and expenses, including reasonable attorneys' fees
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and expenses, incurred by us as a result of the default. You also must
pay to us all damages, costs and expenses, including reasonable
attorneys' fees and expenses, that we incur subsequent to the
termination or expiration of this Agreement in obtaining injunctive or
other relief for the enforcement of any provisions of this Agreement.
F. If this Agreement is terminated solely for your failure to
meet the Development Schedule and for no other reason whatsoever, and
you have opened at least 50% of the total number of Restaurants
provided for in the Development Schedule, you may continue to operate
those existing Restaurants under the terms of the separate Franchise
Agreement for each Restaurant. On the other hand, if this Agreement is
terminated under any other circumstance, we have the option to purchase
from you all the assets used in the Restaurants that have been
developed prior to the termination of this Agreement. Assets include
leasehold improvements, equipment, furniture, fixtures, signs,
inventory, liquor licenses and other transferable licenses and permits
for the Restaurants.
We have the unrestricted right to assign this option to
purchase. We or our assignee will be entitled to all customary
warranties and representations given by the seller of a business
including, without limitation, representations and warranties as to (i)
ownership, condition and title to assets; (ii) liens and encumbrances
relating to the assets; and (iii) validity of contracts and
liabilities, inuring to us or affecting the assets, contingent or
otherwise. The purchase price for the assets of the Restaurants will be
determined in accordance with the post-termination purchase option
provision in the individual Franchise Agreement for each Restaurant
(with the purchase price to include the value of any goodwill of the
business attributable to your operation of the Restaurant if you are in
compliance with the terms and conditions of the Franchise Agreement for
that Restaurant). The purchase price must be paid in cash at the
closing of the purchase, which must take place no later than 90 days
after your receipt of notice of exercise of this option to purchase, at
which time you must deliver instruments transferring to us or our
assignee: (i) good and merchantable title to the assets purchased, free
and clear of all liens and encumbrances (other than liens and security
interests acceptable to us or our assignee), with all sales and other
transfer taxes paid by you; and (ii) all licenses and permits of the
Restaurants that may be assigned or transferred. If you cannot deliver
clear title to all of the purchased assets, or in the event there are
other unresolved issues, the closing of the sale will be accomplished
through an escrow. We have the right to set off against and reduce the
purchase price by any and all amounts owed by you to us, and the amount
of any encumbrances or liens against the assets or any obligations
assumed by us. You and each holder of an interest in you must indemnify
us and our affiliates against all liabilities not so assumed. You must
maintain in force all insurance policies required pursuant to the
applicable Franchise Agreement until the closing on the sale.
G. All of our and your obligations that expressly or by their
nature survive the expiration or termination of this Agreement will
continue in full force and effect subsequent to and notwithstanding its
expiration or termination and until they are satisfied or by their
nature expire.
TRANSFER
9. The following provisions govern any transfer:
A. We have the right to transfer all or any part of our rights
or obligations under this Agreement to any person or legal entity.
10
B. This Agreement is entered into by us with specific reliance
upon your personal experience, skills and managerial and financial
qualifications. Consequently, this Agreement, and your rights and
obligations under it, are and will remain personal to you. You may only
Transfer your rights and interests under this Agreement if you obtain
our prior written consent and you transfer all of your rights and
interests under all Franchise Agreements for Restaurants in the
Development Territory. Accordingly, the assignment terms and conditions
of the Franchise Agreements shall apply to any Transfer of your rights
and interests under this Agreement. As used in this Agreement, the term
"Transfer" means any sale, assignment, gift, pledge, mortgage or any
other encumbrance, transfer by bankruptcy, transfer by judicial order,
merger, consolidation, share exchange, transfer by operation of law or
otherwise, whether direct or indirect, voluntary or involuntary, of
this Agreement or any interest in it, or any rights or obligations
arising under it, or of any material portion of your assets, or of any
interest in you.
MISCELLANEOUS
10. The parties agree to the following provisions:
A. You agree to indemnify, defend, and hold us, our affiliates
and our officers, directors, shareholders and employees harmless from
and against any and all claims, losses, damages and liabilities,
however caused, arising directly or indirectly from, as a result of, or
in connection with, the development, use and operation of your
Restaurants, as well as the costs, including attorneys' fees, of
defending against them ("Franchise Claims"). Franchise Claims include,
but are not limited to, those arising from any death, personal injury
or property damage (whether caused wholly or in part through our or our
affiliates active or passive negligence), latent or other defects in
any Restaurant, or your employment practices. In the event a Franchise
Claim is made against us or our affiliates, we reserve the right in our
sole judgment to select our own legal counsel to represent our
interests, at your cost.
B. 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.
C. 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. 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 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 in this Agreement.
D. Except as otherwise provided in this Agreement, any notice,
demand or communication provided for 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:
11
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,
in either case, to such other address as may have been
designated by 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.
E. Any modification, consent, approval, authorization or
waiver granted in this Agreement required to be effective by signature
will be valid only if in writing executed by the Principal Owner or, if
on behalf of us, in writing executed by our President or one of our
authorized Vice Presidents.
F. 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, 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 your
first Restaurant 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 your first Restaurant 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
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.
G. 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
Section 10.M 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 irrevocably
submit themselves to, and consent to, the jurisdiction of said courts.
12
The provisions of this Section 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,
agree to be bound in the manner set forth.
H. 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.
I. You 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.
J. If you are a corporation, partnership, limited liability
company or partnership or other legal entity, all of your Principal
Owners 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 must execute the form of
undertaking and guarantee at the end of this Agreement.
K. 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.
L. 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.
M. 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, 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.
13
Before the filing of any arbitration, the parties agree to
mediate any dispute that does not include injunctive relief or specific
performance actions covered below, 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.
Nothing in this Agreement bars our right to obtain injunctive
relief against threatened conduct that will cause us loss or damages,
under the usual equity rules, including the applicable rules for
obtaining restraining orders and preliminary injunctions. Furthermore,
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.
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.
N. 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
subsidiaries or 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 7.B. 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 perceiving 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 damages 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(s) 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 that they may seek compensation
from you.
O. 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.
14
IN WITNESS WHEREOF, the parties have executed the foregoing Agreement
as of the dates written below.
DEVELOPER: FRANCHISOR
BUFFALO WILD WINGS INTERNATIONAL,
INC.
Date: Date:
-------------------------- ----------------------------
- --------------------------------- ---------------------------------
By: By: Sally J. Smith
------------------------------ ------------------------------
Its: Its: President & CEO
-------------------------- --------------------------
By:
------------------------------
Its:
--------------------------
By:
------------------------------
Its:
--------------------------
15
PERSONAL GUARANTY AND AGREEMENT TO BE BOUND
PERSONALLY BY THE TERMS AND CONDITIONS
OF THE AREA DEVELOPMENT AGREEMENT
In consideration of the execution of the Area Development Agreement
(the "Agreement") between BUFFALO WILD WINGS INTERNATIONAL, INC. ("we" or "us")
and __________________________ (the "Developer"), dated ______________, 2006 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 Developer, 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
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 waives (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 Developer 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 Developer.
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 Developer or any other person; (2) such liability
will not be diminished, relieved or otherwise affected by the Developer'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 Developer 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.
DEVELOPER:
-----------------------------------------
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
APPENDIX A
DESCRIPTION OF DEVELOPMENT TERRITORY
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DEVELOPER: FRANCHISOR
BUFFALO WILD WINGS INTERNATIONAL,
INC.
Date: Date:
-------------------------- ----------------------------
- --------------------------------- ---------------------------------
By: By: Sally J. Smith
------------------------------ ------------------------------
Its: Its: President & CEO
-------------------------- --------------------------
By:
------------------------------
Its:
--------------------------
By:
------------------------------
Its:
--------------------------
APPENDIX B
DEVELOPMENT SCHEDULE
You acknowledge and agree that a material provision of the Area
Development Agreement is that the following number of BUFFALO WILD WINGS
Restaurants must be opened and continuously operating in the Development
Territory in accordance with the following Development Schedule:
==============================================================================================================================
Cumulative number of
Date by Which the Restaurants Required to be
Restaurant Must be Open and Continuously
Opened and Continuously Operating for Business in the
Date by Which Franchise Operating for Business Development Territory as of
Restaurant Number Restaurant Type Agreement Must be Signed in the Territory the Date in Preceding Column
- ------------------------------------------------------------------------------------------------------------------------------
1 Date of this Agreement 1
- ------------------------------------------------------------------------------------------------------------------------------
2 2
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- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
==============================================================================================================================
For purposes of determining compliance with the above Development
Schedule, only the Restaurants actually open and continuously operating for
business in the Development Territory as of a given date will be counted toward
the number of Restaurants required to be open and continuously operating for
business.
DEVELOPER: FRANCHISOR
BUFFALO WILD WINGS INTERNATIONAL,
INC.
Date: Date:
-------------------------- ----------------------------
- --------------------------------- ---------------------------------
By: By: Sally J. Smith
------------------------------ ------------------------------
Its: Its: President & CEO
-------------------------- --------------------------
By:
------------------------------
Its:
--------------------------
By:
------------------------------
Its:
--------------------------
ADDENDUM TO
BUFFALO WILD WINGS(R)
AREA DEVELOPMENT 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 Area
Development 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 10.C of the Agreement are
hereby deleted in their entirety.
2. Section 10.C of the Agreement is hereby amended to include the
following:
Nothing in this Section 10.C, 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
Area Development Agreement, nothing in the Offering Circular
may contradict or be inconsistent with the contract terms.
3. The first sentence of Section 10.G is therefore deleted in its
entirety, and the following substituted in lieu thereof:
Subject to Section 10.M, 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 10.F(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 Section 10.M 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. Except as amended herein, the Area Development 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: By: Sally J. Smith
------------------------------ ------------------------------
Its: Its: President & CEO
-------------------------- --------------------------
By:
------------------------------
Its:
--------------------------
By:
------------------------------
Its:
--------------------------
ADDENDUM TO
BUFFALO WILD WINGS(R)
AREA DEVELOPMENT 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 Area
Development Agreement to the contrary, the Agreement is amended as follows:
1. The following sentence is hereby added to the end of Section 10.C:
Nothing in this Section 10.C, however, will act as a release,
estoppel or waiver of any liability incurred under the
Maryland Franchise Registration and Disclosure Law.
2. Section 10.G is amended to provide that you may bring a lawsuit in
Maryland for claims arising under the Maryland Franchise Registration and
Disclosure Law. Section 10.G 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.
3. 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.
4. Except as amended herein, the Area Development 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: By: Sally J. Smith
------------------------------ ------------------------------
Its: Its: President & CEO
-------------------------- --------------------------
By:
------------------------------
Its:
--------------------------
By:
------------------------------
Its:
--------------------------
ADDENDUM TO
BUFFALO WILD WINGS(R)
AREA DEVELOPMENT 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 Area
Development 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. Section 10.H is hereby deleted in its entirety.
4. Except as amended herein, the Area Development 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: By: Sally J. Smith
------------------------------ ------------------------------
Its: Its: President & CEO
-------------------------- --------------------------
By:
------------------------------
Its:
--------------------------
By:
------------------------------
Its:
--------------------------
ADDENDUM TO
BUFFALO WILD WINGS(R)
AREA DEVELOPMENT 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 Area
Development Agreement to the contrary, the Agreement is amended to include the
following:
1. 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 10.G 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
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 Development Territory in which you are
located.
2. Section 10.H is hereby deleted from the Area Development Agreement,
as a waiver of punitive damages is considered unenforceable in the State of
North Dakota.
3. Except as amended herein, the Area Development 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: By: Sally J. Smith
------------------------------ ------------------------------
Its: Its: President & CEO
-------------------------- --------------------------
By:
------------------------------
Its:
--------------------------
By:
------------------------------
Its:
--------------------------
ADDENDUM TO
BUFFALO WILD WINGS(R)
AREA DEVELOPMENT 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 Area
Development Agreement to the contrary, the Agreement is amended to include the
following:
1. Section 10.C of the Area Development Agreement is amended by the
addition of the following language:
If any of the provisions in the Franchise Offering
Circular or Area Development 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
Area Development Agreement with regard to any franchise sold
in Washington.
2. Section 10 of the Area Development 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.
3. Except as amended herein, the Area Development 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: By: Sally J. Smith
------------------------------ ------------------------------
Its: Its: President & CEO
-------------------------- --------------------------
By:
------------------------------
Its:
--------------------------
By:
------------------------------
Its:
--------------------------
ADDENDUM TO
BUFFALO WILD WINGS(R)
AREA DEVELOPMENT 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 Area
Development Agreement to the contrary, the Agreement is amended to include the
following:
1. Notwithstanding anything which may be contained in the body of the
Area Development Agreement to the contrary, Section 7.B of the Agreement 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 Area Development 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: By: Sally J. Smith
------------------------------ ------------------------------
Its: Its: President & CEO
-------------------------- --------------------------
By:
------------------------------
Its:
--------------------------
By:
------------------------------
Its:
--------------------------
ACKNOWLEDGMENT ADDENDUM TO
BUFFALO WILD WINGS(R) AREA DEVELOPMENT AGREEMENT
As you know, you and we are entering into Area Development Agreement for the
development and operation of BUFFALO WILD WINGS(R) restaurants. 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 Area
Development 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
Area Development Agreement? Check one:( ) Yes ( ) No. If no, please
comment:
----------------------------------------------------------------
------------------------------------------------------------------------
2. Have you studied and reviewed carefully our Offering Circular and Area
Development Agreement? Check one: ( ) Yes ( ) No. If no, please
comment:
----------------------------------------------------------------
------------------------------------------------------------------------
3. Did you receive a copy of the Area Development Agreement at least 5
business days prior to the date on which the Area Development 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 Area Development 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. Except as state in Item 19, 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 Development 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 Development Territory using any trademarks other than the BUFFALO
WILD WINGS Trademark; and (iii) inside the Development 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 ADA)? Check one:
( ) Yes ( ) No. If no, please comment:
----------------------------------
------------------------------------------------------------------------
9. Do you understand that the success or failure of the development and
operation of your Restaurants 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:
------------------------------------------
------------------------------------------------------------------------
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.
APPROVED ON BEHALF OF BUFFALO WILD
WINGS INTERNATIONAL, INC.
Signed: By:
---------------------------- ----------------------------
Print Name: Title: Sally J. Smith, President & CEO
------------------------ --------------------------------
Date: 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) AREA DEVELOPMENT AGREEMENT
As you know, you and we are entering into Area Development Agreement for the
development and operation of BUFFALO WILD WINGS(R) restaurants. 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 Area
Development 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
Area Development Agreement? Check one: ( ) Yes ( ) No. If no, please
comment:
----------------------------------------------------------------
------------------------------------------------------------------------
2. Have you studied and reviewed carefully our Offering Circular and
Area Development Agreement? Check one: ( ) Yes ( ) No. If no, please
comment:
----------------------------------------------------------------
------------------------------------------------------------------------
3. Did you receive a copy of the Area Development Agreement at least 5
business days prior to the date on which the Area Development 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 Area Development 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. Except as state in Item 19, 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 Development 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 Development Territory using any trademarks other than the BUFFALO
WILD WINGS Trademark; and (iii) inside the Development 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 ADA)? Check one:
( ) Yes ( ) No. If no, please comment:
---------------------------------
------------------------------------------------------------------------
9. Do you understand that the success or failure of the development and
operation of your Restaurants 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:
------------------------------------------
------------------------------------------------------------------------
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.
APPROVED ON BEHALF OF BUFFALO WILD
WINGS INTERNATIONAL, INC.
Signed: By:
---------------------------- ----------------------------
Print Name: Title: Sally J. Smith, President & CEO
------------------------ --------------------------------
Date: 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) AREA DEVELOPMENT AGREEMENT
As you know, you and we are entering into Area Development Agreement for the
development and operation of BUFFALO WILD WINGS(R) restaurants. 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 Area
Development 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
Area Development Agreement? Check one: ( ) Yes ( ) No. If no, please
comment:
----------------------------------------------------------------
------------------------------------------------------------------------
2. Have you studied and reviewed carefully our Offering Circular and
Area Development Agreement? Check one: ( ) Yes ( ) No. If no, please
comment:
----------------------------------------------------------------
------------------------------------------------------------------------
3. Did you receive a copy of the Area Development Agreement at least 5
business days prior to the date on which the Area Development 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 Area Development 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. Except as state in Item 19, 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 Development 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 Development Territory using any trademarks other than the BUFFALO
WILD WINGS Trademark; and (iii) inside the Development 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 ADA)? Check one:
( ) Yes ( ) No. If no, please comment:
----------------------------------
------------------------------------------------------------------------
9. Do you understand that the success or failure of the development and
operation of your Restaurants 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:
------------------------------------------
------------------------------------------------------------------------
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.
APPROVED ON BEHALF OF BUFFALO WILD
WINGS INTERNATIONAL, INC.
Signed: By:
---------------------------- ----------------------------
Print Name: Title: Sally J. Smith, President & CEO
------------------------ --------------------------------
Date: 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.