FRANCHISE AGREEMENT (Individual or Owner/Operator) CONTENTS INTRODUCTION 1. 2. Z 8 10. FRANCHISE GRANT: TERM AND LOCATION FRANCHISE FEE FRANCHISEE REPRESENTATIONS: FRANCHISEE ASSOCIATION AND ADVISORY COUNCIL ‘STANDARDS AND UNIFORMITY OF OPERATION. ‘A. MOD Manual B, Franchised Restaurant 1. Repair and Maintenance 2. Current Image ©. Signs D. Equipment E. Vending Machines, etc. F, Menu and Service G. Hours of Operation H. Uniforms {._ Advertising and Promotional Materials J. Right of Entry end inspection i. Interference With Employment Relations of Others SERVICES AVAILABLE TO FRANCHISEE ‘THE FRANCHISED RESTAURANT ‘TRAINING ROYALTY AND ADVERTISING CONTRIBUTION A. Royalty B. Advertising, Sales Promotion and Public Reiations C. Gross Seles D. Late Charge &. Payment , Audit of Advertising Contributions G. Alternative Method of Payment ACCOUNTING PROCEDURES: RIGHT OF AUDIT A. Accounting B. Annual Financial Statements ©. Audits of Franchisee D, Release of Financial Information Fran Aat (ndtv Own-Cper) 10/04 (Ex C}.do0 ‘SUBJECT TO GHANGE WITHOUT NOTICE 1 no BAAATAGeAROVOwTn 12. 13. 14, 15, 16. 17, 18. 19. 20. 2. LIMITATIONS OF FRANCHISE. ‘A. Trademarks, Trade Names, Service Marks and Trade Secrets, B. independent Contractor UNFAIR COMPETITION INSURANCE; INDEMNIFICATION A. Insurance: B. Worker's Compensation ©. Indemnity D. Defense of Ciaims ‘TAXES ASSIGNMENT AND TRANSFER: CONDITIONS AND LIMITATIONS RIGHT OF FIRST REFUSAL OPTION TO OBTAIN SUCCESSOR FRANCHISE AGREEMENT DEFAULT AND EFFECT OF TERMINATION A. Default B. Effect of Termination RESTRICTIVE COVENANT RESOLUTION OF DEVELOPMENT DISPUTES A. Non-Binding Mediation B. Binding Dispute Resolution ‘C. Modification of Procedures D. institution of Legal Proceedings MISCELLANEOUS: GENERAL CONDITIONS ‘A. Interpretation B. Non-Walver C. Governing Law, Forum and Compliance with Laws D. Severability E. Notices F. Liability of Multiple Franchisees G. Modification H. Binding Effect |. Survival J. Attorney's Fees K. Entire Agreement Exhibit: Premises Legal Description BxhbitB: © BURGER KING® Marketing Account, New Restaurant Marketing Account ExhbitC: Guidelines for Preparation of Corporate Governing Instruments, Fran Agt av Own-Oper) 10/04 (ExC}.doc ‘SUBJECT TO CHANGE WITHOUT NOTICE F 24 BRAS BBR VISSRBSBSRas 8 BebeFran Agt (Indiv Own-Oper) 1014 (Ex C}.doc ‘SUBJECT TO CHANGE WITHOUT NOTICE RESTAURANT #. ADDRESS Exit 'o°BURGER KING RESTAURANT FRANCHISE AGREEMENT THIS AGREEMENT is made as of the __ day of. , by and between BURGER KING CORPORATION, a Florida corporation ("BKC") and CFRANGHISEE”). INTRODUCTION ‘A BKC is the exclusive licensee of certain trademarks and service marks, Including BURGER KING and HOME OF THE WHOPPERE, which are registered or pending with the United States Patent and Trademark Office, and is the owner or exclusive licensee of other marks authorized for use in BURGER KING Restaurants (the "BURGER KING marks"). B. BKC Js engayed in the business of operating and grenting franchises to operate BURGER KING Restaurants using uniform standards, product specifications and operating procedures (the "BURGER KING System") and the BURGER KING marks. ©, _ FRANCHISEE desires to acquire a franchise to operate a BURGER KING Restaurant at the location for the entire Term specified in this Agreement. FRANCHISEE acknowledges that FRANCHISEE has recelved a copy of the Uniform Franchise Offering Circular of BKC and has had a full ‘and adequate opportunity to be thoroughly advised of the terms and conditions of this Agreement by financial and legal counsel of FRANCHISEES own choosing at least Ten (10) business days, excluding Weekends and Federal holidays (Business Days") prior to its execution, and is entering into this ‘Agreement after having made an independent investigation of BKC's operations and net upon any representation as to profits and/or sales volume which FRANCHISEE might be expected to realize, nor upon any representations or promises by BKC which are not contained in this Agreement, In consideration of the mutual covenents contained in this Agreement, the parties agree as folows: 4. FRANCHISE GRANT: TERM AND LOCATION BKC grants to FRANCHISEE snd FRANCHISEE accepts a franchise for a period of Twenty (20) years to use the BURGER KING System and the BURGER KING marks only in the operation of a BURGER KING Restaurant at. more fully ‘described in Exhibit “A” (the “Franchised Restaurant), (the term "Franchised Restaurant” includes the real estate described on Exhbit "A" (the "Premises”) and ail "Improvements" constructed thereon wherever the ‘context permits or requires). The term of this Agreement commences on the date the Franchised Restaurant opens for business (the "Commencement Date”) and shall expire Twenty (20) years thereafter (ihe Term") unless sooner terminated in accordance with the provisions of this Agreement. FRANCHISEE agrees to operate the Franchised Restaurant at the specified location for the entire twenty (20) year Term. FRANCHISEE accepts this franchise with the full and complete understanding that the franchise grant contains no promise or assurance of renewal. The sole and entire conditions under which FRANCHISEE will have the opportunity of obtaining a Successor BURGER KING Franchise Agreement at ‘expiration are those set forth herein in Paragraph 17. This franchise is for the specified location anly and ‘does not in any way grant or imply any area, market or territorial rights proprietary to FRANCHISEE. Fran Agt (ndiv Own-Oper 1010 (Ex C}doe en ot SUBJECT TO CHANGE WITHOUT NOTICE2 FRANCHISE FEE FRANCHISEE acknowledges that the grant of this franchise constitutes the consideration for the payment by FRANCHISEE to BKC of ___ OS. ) Dollars, and that this ‘sum shall be fully earned by BKC upon the execution and delivery of this Agreement. 3. FRANCHISEE REPRESENTATIONS FRANCHISEE acknowledges its understanding of BKC's franchising policy of requiring all Individuais who have any Interest in the Franchised Restaurant, whether directly, beneficially or ‘contingently, to be named in and be @ party to the Franchise Agreement. If FRANCHISEE consists of more than one individual, the group must include an Operating Partner who, throughout the Term of the ‘Agreement, lives in the locality of the Franchised Restaurant. The Operating Partner must have @ ‘minimum Fifty (50%) percent unencumbered equity ownership (Including profits) and a minimum Fifty (60%) percent controling interest through any voting apparatus in the Franchised Restaurant and must devote his full time and best efforts to the day-to-day operation of the Franchised Restaurent with no operational or management commitments in other businesses (except other BURGER KING Restaurants operated under franchises granted to such person by BKC). FRANCHISEE agrees that It has not avolded ‘and will not hereafter, directly or indirectly, avoid the financial interest requirements and the direct ‘operation requirements set forth above through enlry into a management agreement. consulting ‘agreement or any other such artificial device or arrangement. FRANCHISEE agrees to furnish BKC with such evidence as BKC may request ftom time to time for the purpose of assuring BKC that FRANCHISEE'S efforts and equity interest remain as represented in this Agreement. 4, FRANCHISEE ASSOCIATION AND ADVISORY COUNCIL BKC shall, on a periodic basis, consult with representatives of an independent association whose membership is comprised of at least Fifty One percent (51%) of all BURGER KING franchise-owned and operated restaurants in the U.S.A. (the "Franchisee Association") relative to those matters expressly described In Paragraphs 5.8, 6, 8, 9 and 20.C of this Agreement. The representatives of the Franchisee ‘Association shall be referred to herein as the “Franchisee Advisory Council. Membership by a Franchisee in the Franchisee Association shall be voluntary. FRANCHISEE agrees that BKC may consult with and consider the advice of the Franchisee ‘Advisory Council. For purposes of this Franchise Agreement, to qualify as the "Franchisee Association,” the ‘association must have been formed for the primary purpose of representing the rights of franchisees, and membership in such association must be limited solely to BURGER KING franchisees, or officers, directors, partners or shareholders of BURGER KING franchisees, who in elther case are not owned or controlled by BKC or its parent, or any subsidiary or affiiate of BKC. BKC shall not prohibit nor restrict FRANCHISEE from associating with other franchisees, nor from forming, joining or participating in eny franchisee trade association (the “Actviies"). BKC shell not retaliate against FRANCHISEE because FRANCHISEE engages in the Activities. BKC's exercise and enforcement of its rights under any franchise agreement or the law shall not, by itself, constitute a breach of BKC’s responstbilities under the preceding sentence. Fran Agt (inv Onn-Oper) 10/04 (Ex C).doo EabtC ‘SUBJECT TO CHANGE WITHOUT NOTICE8. _ STANDARDS AND UNIFORMITY OF OPERATION BKC shall establish, and cause approved suppliers to the BURGER KING System to reasonably ‘comply with, product, service and equipment specifications as established by BKC from time to time, ‘Suggestions from FRANCHISEE for improving elements of the BURGER KING System, such 2s products, equipment, uniforms, restaurant facies, service format and Advertising, are encouraged and may or may not be considered by BKC when adopting or modifying standards, specifications and procedures for the BURGER KING System. FRANCHISEE acknowledges that any such suggestions made by FRANCHISEE hereunder shall become the exclusive property of BKC. BKC shall have no obligetion to utiize suggestions end no obligation to provide compensation for any suggestion. FRANCHISEE may not utlize any such suggestions in the Franchised Restaurant without the prior written ‘consent of BKC. A MOD. Manual FRANCHISEE acknowledges and agrees that prompt adoption of and adherence to BKC's comprehensive restaurant format and operating system, including a standardized design, decor, ‘equipment system, color scheme and style of building and signage, uniform standards, specifications and procedures of operation, quality and uniformity of product and services offered and the provisions of the Manual of Operating Data (the "MOD Manuel"), as amended from time to time, are reasonable, necessary and essential to the image and success of ali BURGER KING Restauranis (the "BURGER KING Restaurant System"). The MOD Menuel contains the official mandatory restaurant operating standards, specifications and procedures prescribed from time to time by BKC for the operation of a BURGER KING Restaurant. The MOD Manual shall be kept at the Franchised Restaurant at all times and all changes or additions made by BKC shall be inserted upon receipt. in the event of any conflict between the MOD Manual kept at the Franchised Restaurant and the master copy maintained by BKC in Miami, Florida (or such other place as may be designated by BKC) the master copy shall control, FRANCHISEE agrees that changes in the standards, speoifications and procedures may become necessary and desirable trom time to time and agrees to accept end comply with such modifications, revisions and additions to the MOD Manual which BKC in the good feith exercise of its judgment believes to be desirable and reasonably necessary. The material and information set forth in the MOD Manual is confidentiat and proprietary to BKC and is to be used by FRANCHISEE only in connection with the ‘operation of the Franchised Restaurant end other franchised BURGER KING Restaurants, The MOD ‘Manual and other specifications, standards end operating procedures communicated in writing to FRANCHISEE shall be deemed a part of this Agreement. B. —_Franchised Restaurant ‘The Franchised Restaurant will be constructed and improved in the manner authorized and approved by BKC, and the appearance of the Franchised Restaurant will not thereafter be altered except ‘as may be approved in writing by BKC. 4. Repair and Maintenance. FRANCHISEE shall, at its expense, continuously throughout the Term of this Agreement maintain the Franchised Restaurant in good condition and repair in ‘coordance with BKC's then current repair end maintenance standards. During the seventh and seventeenth years of the Term, FRANCHISEE shall provide to BKC such evidence a BKC deems satisfactory, in BKC's reasonable discretion, that the Franchised Restaurant is in good condition and Fran Agt Qncv Own-Oper) 10/0 Ex C}.doc ent ‘SUBJECT TO CHANGE WITHOUT NOTICE arepair and that the Franchised Restaurant is in compliance with BKC's then current repair end malntenance standards for BURGER KING Restaurants. 2 Current Image. FRANCHISEE shall, improve, alter and remodel the Franchised Restaurant to bring it into conformance with the national and local plans, specifications and/or other standards for new or remodeled BURGER KING Restaurants as may hereafier be reasonably changed ‘and defined from time to time by BKC (‘Current Image") in accordance with the following timetable: @ __ During the tenth year of the Term, FRANCHISEE shall remodel, improve ‘and alter the exterior of the Franchised Restaurant to conform with the Current Image In effect on the ninth anniversary of the date of this Agreement. (i) BKC and the Franchisee Advisory Council shail meet annually to discuss and establish the components of Current Image for the Franchised Restaurent. The Current image as established by BKC and the Franchisee Advisory Council, from time to time, shall be bincing upon FRANCHISEE. If BKC and the Franchisee Advisory Council do not agree on the Current Image, BKC and the Franchisee Association shall settle the matter by Arbitration by a sole arbitrator in accordance with the then current non-administered arbitration rules of the Center for Public Resources. The arbitration shall be governed by the United States Arbitration Act (U.S.A.A.), and judgment upon the decision rendered by the arbitrator shall be binding on FRANCHISEE and BKC and except as provided in Section 10(a) of the USA, shall not be appeeleble in any forum. ‘The decision may be entered by any court having Jurisdiction thereof, The place of arbitration shall be Miami, Florida. Failure of the Franchisee to comply with the terms of this Paragraph 5.8 shall be deemed a material defautt ofthis Agreement. c. Signs ‘The BURGER KING marks will only be erected end displayed in the manner and at such locations 48 are approved and authorized by BKC, in writing. FRANCHISEE agrees to maintain and display signs reflecting the Current Image of BURGER KING Restaurants and shall not place additional signs or posters at the Franchised Restaurant without the prior written consent of BKC. Only signs from sources approved by BKC may be utlized at the Franchised Restaurant. FRANCHISEE shall discontinue the use of and destroy such signs as are declared obsolete by BKC within the reasonable time specified by BKC. Such signs are fundamental to the BURGER KING Restaurant System and FRANCHISEE hereby grants to BKC the right fo enter the Franchised Restaurant to remove and destroy unapproved or obsolete signs in the event that FRANCHISEE has failed to do so within thirty (30) days after the written request of BKC. D. Equipment ‘Only equipment approved by BKC which meets the criterla and performance standards of the BURGER KING Restaurant System may be used in the Franchised Restaurant. The equipment shall be maintained in a condition that meets operational standerds specified In the MOD Manual and, as equipment becomes obsolete or inoperable, FRANCHISEE will replace the equipment with the types and kinds of equipment as are then approved for use in BURGER KING Restaurants. if BKC determines that additional or replacement equipment is needed because of a change in menu items or method of preparation and service or because of health or safety considerations, FRANCHISEE wil install the ‘additional equipment or replacement equipment within the reasonable time specified by BKC. Prior to Fran Agt Gndlv Oun-Oper) 1/06 (EC) doe Baht c* ‘SUBJECT TO CHANGE WITHOUT NOTICEmandating the use of a new or additional piece of equipment, BKC shall use reasonable efforts to field test the proposed new equipment. Vending Machines, Eto. Public telephones, newspaper racks, juke boxes, cigarette, gum and candy machines, rides, tottery ticket terminals, video games or any other games, or vending or amusement machines wl not be installed on the Franchised Restaurant without the prior written approval of BKC. In the event euch items are installed on the Franchised Restaurant, then all sums recelved by FRANCHISEE in connection with these items shall be included within "Gross Sales” as defined herein. F, Menu and Service ‘Al menu items which BKC may deem appropriate to take full advantage of the potential market ‘and achieve standardization in the BURGER KING Restaurant Syetem will be served, and no items which are not set forth in the MOD Manual or otherwise authorized and approved by BKC In writing will be served, FRANCHISEE shall only sell the approved menu items at retall to consumers from and through the Franchised Restaurant and shall not sell such llems for redistribution or resale. FRANCHISEE shell ‘adhere to all specifications contained in the MOD Manual or 2s otherwise prescribed by BKC as to ingredients, methods of preparation and service, weight and dimensions of products served, and standards of cleanliness, health and sanitation. Al! food, drink and other items will be served and sold in packaging thet meets BKC's specifications, Only food, supplies, paper products and packaging from ‘sources approved by BKC shall be used in the Franchised Restaurant. G. Hours of Operation ‘The Franchised Restaurant shall be open for business at @ minimum from 7:00 AM. to 11:00 PM. Seven (7) days a week, Fifty.Two (52) weeks a year, unless otherwise authorized or directed by ‘BKC or unless prohibited by applicable law. The Franchised Restaurant may be closed on Thanksgiving Day and/or Christmas Day if a majorty of the BURGER KING Restaurants in the market area (AD) in which the Franchised Restaurant is located elect to close on the holiday. H. Uniforms ‘Al employees shall only wear uniforms of such design and color as are from time to tine speciied wyBKC, 1 Advertising and Prometional Materials ‘Only those advertising and promotional materials or Items which are authorized by BKC in writing prior to use shall be used, sold or distrbuted, and no display or use of the BURGER KING marks shall be made without the prior writen approval of BKC. All materia on which the BURGER KING marks ere used must include the designation® or such other designation as BKC may specify. J. Right of Entry and Inspection BKC shall have the unrestricted right fo enter the Franchised Restaurant to conduct such activites as it deems necessary to ascertain FRANCHISEE'S compliance with this Agreement. The Inspections may be conducted without prior notice at any time when FRANCHISEE or one of his Fran Agt (Iciv Oun-Open 10/04 (Ex C).doc exnbt ct ‘SUBJECT TO CHANGE WITHOUT NOTICE