COFFEE PLANTATION(R)
FRANCHISE AGREEMENT
This Coffee Plantation(R) Franchise Agreement is made and entered into
by and between Coffee People, Inc., an Oregon corporation (referred to as the
"Franchisor," "we," "us" or "our"), with its principal office currently at 11480
Commercial Parkway, Castroville, California 95012, and
__________________________________________________________________ (individually
and collectively referred to as the "Franchisee," "you" or "your") whose
principal address is __________________________________________________. If
there is more than one Franchisee, their obligations under this Agreement and
all other agreements (whether past, present or future) are, and shall be, joint
and several.
IN A NUMBER OF PLACES IN THIS AGREEMENT, YOU'RE ASKED TO INITIAL CERTAIN
ITEMS. INITIALING BY YOU CONFIRMS, WITHOUT LESSENING THE IMPORTANCE OR BINDING
NATURE OF EACH OF THE PROVISIONS OF THIS AGREEMENT, THAT YOU RECOGNIZE THE
SPECIAL SIGNIFICANCE OF THOSE ITEMS AND THE FACT THAT THEY'VE BEEN FULLY
DISCUSSED WITH YOU, AND READ, UNDERSTOOD AND AGREED TO BY YOU. PLEASE INITIAL
BELOW AND AT ALL OTHER POINTS INDICATED.
YOUR INITIALS: __________ / __________
1. BUSINESS BACKGROUND AND PRELIMINARY AGREEMENTS
1.1 INTRODUCTION. We've developed, and plan to continue to develop,
methods of operating Coffee Plantation(R) Stores ["Plantation Store(s)"] which
offer, at retail, bulk specialty coffees, teas, beverages, coffee and tea makers
and related supplies, accessories and gifts and other items as approved by us
from time-to-time in our sole and absolute discretion (the "Products.")
Plantation Stores generally offer beverages for immediate consumption on the
premises and some Plantation Stores carry pastries, cookies and baked goods and
have seating areas, in each case as consented to by us.
Plantation Stores are operated with formats, signs, equipment, layout,
systems, methods, procedures and designs approved by us and which utilize a
special architectural design, offer the Products, and utilize certain
trademarks, service marks, trade dress and other commercial symbols, including
"Coffee Plantation." Plantation Stores operate at locations that feature the
"Coffee Plantation(R) System" (as defined below), any element of which we can
modify from time-to-time in our sole and absolute discretion and with which you
will promptly comply.
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We selectively award, to qualified persons, franchises (the "Franchise")
to own and operate a Plantation Store using the Coffee Plantation System and the
Names and Marks and Trade Dress. Where we deem it appropriate, the Franchise
(and this Agreement) may be subject to a separate written Addendum signed by you
and us and granting you rights to operate variations of the standard Plantation
Store, such as a Coffee Plantation Drive-Through Unit (sometimes referred to as
"Motor Moka(R)"), a Coffee Plantation Espresso Bar/Kiosk (the "Bar/Kiosk"), or
otherwise.
You've applied for a franchise to own and operate a Plantation Store or
other facility at premises identified in Section 2.1 below and your application
has been approved by us in reliance on all of the representations made in your
application.
1.2 DEFINITIONS. The following terms have the meanings listed below.
Other terms used in this Agreement are defined and construed in the context in
which they occur.
"AFFILIATE" - Any person, company or other entity which controls, is
controlled by or is under common control with another person, company or
other entity, as well as any spouse, parent, child and/or sibling and
any entity controlled by any spouse, parent, child and/or sibling. Our
affiliates include (but are not necessarily limited to), at present,
Gloria Jean's Gourmet Coffees Franchising Corp., Gloria Jean's Gourmet
Coffees Corp., Edglo Enterprises, Inc., Gloria Jean's Inc., Coffee
People Inc., Second Cup USA Holdings Ltd. and The Second Cup Ltd.)
"AGREEMENT" - This Coffee Plantation(R) Franchise Agreement.
"DESIGNATED EQUIPMENT" - Equipment that meets our requirements and is to
be obtained and used by you in the operation of your Plantation Store.
"FRANCHISE" - The right to operate a single Plantation Store at the
Premises pursuant to the terms and conditions of this Agreement.
"FRANCHISOR-RELATED PERSONS/ENTITIES" - Collectively and individually,
but not necessarily limited to, the following, whether past, present or
future: Gloria Jean's Gourmet Coffees Franchising Corp., Gloria Jean's
Gourmet Coffees Corp., Edglo Enterprises, Inc., Gloria Jean's Inc.,
Coffee People Inc., Second Cup USA Holdings Ltd. and The Second Cup
Ltd., the partners, shareholders, officers, directors,
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agents, attorneys, accountants, and/or employees and/or any affiliates,
of any of the foregoing and each of their respective partners,
shareholders, officers, directors, agents, attorneys, accountants,
and/or employees, as well as any company(ies)/person(s) acting by,
through, under or in concert or affiliated or associated in any way with
any of the foregoing, as well as any past, present and/or future
predeccesors, successors and/or assigns of any of the foregoing.
"GOOD STANDING" - "Good Standing" includes (but is not limited to) you
and each affiliate of yours (a) not being in default or threat of
default under this Agreement and/or any other agreement, or any other
legal obligation, to us and/or any affiliate of ours and (b) operating
each Coffee Plantation(R) Franchise, in which you and/or any affiliate
of yours has any ownership or other interest, in full compliance with
the System and Manuals and all of our other requirements.
"MANUAL(S)" - One or more handbooks, manuals, bulletins and/or volumes,
other written materials (including materials distributed electronically
or otherwise), and video, audio and/or software media, regardless of
title, containing (among other things) specifications, standards,
policies and procedures prescribed from time-to-time by us and to be
followed by you in connection with your operation, marketing or
otherwise of your Plantation Store and your performance under this
Agreement, including (but not limited to) all goods and services to be
sold and/or provided at or from your Plantation Store and/or in
association with the Marks. The Manuals include all changes and
supplements issued by us in the future, each of which you'll promptly
comply with.
"NAMES AND MARKS" - The trademarks, service marks and other commercial
symbols now and/or in the future owned by us and which we designate,
from time-to-time, to be used to identify the services and/or products
offered by Plantation Stores, including (but not limited to) "Coffee
Plantation", the Trade Dress and certain associated logos.
"PLANTATION STORE" - The Coffee Plantation(R) Store which you're
franchised to operate at the Premises pursuant to this Agreement,
including any Bar/Kiosk, Drive-Through Unit or other facility which we
authorize you to operate.
"PREMISES" - The location at which you will operate a single Plantation
Store, as permitted and accepted by us pursuant to this Agreement.
"PRODUCTS" - Bulk specialty coffees, teas, beverages, bakery items,
coffee and tea makers and related supplies,
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accessories and gifts and other items as approved by us from
time-to-time to be offered at or from your Plantation Store, in our sole
and absolute discretion.
"SERVICES" - Services approved by us from time-to-time to be offered at
or from your Plantation Store, in our sole and absolute discretion.
"SIMILAR BUSINESS"- Any business that now or in the future offers,
sells, distributes, provides or is otherwise involved or deals with,
whether at wholesale, retail or otherwise, any goods and/or services
(including, among others, the Products) now or in the future authorized
by us to be offered at or from Plantation Stores, or similar products,
including any business awarding franchises or licenses to others to
operate or be involved with any such business.
"STORE" - The Plantation Store you're authorized to own and operate
pursuant to this Agreement.
"SYSTEM" - The distinctive format and method of doing business now or in
the future developed, used and/or modified by us in our sole and
absolute discretion for the operation of a retail sales outlet
specializing in the sale of specialty coffees, teas, food products,
other beverages and other related gift items, including (but not limited
to) (a) distinguishing characteristics related to the image, design,
appearance, layout and color scheme of a Plantation Store, (b) design,
style, color and other distinguishing characteristics of fixtures,
showcases, signs and furnishings, (c) layout, design and selection of
equipment, (d) specifications used in preparing Products for sale, (e)
methods used for selecting, purchasing, marketing, displaying and
selling Products, (f) operating, marketing and other systems, procedures
and standards and (g) the standards of quality, service and cleanliness
used in the operation of a Plantation Store.
"TRADE DRESS" - The Plantation Store design and image developed by us
for Plantation Stores, as it currently exists and as it may be revised
and further developed by us from time-to-time in our sole and absolute
discretion.
"US," "WE," "OUR" OR "FRANCHISOR" - Coffee People, Inc., an Oregon
corporation.
"YOU," "YOUR" OR "FRANCHISEE" - The individual(s) signing this Agreement
as Franchisee. (If there's more than one Franchisee, each is jointly and
severally obligated under
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this Agreement and all other agreements/documents with us.)
2. AWARD OF FRANCHISE
2.1 AWARD OF FRANCHISE. Subject to the provisions of this Agreement, we
award you a franchise to operate a retail Plantation Store at
______________________________________________ only, or a substitute premises
approved (in accordance with Section 4 below) by us, and to use the Coffee
Plantation System, and the Names and Marks and Trade Dress, in the operation
thereof, for a term commencing on the effective date of this Agreement and
ending upon the expiration of the initial or remaining initial term of the lease
or sublease for the premises of your Plantation Store. Termination or expiration
of this Agreement shall constitute a termination or expiration of the Franchise.
You will not conduct any business or other activity from your Plantation Store,
or using the Coffee Plantation System, Name and Marks, Trade Dress or otherwise,
other than as expressly authorized under this Agreement.
You understand and agree that critical to the Coffee Plantation(R)
System and this Agreement, as well as your possible success, is full adherence
by you to each element of the Coffee Plantation(R) System, including (among
other things), use and sale of only those Products, Designated Equipment and
suppliers as are approved by us from time-to-time, your using only prescribed
building and equipment layouts and designs, your strictly adhering to our
then-current standards of quality, service and cleanliness, your close and
personal working relationship with your Plantation Store, and your personal
accountability for the performance of your obligations under this and other
agreements. Accordingly, you will continuously comply with all such (and other)
elements of the then-current Coffee Plantation System. You agree that you will
at all times faithfully, honestly and diligently perform your obligations
hereunder, and that you will continuously exert your best efforts to promote,
enhance and maximize the business of your Plantation Store and the goodwill of
the Name and Marks.
YOUR INITIALS: __________ / __________
2.2 NON-EXCLUSIVITY. The Franchise is a "spot" franchise only and is
awarded for a single location only, with you having no other rights. You do not
have, have not paid for, and have no expectation of receiving any benefits of,
any "exclusive territory" or any "exclusive," "protected" or "reserved"
territorial, similar or other rights, no such rights are granted or will be
inferred and there is, and will be, no limitation of
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any type on the rights of us, or any of the Franchisor-Related Persons/Entities,
to locate and/or consent to the location of other Plantation Stores or other
distribution facilities and/or channels of distribution of any type (including,
without limitation, Motor Moka(R), other drive-through units and/or any other
channels of distribution), whether or not using the Coffee Plantation System,
the Names and Marks and/or Trade Dress, and/or involved in any Similar Business
or otherwise, at any location, regardless of the distance from, impact on, or
vicinity of, your Plantation Store or the number of Plantation Stores, other
outlets or otherwise in any area or market and you have no right to exclude,
control or impose conditions on the location or development of future Coffee
Plantation (or other) Franchisor-owned, franchised or other units of any type
(including, without limitation, Motor Moka(R), other drive-through units and/or
any other channels of distribution) or at any location. In particular, you
understand and agree that some or all of the Franchisor-Related Persons/Entities
currently, and may in the future, own and operate, and/or franchise or otherwise
license, Similar Businesses (and/or other competitive outlets/businesses) and
concepts located (or to be located) anywhere, including in proximity to you, and
that such businesses may now or in the future be in direct or indirect
competition with you.
We (and each and all of the Franchisor-Related Persons/Entities), and
those we, and/or any of the Franchisor-Related Persons/Entities, appoint, retain
(without limitation of any kind or nature) all rights with respect to; (a)
Plantation Stores, the Coffee Plantation System, the Names and Marks and Trade
Dress, the sale of Products and any other products and services under any name,
mark, trade dress or otherwise, anywhere in the world: (b) the right to operate
or grant others the right to operate specialty coffee stores, other coffee
beverage facilities or any other businesses anywhere in the world at such
locations as we (and the Franchisor-Related Persons/Entities) deem appropriate
in our (and their) sole and absolute discretion, regardless of the proximity to,
or impact on, your Plantation Store and on such terms and conditions as we,
and/or any of the Franchisor-Related Persons/Entities wish; (c) the right to
roast, develop, wholesale, market, distribute, sell or otherwise Products or
other items/services through any channel of distribution (including, without
limitation, mail order, Internet, World Wide Web, at wholesale and/or retail,
through grocery stores, supermarkets, discount stores, convenience stores or
otherwise), to be located anywhere and selling, etc. to anyone located anywhere,
whether under or in association with the Coffee Plantation System, the Names and
Marks and/or Trade Dress or any other name, mark, trade dress or otherwise,
regardless of the proximity to, or impact on, your Plantation Store, on such
terms and conditions, as we and/or any of the Franchisor-Related
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Persons/Entities, in our (and their) sole and absolute discretion, wish; and (d)
own, operate, franchise, license or otherwise any business located anywhere,
regardless of the proximity to, or impact on, your Plantation Store, whether
competitive or not and whether or not under the Coffee Plantation (or any other
system), the Names and Marks and/or Trade Dress or any other name, mark, trade
dress or otherwise, including to or with such persons/entities, and on such
terms and conditions, as we and/or any of the Franchisor-Related
Persons/Entities wish, in our (and their) sole and absolute discretion.
Since you do not have any territorial or similar rights, there is no
restriction regarding you soliciting or servicing customers located anywhere,
although you may do so only from your Plantation Store or as otherwise expressly
approved by us in writing.
We (and each and all of the Franchisor-Related Persons/Entities) can
acquire, or engage in any other transaction with, other businesses (competitive
or not), with companies and/or units located anywhere, including in proximity to
your Plantation Store, including arrangements where other units are converted to
the Coffee Plantation(R) or other format (including using the Coffee Plantation
System and/or the Names and Marks and/or Trade Dress) and/or any other format
and/or in which we and/or any of the Franchisor-Related Entities are acquired
and/or company-owned, franchised or other businesses (including your Plantation
Store) are converted to another format (whether competitive or not), maintained
as a new concept under the Coffee Plantation System and/or the Names and Marks
and/or Trade Dress or maintained as a separate concept.
We (and each and all of the Franchisor-Related Persons/Entities) can
develop or become associated with other concepts (including dual branding and/or
other franchise systems) for the same, similar, related, competitive or
different products and/or services, whether or not using the Coffee Plantation
System and/or the Names and Marks and/or Trade Dress, and may grant franchises
or other rights with respect to locations and/or businesses in connection
therewith, in each case in our sole and absolute discretion. Units offering
these concepts can be located anywhere, in our sole and absolute discretion,
including in proximity to your Plantation Store.
YOUR INITIALS: __________ / __________
3. SUCCESSOR FRANCHISE
3.1 YOUR RIGHTS. Your rights and our obligations under
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this Agreement terminate at the expiration of the initial term, but at that
time, subject to the conditions below, you will be eligible to be awarded a
successor franchise (which may materially differ from this Agreement and its
requirements) for your Coffee Plantation Store for a single additional term
(without any further term, successor franchise or right of renewal), equal to
the term of the renewal or extension of the lease or sublease for the premises
of your Plantation Store (or the initial term of the lease or sublease for the
premises, if such initial term of the lease or sublease has not expired as of
the effective date of the renewal of the franchise) on the terms, and under the
conditions, set forth in our then-current form of Franchise Agreement (but
without any provision for further successor franchises or renewal); provided,
however, that in no event shall we be obligated to negotiate or obtain any
renewal, extension or otherwise of any lease or sublease, or solicit or accept
any proposal from the landlord (or other person/entity controlling the premises)
for a renewal, extension or otherwise of any lease or sublease, even if on the
same terms and conditions as have previously been applicable to the premises.
3.2 YOUR OBLIGATIONS. Any award of the successor franchise must meet all
of the following conditions, each of which are agreed to be reasonable, together
with such other conditions as are reasonable at the time:
(1) You (and each affiliate of yours) have fully and continuously
complied with this Agreement and all other agreements with us (and/or any
affiliate of ours), in each case without any defaults, cured or uncured, during
the term (including all of the conditions set out below);
(2) You maintain possession of your Premises and by the
expiration date of this Agreement have refurbished, remodeled, expanded and
otherwise brought your Plantation Store and its operation into full compliance
with all then-applicable standards (including then-applicable design standards,
including equipment, and appearance) applicable to franchises awarded for new
Plantation Stores, are in full compliance with any lease or sublease
requirements applicable to your Plantation Store premises and present evidence
satisfactory to us that you have the right to remain in possession of your
Coffee Plantation Store for the duration of the successor franchise; or, in the
event you are unable to maintain possession of the premises, or in our judgment
your Coffee Plantation Store should be relocated, you secure substitute premises
consented to by us and have furnished, stocked and equipped such premises to
bring your Plantation Store and inventory into full compliance with our
then-current requirements by the expiration date of this Agreement;
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(3) You have given us written notice of election to obtain the
successor franchise, not less than six (6) months, but not more than twelve (12)
months, prior to the expiration of the term of this Agreement. Within ninety
(90) days after our receipt of such timely notice, we will furnish you with
written notice of: (a) any reasons which could cause us not to award the
successor franchise, including any deficiencies which require correction and a
schedule for correction thereof by you, and (b) our then-current requirements
relating to the image, appearance, decoration, furnishing, equipping, stocking
and programs of a Coffee Plantation Store, and a schedule for you to complete
such upgrading, modifications or otherwise, as a condition of receiving the
successor franchise. Prior to the expiration date of this Agreement, you will
fully cure all such deficiencies and fully satisfy all such requirements and
conditions. You understand and agree that we may refuse to award a successor
franchise if, in our reasonable judgment, you (or any affiliate of yours) have
failed to render satisfactory performance as a Franchisee in any operational or
other areas (including, but not limited to, safety, compliance with the System
and all Manuals, adverse impact on the Marks and associated goodwill, etc.),
whether or not such failure constitutes or constituted a default. The award of
the successor franchise will be conditioned (among other things) on your (and
your affiliates') continued compliance with all the terms and conditions of this
Agreement (and all other agreements with us and/or any affiliate) up to the date
of expiration and correction of any deficiencies within the periods specified by
us.
(4) You (and each affiliate of yours) have satisfied all monetary
obligations owed to us and any company affiliated with us and have timely and
fully met such and all other obligations throughout the term of this Agreement;
(5) You've executed our then-current form of Franchise Agreement
and related documents (with appropriate modifications to reflect the fact that
the successor Franchise Agreement relates to the award of a successor franchise
without the right to further successor franchises or renewals), including
guarantees, as are then customarily used by us in the award of franchises for
Coffee Plantation Stores, and the economic and other terms of which may
materially differ from the terms of this Agreement, including, without
limitation, higher royalty fees and/or marketing contributions; provided,
however, you will not be required to pay the then-current initial franchise fee.
In our sole and absolute discretion, and to further your and our mutual
interests in having consistent documents to cover all of your units, and to
update documents to reflect changed competitive and other conditions, we can
require you to sign our then-current form of Franchise Agreement to cover all
Coffee
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Plantation Stores in which you (or any affiliate) then have an interest;
(6) You've complied with our then-current qualification and
training requirements. We may require your personnel to attend and successfully
complete any retraining program(s), and at such times and location(s), as we
then specify. There will be no charge for any retraining program(s), but you'll
be responsible for all travel, meals, lodging and other expenses of your
personnel.;
(7) You (and each owner and/or affiliate of yours) have executed
a general release, in form prescribed by us, of any and all claims, liabilities
and/or obligations, of any nature whatsoever, however arising, known or unknown,
against us and/or any or all of the Franchisor-Related Persons/Entities. If you
fail to execute such a release, the awarding of a successor franchise will be
the equivalent of the granting of such release, since you and we agree that it
would be inappropriate and improper for you to continue in a franchise (or
other) relationship with us, and have the right to use the Marks and System, if
you had any claims, liabilities and/or obligations, of any nature whatsoever,
however arising, known or unknown, against us (or other persons/entities covered
by such a release) or otherwise failed to execute such a release, particularly
in view of the fact that you are not being charged a full initial franchise fee
in connection with the successor franchise; and
(8) You've paid us a non-refundable (unless the successor
franchise is denied) successor franchise fee equal to fifty percent (50%) of our
then-current initial franchise fee for a first franchise (subject to a $10,000
minimum which is subject to adjustment for inflation as described in this
Agreement). We must receive the fee from you at the time of your election.
Failure by you and/or your owners to timely complete such requirements
will be deemed an election by you not to obtain the successor franchise.
YOUR INITIALS: __________ / __________
3.3 RELEASES ON GRANTS OF ADDITIONAL, ETC. FRANCHISES. If, at any time,
you or any affiliate is to receive one or more successor, additional, other
and/or further franchise(s) from us or any of the Franchisor-Related
Persons/Entities, whether or not a successor franchise, you, each of your
affiliates, each owner of the Franchisee, the new franchisee and each owner
thereof will at each such time execute a general release, in form prescribed by
us, of any and all claims, liabilities and/or obligations, of
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any nature whatsoever, however arising, known or unknown, against us and/or any
or all of the Franchisor-Related Persons/Entities, except (where so required by
applicable law) for any claims exclusively related to the offer and sale of the
successor, additional, other and/or further franchise(s).
YOUR INITIALS: __________ / __________
4. LOCATION OF STORE
You may operate your Plantation Store only at the location and premises
identified in Section 2.1, or a substitute location and/or premises hereafter
approved by us. The premises may be used only for the operation of a Plantation
Store. If your lease or sublease for the premises of your Plantation Store
terminates prior to expiration without your fault, or if the premises are
damaged, condemned or otherwise rendered unusable, we will grant permission for
relocation of your Plantation Store to a location and premises consented to by
us in our sole and absolute discretion, within a reasonable period of time and
you, each of your affiliates and each owner of the Franchisee will execute a
general release, in form prescribed by us, of any and all claims, liabilities
and/or obligations, of any nature whatsoever, however arising, known or unknown,
against us and/or any or all of the Franchisor-Related Persons/Entities. You
must lease or sublease and develop such premises in compliance with
then-applicable standards utilized in the granting of franchises for a
Plantation Store and the term of the Franchise will be extended to coincide with
the initial term of the lease or sublease for the substitute premises. Any such
relocation shall be at your sole expense.
5. DEVELOPMENT AND OPENING OF YOUR STORE
5.1 LEASE OR SUBLEASE OF PREMISES OF YOUR STORE. You will,
contemporaneously with the execution of this Agreement or such later date
specified by us, lease or sublease the premises of your Plantation Store
identified in Section 2.1 in the form and manner prescribed by us and deliver a
copy of such executed lease or sublease to us immediately after execution
thereof. We have the right to review and consent to any lease or sublease for
the premises of your Plantation Store. You agree not to execute any lease or
sublease which has not been consented to in writing by us. We may require that
the premises of your Plantation Store be subleased directly from us or our
affiliate according to the terms of our, or our affiliate's, standard form of
sublease or, at our option, that the lease obtained by you be collaterally
assigned to us pursuant to the terms of our standard collateral assignment of
lease form.
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Any lease or sublease for the Premises must be reasonably satisfactory
to us and must, in any event, contain all of the following provisions, each of
which you agree is reasonable:
(a) Providing us with the right, at our sole option at any time and
without further consideration, to receive an assignment of your leasehold
interest and take possession of the Premises, whether on termination,
cancellation, recission or expiration of your rights under any lease/sublease or
under this Agreement or otherwise, in each case without the lessor's or
sublessor's consent and specifying that the lessor/sublessor will accept us as a
substitute tenant on notice from us that we are exercising our rights. (If we
exercise this option and you, and each affiliate of yours, are not in default,
or under notice of default, and if your rights have not been terminated or
expired, under this Agreement or any other agreement with us or any affiliate of
ours, we'll sublease the Premises to you on the same terms as we lease it,
subject to our usual security deposit and other conditions.) You agree to do all
acts necessary or appropriate to accomplish such assignment, on our request and
will, at the same time you sign this Agreement, sign the Collateral Assignment
of Lease attached hereto;
(b) Obligating the lessor/sublessor to provide us with all sales and
other information it may have, whether provided by you or otherwise, related to
the operation of your Plantation Store;
(c) Evidencing your right to operate your Plantation Store in accordance
this Agreement and the Manuals, subject only to the provisions of applicable
law;
(d) Prohibiting you from subleasing or assigning all or any part of your
rights, extending the term or renewing or modifying the lease without our prior
written consent, which may be withheld in our sole and absolute discretion;
(e) Requiring the lessor/sublessor to concurrently provide us with a
copy of any written notice of default under the lease sent to you and granting
us the right (but without any obligation on our part) to cure any default under
the lease, if you fail to do so, within fifteen (15) days after the expiration
of the period in which you can cure the default and then, at our further option,
to receive an assignment of your leasehold interest but without any liability
for any other defaults of yours;
(f) Providing that the premises will be used only for the operation of a
Plantation Store pursuant to a Franchise Agreement with us in good standing;
(g) Providing that any default by the Franchisee under this
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Agreement or any other agreement with us (or any of our affiliates) may, at our
option, constitute a default under the lease (you agreeing that any default by
you under the lease may, at our option, constitute a default under this
Agreement); and
(h) Providing that no sale, assignment or transfer of your leasehold
interest will be approved or otherwise consented to, or any change, addition, or
other modification to the lease or other instruments be made, without obtaining
our prior written consent.
You won't execute a lease or sublease, or any modification or amendment,
without our prior written consent, which we can withhold in our sole and
absolute discretion. You'll deliver a copy of the signed lease or sublease to us
within five (5) days after it's signed. If you own the Premises and we request,
you'll enter into a lease with us for a term equal to the term of the Franchise
(with matching renewal options) on commercially reasonable terms, and will
sublease the Premises from us on the same terms as the prime lease.
If such provisions are not included in the lease or other instruments,
we may, without liability and at our sole option at any time (a) require that
you immediately cause such provisions to be inserted or (b) terminate your
rights and our obligations under this Agreement. If you own (or acquire) the
Premises, you will enter into arrangements with us granting us benefits
substantially identical to those set out above.
YOUR INITIALS: __________ / __________
5.2 DEVELOPMENT OF YOUR PLANTATION STORE. Unless we exercise our option
to provide store development services by us or an affiliate (which we have no
obligation to do), we'll furnish you with (and may update from time-to-time)
specifications and other requirements for design, decoration, layout, equipment,
furniture, fixtures, signs and other items for Plantation Stores (the
"Plantation Store Design Specifications"), with which you'll promptly comply.
You agree that the Plantation Store Design Specifications are an integral part
of the System and that your Plantation Store will be developed, constructed,
designed and operated in full compliance with the latest Plantation Store Design
Specifications at all times.
We may require you to use our services (or those of an entity we
designate) as your agent (and at your sole expense) to develop, build-out, etc.
your Plantation Store, pursuant to the terms and conditions, and including the
compensation and other arrangements, of our then-current Store Development
Agreement, but we have no obligation to provide such services until and
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unless we require you to sign such Agreement. Your Plantation Store Development
Agreement will set forth the fee paid to us (or our affiliates) for its services
(the "Development Fee") and the parties' other responsibilities.
You won't make any commitments with respect to any location or operate a
Plantation Store and/or use the System or any of the Marks, from or at any
location (nor will you relocate your Plantation Store) until and unless we've
accepted such location. If there is any disagreement or dispute relating to any
aspect of your site, you and we will resolve it through good faith
mediation/arbitration as provided in this Agreement.
While we may, as a courtesy, assist you in evaluating or negotiating any
lease (or other documents or arrangements) or otherwise assist you in your
efforts to select and obtain a site by providing consultation, evaluation and/or
otherwise (including providing references to potential contractors, real estate
agents, site selection specialists and other professionals, some of whom may be
affiliated and/or associated with us), we strongly recommend that you have all
matters related to site selection and securing reviewed by your own independent
attorney, real estate broker, architect and other professionals retained by you.
While the selection of a site by you is subject to our reasonable consent, and
although this franchise may be awarded for a specific existing location, neither
we nor any company or person will recommend or approve any particular location
or any related services to you. Acceptance by us of any location is in no way a
recommendation, approval or endorsement of such location nor a representation or
warranty as to its legal or business availability, suitability, appropriateness,
success potential or otherwise and we cannot guarantee success for any location.
You're the only person and/or company with any liability or responsibility for
those decisions and matters.
In any case, you understand and agree that the selection and securing of
a site, the negotiation of a lease or purchase, the selection of developers,
real estate agents, site selection specialists, contractors, etc., financing and
all other matters related in any way to your site are exclusively and entirely
your sole and ultimate responsibility and that neither we, any of
Franchisor-Related Persons/Entities nor any other person or company affiliated
or associated with us in any way will have any liability or responsibility with
respect to any matters related in any way to the site for your Plantation Store,
including (but not limited to) site location, identification, evaluation,
selection, lease/purchase negotiation, financing, review of documents,
construction, build out, development, compliance with local requirements,
suitability for any use or purpose and/or any other aspect of the development
process (and any related steps)
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or otherwise, all such responsibilities being solely yours.
We will (unless you and we execute a Store Development Agreement) make
available to you standard plans and specifications to be utilized by you in the
construction or otherwise of your Plantation Store. You'll obtain, at your sole
expense, all further qualified architectural and engineering services to prepare
surveys, site and foundation plans and adapt any plans and specifications to
your location and all applicable laws, regulations and ordinances. Any changes
from plans provided by us must be submitted to us for our consent, which we may
grant, condition or withhold in our sole and absolute discretion. Neither we nor
any other person or company recommended by and/or affiliated in any way with us
will have any liability with respect to any plans, specifications and/or other
items/services provided to you and/or to be utilized by you in the construction
or otherwise of your Plantation Store, or any deviations or modifications
therefrom, nor with respect to the preparation, construction, operation or
otherwise of your Plantation Store, whether in accordance with standard plans or
otherwise, all such responsibilities being solely yours.
We make no representations, guarantees or otherwise as to the costs of
development and build-out (or otherwise) of your Plantation Store, the date on
which your Plantation Store will be open for business or otherwise, such matters
not being within our sole control.
You agree that without our ability to limit our (and others') liability
as set forth in this Agreement (and, in particular, this Section), we wouldn't
be willing to award this Franchise to you (and would consider developing the
location as a company-owned unit) or to be involved in any way in assisting you
in any of these matters.
YOUR INITIALS: __________ / __________
5.3 FIXTURES, EQUIPMENT, STOREFRONT, SUPPLIES AND SIGNS. Your Plantation
Store's initial fixtures, equipment and Storefront shall be part of our
development of your Plantation Store. Thereafter, you agree to use in the
operation of your Plantation Store only those fixtures, items of equipment,
supplies and signs that we have approved for a Plantation Store as meeting its
specifications and standards for appearance, function, design, quality and
performance and you further agree to place or display at the premises of your
Plantation Store (interior and exterior) only such signs, emblems, lettering,
logos and display materials that are from time to time approved in writing by
us, in each case at your sole cost and expense. If
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you propose to purchase, lease or otherwise use any fixture, equipment, supply
or sign which is not then approved by us, you shall first notify us in writing
and shall submit to us sufficient specifications, photographs, drawings and/or
other information or samples for a determination by us of whether such fixture,
equipment, supply or sign complies with its specifications and standards, which
determination shall be made and communicated in writing to you within a
reasonable time.
5.4 STORE OPENING. You won't open your Plantation Store for business
until: (1) we notify you that all of your pre-opening obligations have been
fulfilled; (2) pre-opening training of all of your personnel has been completed;
(3) all amounts then due us (or any affiliate) have been paid and all
pre-opening obligations of yours fully performed; and (4) we've been furnished
with copies of all insurance policies (or such other evidence of insurance
coverage and payment of premiums as we request) and leases/subleases as required
by this Agreement. You agree to use your best efforts to merchandise your
Plantation Store as soon as possible after obtaining possession of your
Plantation Store premises and to open your Plantation Store for business and
commence the conduct of its business by the period required by your lease or
sublease or, if sooner, within five (5) days after notice from us that it is in
suitable condition therefor. We will supply our employee who will assist you for
a period of up to seven (7) days in the opening of your Store and we may, in our
sole and absolute discretion, provide similar assistance for up to five (5)
additional days. In addition, we may provide our employee for such additional
days(s) as we deem appropriate in assisting you with the opening of your
Plantation Store. If you (or your affiliate) already own(s) a Plantation Store,
all pre-opening and opening assistance will be provided at our sole and absolute
discretion.
5.5 TERMINATION UPON YOUR FAILURE TO OPEN YOUR STORE. If you fail to
lease or sublease your Plantation Store premises as required by this Agreement,
or fail to proceed with the merchandising or fail to open your Plantation Store
by the date required in this Agreement, we, at our sole option, shall have the
right to terminate this Agreement effective upon giving written notice to you,
in each case with no refund of any amounts paid to us or any affiliate. In
connection with such termination, you will execute documents acceptable to us,
providing for (1) continuation of your indemnification, confidentiality and
non-competition obligations and the dispute avoidance and resolution provisions
of this Agreement, including those of Article 19, together with the provisions
of Article 23, and (2) a general release, in form prescribed by us, of any and
all claims, liabilities and/or obligations, of any nature whatsoever, however
arising, known or unknown, against us and/or
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any or all of the Franchisor-Related Persons/Entities.
YOUR INITIALS: __________ / __________
5.6 GRAND OPENING PROGRAM. You will spend at least One Thousand Dollars
($1,000) (we recommend $4,000) to conduct grand opening advertising and
promotions, such advertising and promotions (which must be approved in advance
in writing by us) to occur during a time period designated by us.
6. TRAINING AND OPERATING ASSISTANCE
6.1 TRAINING. Prior to the opening of your Plantation Store, we will
furnish, and you (or your controlling shareholder, general partner, managing
member or similar person if you are a business entity), shall attend, and
complete to our satisfaction, a training program on the operation of a
Plantation Store, furnished at such time and place as we may designate. Such
training will be given by us without charge, but you will be solely responsible
for the compensation of the trainee, as well as such trainee's travel, lodging
and personal expenses. Such initial training will consist of approximately
fifteen (15) days or such additional time as we may elect. If you (or your
affiliate) already own(s) a Plantation Store, all training will be provided at
our sole and absolute discretion.
Upon your successful completion of the training program, you may (at our
option) be permitted to train your Plantation Store managers. We do not have to
provide training for your Plantation Store managers but we can require that each
of your Plantation Store managers attend, and complete to our satisfaction, such
initial and ongoing training as we require from time-to-time. We may charge a
reasonable fee for training your Plantation Store managers.
You'll be responsible for all travel, living, incidental and other
expenses and compensation of you and your personnel attending any training
program.
If we, in our sole and absolute discretion, determine that you (or a
managing partner or shareholder consented to by us) have not successfully
completed (or are not making satisfactory progress in) your initial training, we
may cancel all of your rights (and all of our obligations) under this Agreement
and/or any other agreements with you and return the Initial Franchise Fee (less
$10,000 to cover our sales, training and other expenses, among other things) to
you, and you will return all manuals and you (and each affiliate of yours)
execute documentation providing for a general release, in a form
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prescribed by us, of any and all claims, liabilities and/or obligations, of any
nature whatsoever, however arising, known or unknown, against us and/or any or
all of the Franchisor-Related Persons/Entities and we will provide you with a
similar release, except that your indemnity, non-competition, confidentiality
obligations, and the dispute avoidance and resolution provisions of this
Agreement, including those of Article 19, together with the provisions of
Article 23, will be preserved, and at our option, if the premises were not
leased from us or our affiliates, you will assign the lease or sublets the
premises to us or our affiliates. We will not exercise this termination right
until you have had at least two (2) individuals (one of whom may be you) fail to
successfully complete training.
If, whether as a result of observations, test results or otherwise
during initial training or thereafter (including during operation of your
Plantation Store) we determine, in our sole and absolute discretion, that it's
appropriate, we can require that a manager or other person designated by us be
placed in your Plantation Store to supervise its day-to-day operations for the
purpose of assuring compliance with our standards and you will pay all costs in
connection therewith, including salary, normal corporate benefits, travel,
meals, lodging and incidental expenses.
You (or a managing partner or shareholder consented to by us) and your
Plantation Store manager must attend and successfully complete additional and/or
refresher training programs (if we designate them as mandatory) conducted at
location(s) specified by us, including national and regional conferences,
conventions and meetings, and your other employees may be required to attend
mandatory training programs presented by us at your Plantation Store. We may
charge a reasonable fee for any training programs, aside from the initial owner
training which is included in the Initial Franchise Fee.
6.2 HIRING AND TRAINING OF EMPLOYEES BY YOU. You (or a manager meeting
all of our training and other requirements) will hire all employees of your
Plantation Store, be exclusively responsible for the terms of their employment
and compensation and implement a training program for employees of your
Plantation Store in compliance with our standards. You agree to maintain at all
times a staff of trained employees sufficient to operate your Plantation Store
in compliance with our standards. You agree that all management personnel hired
by you may be required to sign an Employment Agreement containing
non-competition and confidential information covenants substantially similar to
those contained in this Agreement.
6.3 OPERATING ASSISTANCE. We will advise you from time to
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time of operating problems of your Plantation Store disclosed by reports
submitted to or visitations made by us. We will furnish to you such assistance
in connection with the operation of your Plantation Store as is from time to
time deemed appropriate by us. Operating assistance may consist of advice and
guidance with respect to:
1. methods and operating procedures to be utilized by a Plantation
Store;
2. additional Products and services authorized for a Plantation
Store;
3. purchasing of Products and supplies;
4. formulating and implementing advertising, merchandising and
promotional programs; and
5. the establishment of administrative, bookkeeping, accounting,
inventory control, sales training and general operating
procedures for the proper operation of a Plantation Store.
You understand and agree that all advice and guidance provided by us is
only supportive of the operation of your Plantation Store and that the overall
success of your Plantation Store is primarily dependent upon your business
abilities and efforts. We will not charge you for such operating assistance
unless such operating assistance is made necessary by your failure to comply
with this Agreement or if you request operating assistance in excess of what is
normally provided by us. Any such charges will be reasonable and payable upon
your receipt of an invoice for the same. In addition, we reserve the right to
impose, and you will pay, reasonable fines and penalties if you repeatedly
refuse or fail to comply with this Agreement and/our our standards and
specifications.
6.4 COMPUTER HARDWARE AND SOFTWARE SYSTEMS. Since the effective and
efficient operation of a Plantation Store may be intimately connected with the
use and maintenance of appropriate computer hardware and software systems, with
direct interconnection to (and access by) our computer hardware and software
systems, you must purchase, use, maintain and update computer and other systems
(including point-of-sale systems) and software programs which meet our
specifications as they evolve over time and which, in some cases, may only be
available through us and/or our affiliates. You must maintain your systems
on-line to provide full access for computer systems used by us and you must
promptly update and otherwise change your computer hardware and software systems
as we require from time-to-time, at
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your expense. We may require that all maintenance, support, upgrades, etc. be
performed by us, an affiliate or a supplier designated by us. You'll pay all
amounts charged by any supplier or licensor of the systems and programs used by
you, including charges for use, maintenance, support and/or update of these
systems or programs.
7. MANUAL
During the term of the Franchise, we will loan you (or allow you
electronic or other access to), one copy of a manual, which consists of one or
more manuals (hereinafter referred to as the "Manual"), for a Plantation Store
containing mandatory and suggested specifications, standards and operating
procedures prescribed from time to time by us for a Plantation Store and
information relative to your obligations hereunder. We can modify any aspect of
the Manuals, the Coffee Plantation(R) System or specifications, standards,
policies and procedures of Coffee Plantation Stores, to, among other things,
specify brands, types and/or models of equipment which must be used by you in
the operation of your Coffee Plantation Store, to specify changes in the
Products and Services used and/or offered by you, and/or to specify changes in
the decor, format, image, products, services, operations or otherwise of a
Coffee Plantation Store. You'll promptly and continuously comply, at your sole
expense, with all provisions of, and additions/deletions/changes to, the
Manuals. You have no expectation that the Manuals (and the Coffee Plantation(R)
System) will not be changed over time and you and we, in fact, anticipate that
such changes will take place, in response to competitive challenges, commercial
opportunities and otherwise. You'll keep your copy of the Manuals current by
immediately inserting all modified pages and (at our option) destroying or
returning to us all superseded material. In the event of a dispute about the
contents of the Manuals, the master copies maintained by us will be controlling.
Any such additions/deletions/changes will take precedence over all prior
communications and in the event of a dispute, the master Manuals maintained at
our office shall control. The provisions of the Manuals as modified from time to
time by us and communicated to you constitute provisions of this Agreement and
as such are binding upon you. The Manuals contain proprietary information of
ours and you agree to keep the Manuals and information contained therein
confidential at all times during and after the term of the Franchise.
YOUR INITIALS: __________ / __________
8. STORE IMAGE AND OPERATING STANDARDS
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8.1 CONDITION AND APPEARANCE OF YOUR STORE, PERIODIC UPGRADING. Because
your Store's full compliance with the Coffee Plantation System is a vital
component in the possible success of all Coffee Plantation outlets and can
directly affect the value of the Names and Marks and Trade Dress and their
associated goodwill, you agree that: (1) neither your Plantation Store nor the
Premises will be used for any purposes other than the operation of a Plantation
Store in full compliance with this Agreement and the Manuals; (2) you'll
maintain the condition and appearance of your Plantation Store, its equipment,
furniture, fixtures, signs, and the Premises in accordance with our
specifications and standards and consistent with the approved image of a
Plantation Store and as provided under the Manuals, as changed from time-to-time
and as an attractive, clean, convenient and efficiently operated specialty
retail food store offering high quality Products and efficient and courteous
Services; (3) you will perform such ongoing repair, maintenance and upgrading,
with respect to the decor, equipment, furniture, fixtures, signs and otherwise,
of your Plantation Store and the Premises, as may be required by us from
time-to-time to maintain its condition, appearance, and efficient operation,
including, without limitation: (a) thorough cleaning, repainting and
redecorating of the interior and exterior; (b) interior and exterior repair of
the Premises; (c) repair or replacement of damaged, worn out or obsolete
equipment, furniture, fixtures, signs and otherwise and as is required by your
lease or sublease; (4) you will not make any material alterations or
replacements to the Premises or other items, or to the appearance of your
Plantation Store as originally approved by us, without our prior written consent
and any approval that may be necessary under the lease or sublease for the
premises; and (5) you will place or display at the Premises (interior and
exterior) and on all other items only such signs, emblems, lettering, logos and
display and advertising materials that are from time-to-time designated by us;
in each case at your sole cost. You will use and display the Names and Marks and
Trade Dress only in such manner, and using such equipment and other systems, as
we authorize from time-to-time, in each case promptly complying with any changes
we may require, all at your sole cost and expense.
If at any time in our reasonable judgment the general state of repair,
appearance or cleanliness of the premises of your Plantation Store or its
fixtures, equipment or signs does not meet our standards, we will so notify you,
specifying the action to be taken by you to correct such deficiency. If you fail
or refuse to initiate within fifteen (15) days after receipt of such notice or
such lesser period required by the lease or sublease, and thereafter continue a
bona fide program to undertake and complete any such required maintenance, we
may, but will not be obligated, to enter upon the premises and effect such
repairs,
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painting and replacement of fixtures, equipment or signs on your behalf and you
will pay the entire costs therefor to us on demand.
We may, at intervals and to the extent determined by us in our sole and
absolute discretion, require you to upgrade your Plantation Store and the
Premises (including, but not limited to, remodeling, expansion, redecoration,
re-equipping, refurbishment and refurnishing the Premises, your Plantation Store
and changing any products and services offered) to meet our then-current
standards and requirements, which may require additional investment by you, and,
subject to approval by us of plans, layouts, designs and otherwise, and you will
promptly and fully comply with all such requirements.
YOUR INITIALS: __________ / __________
8.2 DESIGNATED EQUIPMENT, PRODUCTS AND/OR SUPPLIERS. The reputation and
goodwill of each Plantation Store is based on, and can be maintained only by,
the satisfaction of all customers who rely on the availability of a wide variety
of quality Designated Equipment, Products and Services, compliance with the
Coffee Plantation System and courteous and efficient service provided by all
employees of Plantation Stores. We've already specified, and plan to specify in
the future, various suppliers of Designated Equipment, Products and/or Services,
as well as other items, to be used or provided by Plantation Stores and that
meet our standards and requirements, in each case in our sole and absolute
discretion. Your Plantation Store will purchase/lease, use and offer all of, and
only, such types, brands and/or quality of Designated Equipment, Products and
Services as we designate and, where we so require, use only suppliers as
designated by us. Designated suppliers may include, and may be limited to, us
and/or companies affiliated with us. We may designate a single supplier or
limited number of suppliers, may designate a supplier only as to certain items
and may require concentration of purchases with one or more suppliers to obtain
lower prices, advertising support and/or other benefits in our sole and absolute
discretion. Specification of a supplier may be conditioned on requirements
relating to frequency of delivery, standards of service, including prompt
attention to complaints, or other criteria, and may be temporary, pending a
further evaluation of such supplier by us, in each case in our sole and absolute
discretion.
You shall at all times maintain an adequate and representative inventory
of Products, sufficient in quality, quantity and variety, to satisfy customer
demand and realize the full potential of your Plantation Store, as prescribed
from time
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to time by us. The inventory of your Plantation Store shall contain a full
inventory of each Coffee Plantation brand or other private brands of ours which
shall be given prominent display. We and our affiliates shall not have any
liability to you if we or they are at any time unable for any reason to offer
any Coffee Plantation brand or other brand of Products for purchase by you or at
competitive prices. The Products may be offered by an affiliate of us.
You'll notify us in writing (and submit to us such information,
specifications, and samples as we request) if you propose to purchase, use or
offer any type, brand and/or quality of items that have not been previously
specified by us, or if you propose to use any supplier who has not been
previously specified by us for the proposed item and will arrange for
pre-payment of reasonable charges connected with our review and evaluation of
any proposal. We'll notify you within a reasonable time whether or not you're
authorized to purchase or use the proposed type, brand and/or model of such
items or to deal with the proposed supplier. We may, from time-to-time, withhold
and/or revoke our approval of particular items or suppliers in our sole and
absolute discretion and business judgment. On receipt of written notice of
revocation, you must immediately cease to sell or use any disapproved items and
cease to deal with or use items from any such suppliers, unless we, in our sole
and absolute discretion, direct otherwise.
You are prohibited from developing, creating, generating, owning,
licensing, leasing or otherwise utilizing any computer media and/or electronic
media (including but not limited to the Internet, world wide web, bulletin
boards, news group and/or Telnet) which may be used, or in any manner uses,
displays or utilizes the Coffee Plantation trademarks, tradenames, or other
commercial symbols or offers to sell or sells any of the Products and/or
services which are or may at a later date be offered for sale in Plantation
Stores. If you desire to utilize any computerized or electronic media in
conjunction with the operation of your Plantation Store, you must obtain our
prior written approval of such usage, and we may in our sole and absolute
discretion approve or not approve such usage. If we grant approval, we or our
affiliates will be the owners of and/or control the approved computerized or
electronic content and media.
YOUR INITIALS: __________ / __________
8.3 SPECIFICATIONS, STANDARDS AND OPERATING PROCEDURES. You agree that
the operation of your Plantation Store, continuously in compliance with our high
standards, is vitally
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important to us and other Coffee Plantation Franchisees and is a vital element
in the possible success of your Plantation Store, the Plantation Stores of other
Franchisees and of us and that a lack of uniform high standards can place all
Plantation operators at a competitive disadvantage and in a position of business
risk. Accordingly, you'll operate your Plantation Store, and use the Marks, in
prompt, continuous and full compliance with the Coffee Plantation(R) System and
the Manuals, as each is modified by us from time-to-time in our sole and
absolute discretion and without limitation, you promptly complying with each
such modification.
In particular, you'll promptly comply with all of our ongoing
requirements, standards and operating procedures relating to the operation,
appearance, function, cleanliness, menu, products, ingredients, days and hours
of operation, and otherwise of a Plantation Store (including, without
limitation, use of specified equipment, products, services, programs and
computer hardware and software), and with our other requirements for a
Plantation Store, as they may be developed or changed by us from time-to-time in
our sole and absolute discretion. You'll purchase, use and offer each of the
systems, services, equipment and products designated by us and, where we so
require, use only suppliers authorized by us and will not use or offer any
systems, services, equipment, products or suppliers not specified by us.
Mandatory specifications, standards and operating procedures prescribed from
time-to-time by us in the Manuals, or otherwise communicated to you, will
constitute provisions of this Agreement as if fully set forth herein. All
references to this Agreement include all such mandatory specifications,
standards and operating procedures.
YOUR INITIALS: __________ / __________
8.4 SUPPLIERS OF SPECIALTY COFFEE. In recognition that the quality and
uniformity of the specialty coffee and tea carried by Plantation Stores is of
paramount importance to the reputation and goodwill of Plantation Stores, you
must purchase all coffee offered at your Plantation Store from us or an
affiliate of ours. In the event our affiliates cease supplying you with coffee,
we may designate a supplier or suppliers of coffee. In such event, in addition
to the criteria listed elsewhere in this Agreement, a proposed supplier must
also meet our criteria as to the size of the coffee bean, the method of
preparation of the bean, the region of origin of the bean, the quality of
flavoring used in bean preparation, the consistency of bean color and moisture
content after roasting, the type of packaging and the type of roaster used and
other standards as we designate from time-to-time in our sole and absolute
discretion.
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YOUR INITIALS: __________ / __________
8.5 USE OF SUPPLIES IMPRINTED WITH NAMES AND MARKS. You shall only use
displays, boxes, bags, paper, forms, packaging materials, labels and other
Products and supplies imprinted with the Names and Marks as prescribed from time
to time by us.
8.6 STANDARDS OF SERVICE. Your Plantation Store shall at all times give
prompt, courteous and efficient service to its customers. Among other things, we
may specify (and change from time-to-time) service standards and you will comply
with all then-current service and other standards. You and your Plantation Store
shall in all dealings with customers, suppliers and the public adhere to the
highest standards of honesty, integrity, fair dealing and ethical conduct.
8.7 PRODUCT STANDARDS. You shall not advertise, offer for sale, sell or
otherwise distribute any Products or other items which do not meet our
then-current standards. All reasonable complaints by your customers shall be
honored by you pursuant to the policies set-forth in the Manuals.
8.8 SPECIFICATIONS, STANDARDS AND PROCEDURES. You agree to comply with
all specifications, standards and operating procedures (whether contained in the
Manuals or any other document or notice and as issued and/or changed by us from
time-to-time in our sole and absolute discretion) relating to the operation of a
Plantation Store, including, without limitation, those relating to:
1) recipes, preparation procedures and authorized ingredients;
2) type, quality and shelf life of Products offered;
3) Product dating programs, including removal of "out of date"
Product;
4) merchandising techniques;
5) the safety, maintenance, cleanliness, function and appearance of
the Plantation Store premises and its fixtures, equipment and
signs;
6) uniforms and aprons to be worn by and general appearance of
Plantation Store employees;
7) use of Names and Marks and Trade Dress;
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8) hours during which your Plantation Store will be open for
business;
9) use and retention of standard forms;
10) use and illumination of signs, posters, displays, standard
formats and similar items; and
11) identification of you as the owner of your Plantation Store.
You're required to participate in any and all programs which we elect to
utilize as operational tools in the operation of your Plantation Store. These
operational tools may include (but are not limited to) programs involving
customer satisfaction, quality control, operational standards, product standards
and the like (the "Programs"). The Programs may be created or developed by us,
our affiliates or by third parties and the content, duration and frequency of
the Programs will vary and will be determined solely by us. You will be required
to pay for the Programs and the costs will vary according to the program and
frequency of the program.
8.9 COMPLIANCE WITH LAWS AND GOOD BUSINESS PRACTICES. You shall secure
and maintain in force all required licenses, permits and certificates relating
to the operation of your Plantation Store and operate your Plantation Store in
full compliance with all applicable laws, ordinances and regulations. All
advertising and promotion by you shall be completely factual and shall conform
to the highest standards of ethical advertising. You agrees to refrain from any
business or advertising practice which may be injurious to our business and/or
the goodwill associated with the Names and Marks and Trade Dress and other
Plantation Stores.
8.10 MANAGEMENT OF YOUR PLANTATION STORE. Your Plantation Store must be
managed only by you, or a full-time manager, who (in each case) has successfully
completed our training and other requirements, which may change over time. The
employment of any full-time manager is subject to our prior approval.
Notwithstanding the employment of a full-time manager, you (or the Franchisee's
controlling owner if Franchisee is a business entity) must attend and complete
initial and any required ongoing training, unless waived by us, in our sole and
absolute discretion. If you have completed the Initial Training, you shall be
qualified to train your managers, unless we direct otherwise. If we, in our sole
and absolute discretion, determine that your full-time manager is not properly
performing his or her duties, you shall take such corrective measures as are
necessary to immediately rectify the situation. You shall keep us informed
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at all times of the identity of any employee(s) acting as full-time manager(s)
of your Plantation Store.
If you (or any affiliate) owns and/or operates more than one Plantation
Store, the manager of each of your Plantation Stores must have at least a twenty
five percent (25%) equity interest in such Plantation Store(s.) You will have 90
days to replace any 25% equity manager.
8.11 EXCLUSIVE RELATIONSHIP, RESTRICTIONS ON SIMILAR BUSINESSES DURING
FRANCHISE TERM AND AFTER TRANSFER, TERMINATION, EXPIRATION, REPURCHASE, ETC. You
and we share a mutual interest in avoiding situations where persons or companies
who are, or have been, Coffee Plantation Franchisees operate or otherwise become
involved with, a Similar Business, anywhere, either during the term of, or after
the termination or expiration, of your rights under, this Agreement.
This mutual interest exists since you and we both agree that (1) such
activities would, as a practical and realistic business matter, make use of
techniques, methods, systems and procedures learned by the operator while
he/she/it was a Coffee Plantation Franchisee, (2) the operation of a Similar
Business, irrespective of location or vicinity to any existing or future
Plantation Store, would inevitably draw on and benefit from the operator's
training and experience as a Coffee Plantation Franchisee, including techniques
not known to you or other operators prior to becoming a Coffee Plantation
Franchisee, (3) operation of such a business, and use of any such techniques,
methods, systems and procedures, would damage both us and other Coffee
Plantation Franchisees and unfairly limit reasonable expansion alternatives open
to us and our Franchisees, particularly in light of the limited number of goods
and services provided by us and our Franchisees and the limited number of
favorable locations or areas available, thereby placing us and other Coffee
Plantation operators at a competitive disadvantage, (4) there would be an
extreme difficulty and expense involved in accurately determining actual
financial impact from such activities by a current or former Coffee Plantation
Franchisee, (5) such activities would expose us and our Franchisees to a
strategy under which a person could acquire a Plantation franchise, learn all of
our methods of doing business including innovations by other Coffee Plantation
Franchisees, default under the franchise agreement or otherwise obtain
termination or expiration and then open an unlimited number of locations drawing
on their experience and training as a Coffee Plantation Franchisee, including
access to favorable locations, (6) the possibility of such occurrences would
discourage the free flow of information and innovation within the Coffee
Plantation(R) System, resulting in reduced growth and a decline in the value of
the investments made by us and our
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Franchisees in Plantation Stores and the System, making subsequent sales or
operation of Plantation franchises in the area of a Similar Business, or other
areas, extremely difficult and placing us and our Franchisees at a disadvantage
in the competitive marketplace, (7) such activities could reduce your level of
time and attention given to your operation of an Plantation Store and thereby
reduce its chances for success, and (8) such activities would constitute an
unfair and inequitable method of competition with us and other Coffee Plantation
Franchisees and is the type of behavior to which you (as a Coffee Plantation
Franchisee) would strenuously object if engaged in by another Coffee Plantation
Franchisee.
In addition, you acknowledge and agree that (1) you will receive
valuable training and confidential information throughout the term of the
Franchise, including, without limitation, information regarding our promotional,
operation, sales, and marketing methods and techniques and the System which was
not known to you before becoming a Coffee Plantation Franchisee, (2) we would be
unable to protect such confidential information and other information and
techniques against unauthorized use or disclosure, would be unable to encourage
a free exchange of ideas and information among Coffee Plantation Franchisees and
the goodwill and other assets of our business and those of other Coffee
Plantation Franchisees would be at risk if franchise owners and members of their
immediate families were permitted to hold interests in or perform services for a
Similar Business during or after the term of the Franchise Agreement, (3) your
ownership and/or operation of, or any other relationship with, a Similar
Business would necessarily benefit from, and be inconsistent with, your status
and obligations as a Coffee Plantation Franchisee and (4) the requirements of
this section have been expressly bargained for and are an express condition of
our award of the Franchise to you.
You acknowledge that you've considered, as reasonable business
alternatives, other franchise opportunities, as well as the possibility of your
entering our industry as a non-franchised participant (in each instance not
being subject to the restrictions of this Agreement), each of the restrictions
on competition contained in this Agreement (including, but not limited to, those
in this Section) are fair, reasonable and necessary for the protection of all
members of the Plantation family of companies, including you and your fellow
Coffee Plantation Franchisees and represent a reasonable balancing of the
legitimate long-term interests of us, you and other Coffee Plantation
Franchisees, and will not impose any undue hardship on you, since you have other
valuable opportunities, skills, experience, education and abilities unrelated to
the ownership and/or operation of a Plantation Store and which will provide you
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with the opportunity to derive significant income from other endeavors.
Therefore, to protect your and our investments and those of all Coffee
Plantation Franchisees, you and we agree as follows: (1) during the term of this
Agreement (and any other Franchise Agreement with us) and any extension thereof,
and (2) for three (3) years after any transfer, repurchase, the termination
(whether for cause or otherwise) of your rights, the expiration of this (or any
other) Agreement (without award of an Additional Term), and/or the date on which
you cease to operate your last Plantation Store, whichever is later, neither
you, any affiliate of yours, nor any shareholder or partner of yours (in the
event you are or become a corporation or partnership), nor any member of your
immediate family nor any member of the immediate family of any affiliate,
shareholder or partner of yours will [except for Plantation Stores operated in
good standing under franchise agreements with us]: (a) have any direct or
indirect interest as a disclosed or beneficial owner in any Similar Business
located, or operating units located, anywhere; (b) have any direct or indirect
interest (whether through a member of the immediate family of yours or any owner
of you, or otherwise) as a disclosed or beneficial owner in any entity which is
awarding franchises or licenses or establishing joint ventures or other business
enterprises for the operation of Similar Businesses located, or operating units
located, anywhere; (c) perform services as a director, officer, manager,
employee, consultant, representative, agent, or otherwise for any Similar
Business or any entity which is awarding franchises or licenses or establishing
joint ventures to operate Similar Businesses anywhere; or (d) directly or
indirectly employ, or seek to employ, any person who is employed by us or any
affiliate or by any other Coffee Plantation Franchisee, nor induce nor attempt
to induce any that person to leave said employment without the prior written
consent of us and that person's employer; provided that if the foregoing
restriction regarding our and the employer's consent is unenforceable, you will
first notify us and that employer before taking any action with respect to any
such employment or offer of employment. You confirm that prior to entering into
the franchised business you possessed (and still possess) valuable skills
unrelated to the franchised business, have the ability to be gainfully employed
in other fields entirely acceptable to you and that the strict enforcement of
the restrictions of this Agreement will not work any undue or significant
hardship on you or your family.
If any of the restrictions of this Section are determined to be
unenforceable due to excessive duration, geographic scope, business coverage or
otherwise, you and we agree that they will be reduced to the level that provides
the greatest restriction
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but which is still enforceable, notwithstanding any choice-of-law or other
provisions in this Agreement to the contrary. The time period of the competitive
restrictions described in this Agreement will be extended by the length of time
in which you or any other person or entity are in breach of any provision of
this Agreement (including the limitations of this Section.) The provisions of
this Section will continue in full force and effect through the extended time
period. The restrictions of this Section don't apply to the ownership of shares
of a class of securities listed on a stock exchange or traded on the
over-the-counter market that represent less than three percent (3%) of the
number of shares of that class issued and outstanding. If you violate any
obligations under this Agreement (or otherwise) with respect to a Similar
Business, our remedies will include (but are not limited to) the right to obtain
a temporary restraining order, preliminary and/or permanent injunction (or other
equitable relief), notwithstanding any provisions to the contrary.
On our request, you will obtain written non-competition commitments from
the persons subject to the non-competition provisions of this Agreement, in such
form as we direct and naming you and us as beneficiaries of such agreements.
If the restrictions of this Section are unenforceable or are reduced to
a level which we, in our sole and absolute discretion, find unacceptable, we
may, in addition to any other remedies available to us, require you to pay a fee
(either paid immediately on a present value basis or over time, as we select) of
one-half (1/2) of the royalties and marketing contributions which would be
payable if the business in question was a franchised Plantation Store, for three
(3) years, such amount having been jointly selected by you and us as fair and
appropriate damages and in consideration of (1) the difficulty of accurately
predicting actual damages, (2) the fact you will inevitably benefit in the
operation of such business from your training and experience as a Coffee
Plantation Franchisee, (3) the possible impact on the expansion and operation of
our system, including the expense and difficulty of a sale of a franchise in
your area and (4) you not having any rights, nor we having any obligations,
under this Agreement or otherwise during such period.
YOUR INITIALS: __________ / __________
8.12 INSURANCE. You'll maintain in force policies of insurance issued by
carriers approved by us covering various risks, as specified by us, including
(but not limited to) the following: (1) comprehensive general liability
insurance against
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claims for bodily and personal injury, death and property damage caused by, or
occurring in conjunction with, your Plantation Store, under one or more policies
of insurance containing minimum liability coverage prescribed by us from
time-to-time; (2) all risk property and casualty insurance for the replacement
value of your Plantation Store and all associated items (including, but not
limited to, leasehold improvements, furniture, fixtures, equipment, signs,
inventory, supplies, and materials) and (3) business interruption insurance
providing for continued payment of all amounts due (or to become due) us and/or
any affiliate of ours under this Agreement or otherwise.
For your information, our current insurance requirements (which can be
changed by us at any time in our sole and absolute discretion and with such
changes you'll promptly comply) for your Plantation store include the following:
Type of Insurance Limits and Other Details
Property Direct risks of physical loss (special form) including
Earthquake Sprinkler Leakage if the building is
sprinklered. Coverage to include contents, building (if
owned or required by lease) and business income [50%
co-insurance or loss of earnings at 12 months including
Extra Expense]
Commercial General Liability $2,000,000 General Aggregate
$2,000, 000 Products Aggregate
$1,000,000 Each Occurrence
$1,000,000 Personal Injury/Advertising Injury $5,000
Medical Payments
$50,000 Fire Legal
Workers' Compensation Statutory
$1,000,000 Employer's Liability
Automobile $1,000,000 Bodily Injury/Property Damage
$1,000,000 Uninsured Motorist
$5,000 Medical Payments
(Covered Autos: All Owned, Leased, Non- Owned
and Hired Vehicles)
We may periodically specify the types and amounts of coverage required
under such insurance policies and require different and/or additional kinds of
insurance at any time,
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including excess liability insurance. Each insurance policy must name us, our
affiliates and the Franchisor-Related Persons/Entities as additional named
insureds, will contain a waiver of all subrogation rights against us, our
affiliates, the Franchisor-Related Persons/Entities and any successors and
assigns, and will provide for thirty (30) days' prior written notice to us of
any material modifications, cancellation, or expiration of such policies.
Prior to the expiration of the term of each insurance policy, you'll
furnish us with (1) a copy of each renewal or replacement insurance policy to be
maintained by you for the immediately following term and (2) evidence of
pre-payment of the premium. If you fail to maintain required insurance coverage,
or to furnish satisfactory evidence thereof and the payment of the premiums
therefor, we, in addition to our other rights and remedies hereunder, may (but
aren't required to) obtain such insurance coverage on your behalf and you'll
fully cooperate with us in our efforts to obtain the insurance policies,
promptly execute all forms or instruments required, allow any required
visitations of your Plantation Store, and pay to us, on demand, any costs and
premiums incurred by us.
Your obligations to maintain insurance coverage will not be affected by
reason of any separate insurance maintained by us, nor will the maintenance of
such insurance relieve you of any obligations under this Agreement or otherwise.
8.13 FRANCHISEE ADVISORY COUNCIL. We will actively encourage the
formation of a Franchisee Advisory Council to be selected by all Coffee
Plantation(R) Franchisees and we will periodically meet with such Council to
consult with and advise us regarding the operation and development of the Coffee
Plantation(R) System, including such matters as strategic marketing plans,
advertising programs, public relations, research and development, operating
policies and practices, program development, etc. We'll give appropriate
consideration to all input from such Council but retain the ultimate authority
and responsibility for all such decisions.
8.14 PROGRAM PARTICIPATION. We may impose conditions on your
participation in any program, whether with suppliers or otherwise (including,
but not limited to, any program involving payments from third party suppliers),
as we determine in our sole and absolute discretion, including, but not limited
to, our requiring you to be in compliance with such standards and qualifications
as we designate (in our sole and absolute discretion) and/or you (and each
affiliate of yours) being a Plantation Franchisee in good standing and not in
default under this, or any other, agreement with us and/or any affiliate of
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ours.
YOUR INITIALS: __________ / __________
8.15 CONTINUED PAYMENT OF ROYALTIES AND OTHER OBLIGATIONS DURING
CLOSURE, ETC. You and we recognize that closure of your Plantation Store may
become necessary from time-to-time for remodeling, due to fire or other
casualty, governmental action, shopping center or street closure, etc. of
course, if your Plantation Store, the Premises or any significant assets used in
the operation of the franchise are damaged or become inoperable or if your
Plantation Store is closed for any reason, you will promptly undertake all steps
necessary to remedy such conditions and return your Plantation Store to full
operation as soon as possible. If any closure of your unit takes place for any
reason, you will immediately notify us, submit a plan for re-opening (with
discussion of budget, deadlines, possible relocation and subject to our
reasonable approval) and diligently take (at your expense) all steps necessary
to fully re-open your Plantation Store for business as soon as possible. In any
event, all financial obligations of yours to us or any affiliate, whether under
this Agreement or otherwise, will remain in full force and effect during such
closure and any amounts due or to become due us or any affiliate calculated
based on Gross Sales or similar amounts (such as percentage royalties,
percentage Marketing Fund Contributions, percentage rent, etc.) will continue to
be paid during such closure, as specified below. During any closure, weekly
Gross Sales will be assumed to be equal to the average weekly Gross Sales during
the 3 four-week periods (or shorter period if your Plantation Store was not open
for such 3 four-week periods) prior to such closure beginning. Since you will
continue to have this obligation to pay percentage and other amounts based on
average assumed Gross Sales (as well as your obligation to pay minimum amounts)
even though your Plantation Store is closed, you will maintain business
interruption insurance as provided in this Agreement or otherwise specified by
us.
YOUR INITIALS: __________ / __________
9. PROPRIETARY AND CONFIDENTIAL INFORMATION OF OURS
We have, and plan to develop and acquire from time-to-time, certain
confidential and proprietary information and trade secrets, including but not
necessarily limited to, the following categories (the "Confidential
Information"): (1) methods, techniques, specifications, standards, policies,
procedures,
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information, concepts, systems, and knowledge of and experience in the
development, operation and franchising of Plantation Stores; (2) marketing
programs for Plantation Stores; (3) specifications for, and suppliers of,
certain materials, equipment, furniture and fixtures for Plantation Stores; (4)
methods, procedures and techniques for preparing, marketing and presenting the
Products and Services; and (5) information regarding the Products and Services
authorized to be offered from, or used at, Plantation Stores. In any dispute
between you and us involving any question as to whether or not certain
information is, in fact, confidential and/or proprietary to us, or any related
issues, the burden of proof and the burden of going forward will be on you.
We'll disclose, to you, during training, in the Manuals and in guidance
and assistance furnished to you during the term of the Franchise, parts of the
Confidential Information needed for the operation of a Plantation Store, and you
may learn additional Confidential Information of ours during the term of the
Franchise. You will not acquire any interest in the Confidential Information,
other than the right to utilize it in the operation of a franchised Plantation
Store at the Premises and pursuant to this Agreement.
You acknowledge and agree that the Confidential Information is a
valuable asset of ours, includes trade secrets of ours and will be disclosed to
you solely on the condition that you will forever: (1) not use the Confidential
Information in any way other than the operation of your Plantation Store under a
Franchise Agreement in good standing with us; (2) maintain the absolute secrecy
and confidentiality of the Confidential Information during and after the term of
this Agreement; (3) not make unauthorized copies of any portion of the
Confidential Information; and (4) adopt and implement all reasonable procedures
prescribed by us from time-to-time to prevent unauthorized use or disclosure of,
or access to, the Confidential Information. Specifically, you will not sell,
rent or allow anyone to use any list of customers (such list being part of the
Confidential Information and our property) other than in connection with the
mailing of advertising materials approved by us for your Plantation Store. You
agree that any unauthorized use or duplication of any part of the Confidential
Information, including in any other business, would be an unfair method of
competition with us and other Plantation Store Franchisees.
So as to assist in the development of the Coffee Plantation System and
for the mutual benefit of all Plantation operators, we'll have the perpetual
right to use and to authorize our affiliates and/or other Plantation Stores to
use, and you'll fully and promptly disclose to us, all ideas, concepts, methods,
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techniques and otherwise relating to the development, marketing, operation
and/or otherwise of a Plantation Store, or which would be usable therein, which
are conceived or developed by you and/or your employees during the term of this
Agreement, in each case without compensation or other obligation.
You'll cause each of your employees, agents, principals and affiliates
to execute and deliver to you an agreement containing substantially the same
provisions as set forth in this Section, in a form or forms consented to by us.
An original of each executed Confidentiality Agreement will be available for our
inspection during business hours. You will, on our request, deliver to us copies
of any Confidentiality Agreement.
YOUR INITIALS: __________ / __________
10. MARKETING
10.1 MARKETING FUND. Our experience and business judgment is that a
unified marketing program, on both a local and broader level, is an essential
factor in the potential success of all Plantation Stores, to achieve top-of-mind
awareness in potential customers, to build and retain goodwill associated with
the Names and Marks thereby hopefully benefiting all Coffee Plantation
operators, to create improved brand loyalty among new and future customers and
to achieve a favorable retail position for all Plantation Stores. To maximize
the possibility of obtaining these goals, you and we have agreed to a marketing
program as follows:
We've instituted an advertising, publicity and marketing fund (the
"Marketing Fund") for such advertising, advertising-related, marketing and/or
public relations programs, services and/or materials as we, in our sole and
absolute discretion, may deem necessary or appropriate to promote Plantation
Stores. The Marketing Fund may be combined with any marketing fund otherwise
established for Plantation Stores and the funds merged for use in accordance
with this Agreement. You will contribute to the Marketing Fund three percent
(3%) of the Gross Sales of your Plantation Store (we may reduce or waive this
amount on an individual or other basis in our sole and absolute discretion.)
Marketing Fund Contributions will be calculated and paid at the same time, in
the same manner, and for the same periods, as royalty payments. We will cause
each Plantation Store owned by us or any affiliate to make contributions to the
Marketing Fund based on the contribution rate generally in effect at the time
such Plantation Store most recently came under our ownership. You understand
that, due to differing forms of Franchise Agreements or otherwise, some Coffee
Plantation Franchisees may
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have different Marketing Fund and/or other obligations than in this Agreement.
We will have sole and absolute discretion over all matters relating to
the Marketing Fund in any way, including (but not limited to) its management,
all financial matters, expenditures, receipts and/or investments by the
Marketing Fund, timing of expenditures, creative concepts, content, materials
and endorsements for any marketing programs, together with the geographic,
market, and media placement and allocation thereof. The Marketing Fund may be
used, in our sole and absolute discretion, to (among other things) pay costs of
new product development, menu boards and other signage, preparing, producing,
distributing and using marketing, advertising and other materials and programs;
administering national, regional and other marketing programs, purchasing media,
employing advertising, public relations and other agencies and firms; and
supporting public relations, market research and other advertising and marketing
activities, as well as any expenses associated with any Franchisee Advisory
Council(s), if those Councils, and such expenses, are approved by us in our sole
and absolute discretion. A brief statement regarding the availability of
information regarding the purchase of Coffee Plantation franchises may be
included in advertising and other items produced and/or distributed using the
Marketing Fund. Where approved by a majority of any Franchisee Advisory Council,
the Marketing Fund may also be used for research, secret shoppers, store
development testing and other purposes.
We can, in our sole and absolute discretion, arrange for services, goods
and otherwise, including (but not limited to) creative concepts, production,
placement, purchase of media, legal, accounting and other services, to be
provided to the Marketing Fund by us, any of the Franchisor-Related
Persons/Entities and our and/or their employees or agents, including
persons/entities who may be owned, operated, controlled by, and/or affiliated
with, us (such as an "in-house advertising agency") or who may be independent.
We may use the Marketing Fund to compensate and reimburse any of such
persons/entities (including ourselves) as we deem appropriate in our sole and
absolute discretion (including payment of commissions) and to compensate
ourselves and/or others for administrative and other services, materials, etc.
rendered to the Marketing Fund, provided that any compensation to us or any
affiliate will not be unreasonable in amount. While we are not required to
submit any proposed or other expenditures by (or any other matters relating to)
the Marketing Fund for approval by any Franchisee Advisory Council, if
Franchisor does submit any matters for approval and approval is granted by a
majority of such Franchisee Advisory Council, such approval will be final and
binding on you.
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You will participate in all marketing programs instituted by the
Marketing Fund or us but will retain full freedom to set your own prices, except
that we may, to the greatest degree permitted by applicable law, specify maximum
prices above which you will not sell or otherwise provide any goods or services
and you will comply with all such maximum prices. The Marketing Fund will, as
available, furnish you with marketing, advertising and promotional formats and
sample materials and may charge the direct cost of producing them plus shipping
and handling. We may, in our sole and absolute discretion, use the Marketing
Fund to pay the costs of advertising, advertising-related, marketing and/or
public relations programs, services and/or materials with respect to locations,
programs or concepts where Products and/or Services offered under the Name
and/or Marks are to be offered in conjunction with products and/or services
offered under other marks, including (but not limited to) any co-branding, dual
franchising or other programs, and any other franchised or non-franchised
alternative channel of distribution, whether controlled by us or not.
The Marketing Fund will be accounted for separately from our other funds
(but may be commingled with our other funds) and will not be used to defray any
of our general operating expenses, except for such salaries, administrative
costs, overhead and other expenses as we may reasonably incur in activities
related to the Marketing Fund and its programs (including, without limitation,
conducting market research, preparing advertising and marketing materials,
insurance, legal costs and collecting and accounting for the Marketing Fund.) In
any event, we may charge the Marketing Fund for attorney's fees and other costs
related in any way to our defense of any claims against us and/or any of the
Franchisor-Related Persons/Entities regarding the Marketing Fund or with respect
to collecting amounts due and/or expenditures by or from the Marketing Fund. We
may, in our sole and absolute discretion, spend in any fiscal year an amount
greater or less than the aggregate contributions to the Marketing Fund in that
year and the Marketing Fund may borrow from us or other lenders to cover
deficits of the Marketing Fund or cause the Marketing Fund to invest any surplus
for future use by the Marketing Fund. You authorize us to collect for remission
to the Marketing Fund any advertising or promotional monies or credits offered
by any supplier based upon purchases by you or otherwise. In any event, and
notwithstanding any designation by you, any provisions of this Agreement to the
contrary or otherwise, your Marketing Fund contributions may be applied, in our
sole and absolute discretion, to any obligations of you to us or any affiliate,
including (but not limited to) royalties, marketing contributions, purchases,
interest, rent or otherwise. All interest earned on monies contributed to, or
held in, the
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Marketing Fund may be retained in our General Account and/or applied and/or
expended by us as we determine in our sole and absolute discretion and is not
subject to the restrictions of this Agreement. A statement of monies collected
and costs incurred by the Marketing Fund will be prepared annually by us and be
furnished to you upon written request. We may (but are not required to) have
financial statements of the Marketing Fund audited and any costs in connection
therewith will be paid by the Marketing Fund. We will have the right to cause
the Marketing Fund to be incorporated or operated through an entity separate
from us as we deem appropriate in our sole and absolute discretion, and such
successor entity will have all rights and duties of ours relating to the
Marketing Fund.
Franchisor may (but is not required to) remit a portion of Marketing
Fund contributions back to a franchisee on such terms and conditions as
Franchisor determines in Franchisor's sole and absolute discretion, including
(but not limited to) reimbursement of local advertising expenditures made by a
Franchisee and Franchisor may waive and/or compromise claims for contributions
to, and/or claims against or with respect to, the Marketing Fund in Franchisor's
sole and absolute discretion, using the Marketing Fund to pay any such claims.
We will have sole and absolute discretion as to whether or not Franchisor takes
legal or other action against any franchisee who is in default of his or her
obligations with respect to the Marketing Fund (including obligations to make
contributions) or otherwise and whether a franchisee may be allowed to make
direct advertising expenditures in place of contributions to the Marketing Fund.
We have no obligation to ensure that expenditures by the Marketing Fund
in or affecting any geographic area or Plantation Store are or will be
proportionate or equivalent to the contributions to the Marketing Fund by
Plantation Stores operating in that geographic area or that any Plantation Store
will benefit directly or in proportion to its contribution to the Marketing Fund
or from the development of advertising and marketing materials and/or programs,
the placement of advertising or otherwise. We will have no obligation to cause
other Plantation Stores, licensees or outlets (some of which may be under
different arrangements) to contribute to the Marketing Fund, any cooperative or
engage in local marketing. You agree that we (and each of the Franchisor-Related
Persons/Entities) will not have any direct or indirect liability or obligation
to you, the Marketing Fund or otherwise with respect to the management,
maintenance, direction, administration or otherwise of the Marketing Fund. You
agree that neither we (nor any of the Franchisor-Related Persons/Entities) will
be liable for any act or omission, whether with respect to the Marketing Fund or
otherwise which is consistent with this Agreement or other
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information provided to you, or which is done in subjective good faith. You and
we, each having a mutual interest in, and agreeing on the critical practical
business importance of, your and our relationship being governed solely by
written instruments signed by the parties to be bound (and not having either of
us subject to the uncertainty and ambiguity inherent in the application of legal
or other concepts not expressly agreed to in writing by you and us), agree that
your and our rights and obligations with respect to the Marketing Fund and all
related matters are governed solely by the express terms of this Agreement and
that this Agreement (and the parties' relationship and all rights and
obligations with respect to the Marketing Fund) are not in the nature of a
"trust," "fiduciary relationship" or similar special arrangement and is only an
ordinary commercial relationship between independent businesspersons for their
independent economic benefit. We may maintain Marketing Fund assets in one or
more accounts designated as "trust accounts" (or similarly designated), for
purposes of protecting such assets from claims of third-party creditors or
otherwise, but such designation and/or treatment will not operate to create any
"trust," "fiduciary relationship" or similar special arrangement as to the
Marketing Fund, its assets or otherwise.
YOUR INITIALS: __________ / __________
10.2 MARKETING BY YOU. You shall submit for prior approval by us, any
and all advertising and promotional materials prepared by you for your
Plantation Store and you shall not use any disapproved or unapproved advertising
or promotional materials. You shall comply with any advertising requirements
contained in any lease or sublease for the premises of your Plantation Store.
All advertising and promotional materials including any computerized media or
electronic media used by you must be completely factual, comply with all
applicable laws and conform to the highest standards of ethical advertising and
policies prescribed from time to time by us.
You shall list and advertise your Plantation Store in the principal
classified telephone directory distributed within its primary trading area, in
such business classifications as we prescribe from time to time, utilizing our
standard classified telephone directory advertisement at your sole expense. When
more than one Plantation Store serves a metropolitan area, we may require all
such Plantation Stores to be listed in the classified directory advertisement
and you shall pay an equal share of the cost thereof.
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YOUR INITIALS: __________ / __________
11. STORE RECORDS AND REPORTING.
11.1 BOOKKEEPING, ACCOUNTING AND RECORDS, CASH REGISTER, COMPUTER AND
OTHER SYSTEMS. You'll establish and maintain at your own expense a bookkeeping,
accounting, recordkeeping and records retention system conforming to
requirements prescribed by us from time-to-time (including, without limitation,
requirements for timely entering of information into data bases of a computer
program designated by us and periodic printouts of reports generated by such
computer program).
Each transaction related to your Plantation Store will be processed on a
computer system as prescribed by us. You will use (and only use) the cash
register, computer and other systems (including hardware and software) as
designated by us from time-to-time in our sole and absolute discretion. We may,
from time-to-time in our sole and absolute discretion, designate different cash
register, computer and other systems for use in your Plantation Store and may
modify such systems, each of which you'll promptly and fully comply with at your
sole expense.
As directed by us, you will participate in our electronic reporting
system covering sales and other items, with direct interconnection to (and full,
on-line access by) our computer hardware and software systems. You will
continuously use, maintain and update electronic cash register, computer and
other systems (including point-of-sale systems) and software programs which meet
such specifications as we designate, from time-to-time and in our sole and
absolute discretion, and which, in some cases, may include components only
available from us, our affiliates and/or suppliers approved by us. You will
maintain your cash register, computer and all other systems on-line to provide
full access for computer systems used by us and you will promptly update and
otherwise change your electronic cash register, computer hardware and software
systems as we require from time-to-time in our sole and absolute discretion, at
your sole expense. We reserve the right to have full access to such electronic
cash register, computer and other systems and the sales information and data
contained therein and to retrieve, analyze, download, and use the software and
all data contained therein (as well as any other information reported to us) at
any time and as we determine in our sole and absolute discretion. You will
promptly and fully pay all amounts charged by any supplier or licensor (which
may be us and/or an affiliate) of the systems and programs used by you,
including charges for use, maintenance, support and/or update of these systems
or programs.
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We may require you to obtain specified computer hardware and/or
software, including, without limitation, a license to use proprietary software
developed by us or others and you agree to do so. Modification of specifications
for the components of the cash register, computer and other systems may require
you to incur costs to purchase, lease and/or license new or modified computer
hardware and/or software and to obtain service and support for the cash
register, computer and other systems during the term of this Agreement. We
cannot estimate the future costs of the cash register, computer and other
systems (or additions, modifications, maintenance or support) and your related
costs may not be fully amortizable over the remaining term of this Agreement.
You agree to pay all costs in connection with obtaining/maintaining/upgrading,
etc. the computer hardware and software comprising the cash register, computer
and other systems (and additions, modifications, maintenance or support). Within
sixty (60) days after you receive notice from us, you will obtain, install and
thereafter use the components of the cash register, computer and other systems
that we designate from time-to-time. We have the right to charge a reasonable
fee for the license, modification, maintenance or support of proprietary
software that we may license to you and other goods and services that we or any
affiliates furnish to you related to the cash register, computer and other
systems.
YOUR INITIALS: __________ / __________
11.2 REPORTS, FINANCIAL STATEMENTS AND TAX RETURNS. You will provide to
us the such information regarding the operation of your Plantation Store as we
specify from time-to-time and in the manner we designate, which may be either
through computer software that we specify, or faxed or mailed copies of reports
or documents, as designated by us, including through full, direct, on-line
access to your cash register, computer and other systems.
Our current information requirements (which we may expand or otherwise
change from time-to-time in our sole and absolute discretion) are as follows,
including receipt by us by the deadlines specified:
(1) within 24 hours of the end of each fiscal week a report of
Gross Sales by hard copy, electronically or otherwise as we designate;
(2) within seven (7) days after the close of each fiscal
four-week period (or otherwise as we require from time-to-time in our sole and
absolute discretion) forwarding (by hard copy, electronically or otherwise as we
designate) to us of "z" tapes and/or other information from your cash register,
together
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with a statement reconciling reports of Gross Sales and all amounts owed to us,
including (but not limited to) royalties, marketing fund contributions and
percentage rent;
(3) a report, as of the end of each fiscal four-week period (or
otherwise as we require from time-to-time in our sole and absolute discretion),
of Gross Sales, net sales, product costs, labor costs, inventory activity and
copies of the recap for the preceding fiscal four-week period by hard copy,
electronically or otherwise as we designate, together with copies of such other
information and supporting records as we designate. Such reports will be
maintained on the Premises for our inspection at any time but we may require you
to regularly submit such reports, no later than 10 days after the close of each
fiscal four-week period (or otherwise as we require from time-to-time in our
sole and absolute discretion);
(4) within twenty (20) days after the end of each twelve (12) or
sixteen (16) fiscal week period as determined by us, a period profit and loss
statement and a balance sheet for your Plantation Store, prepared, verified and
signed by you;
(5) within forty-five (45) days after the end of each fiscal year
of your Plantation Store, an unaudited fiscal year-end balance sheet, income
statement reflecting all year-end adjustments and statement of changes in
financial position, in each case for your Plantation Store, prepared in
accordance with generally accepted accounting principles consistently applied,
and verified and signed by you;
(6) within sixty (60) days after such returns are filed, exact
copies of your Plantation Store's state sales tax returns and those portions of
your tax returns relating to your Plantation Store; and
(7) on request by us, such other data, information and supporting
records for such periods as we from time-to-time require. Each report and
financial statement submitted by you' to us will be verified as correct and
signed by you personally if a sole proprietorship, by a partner if a
partnership, or by an executive officer if a corporation. We reserve the right
to require you, at your own expense, to have audited financial statements
prepared by a certified public accountant on an annual basis and presented to us
with such account's report.
You'll maintain and to furnish to us, on request, for the term of
this Agreement and any successor franchises, plus 3 years, complete copies of
(a) all records of or relating to your Plantation Store and (b) all income,
sales and other tax returns filed by you reflecting activities of your
Plantation Store, you
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hereby waiving any privileges with regard to any records and/or tax returns.
YOUR INITIALS: __________ / __________
12. NAMES AND MARKS AND TRADE DRESS
12.1 OWNERSHIP OF NAMES AND MARKS AND TRADE DRESS. Your right to use the
Names and Marks and Trade Dress is derived solely from this Agreement and is
limited to the operation of your Plantation Store in compliance with this
Agreement (and the Manuals) at the location and premises authorized hereunder,
and by all applicable standards, specifications and operating procedures
prescribed by us, in our sole and absolute discretion, from time to time during
the term of this Franchise. You agree that all usage of the Names and Marks and
Trade Dress, including usage on computerized or electronic media (including but
not limited to the World Wide Web, the Internet, Telnet, newsgroups, bulletin
boards, FTP, e-mail and the like) by you, and any goodwill established thereby,
belongs to, and shall inure to the exclusive benefit of, us. You further agree
that after the termination or expiration of the Franchise you will not directly
or indirectly at any time or in any manner identify you, any owner or other
business as a Plantation Store, a former Plantation Store or as a franchisee of
or otherwise associated with us, or use in any manner or for any purpose any of
the Names and Marks or Trade Dress, or other indicia of a Plantation Store.
12.2 LIMITATIONS ON YOUR USE OF NAMES AND MARKS AND TRADE DRESS. You
agree to use the Names and Marks and Trade Dress as the sole service mark and
trade name identification of your Plantation Store. You shall display a notice
in such form as we may prescribe that you are an independent owner of your
Plantation Store pursuant to this Agreement. You shall not use any of the Names
and Marks as part of any corporate name or with any prefix, suffix or other
modifying words, terms, designs or symbols (other than logos licensed to you
hereunder), or in any modified form, nor may you use any Names and Marks and
Trade Dress in connection with the sale of any unauthorized product or service
or in any other manner including via computerized media and electronic media not
explicitly authorized in writing by us. All bank accounts, licenses, permits or
other similar documents shall contain the actual name of the person or entity
owning your Plantation Store and may contain "d/b/a Coffee Plantation." You
shall obtain any fictitious name, assumed name or "doing business" registration
as may be required by law.
12.3 NOTIFICATION OF INFRINGEMENTS AND CLAIMS. You shall immediately
notify us of any apparent infringement of or
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challenge to your use of any of the Names and Marks and/or Trade Dress or claim
by any person of any rights in any of the Names and Marks and/or Trade Dress and
you shall not communicate with any person other than us and our respective
counsel in connection with any such infringement, challenge or claim. We shall
have sole and absolute discretion to take such action as we and they deem
appropriate and the right to exclusively control any litigation or Patent and
Trademark Office or other administrative proceeding arising out of any such
infringement, challenge or claim or otherwise relating to any Names and Marks
and/or Trade Dress. You agree to execute any and all instruments and documents,
render such assistance, and do such acts and things as may, in the opinion of us
or our counsel be necessary or advisable to protect and maintain our interests
in any litigation or Patent and Trademark office or other proceeding or to
otherwise protect and maintain our interests in any of the Names and Marks and
Trade Dress.
12.4 DISCONTINUANCE OF USE OF NAMES AND MARKS AND TRADE DRESS. If it
becomes advisable at any time, in our sole and absolute discretion, for you to
modify or discontinue the use of any of the Names and Marks and/or Trade Dress
or use one or more additional or substitute name(s), trademarks, service marks
or trade dress, you will promptly comply (at your sole expense) with our
directions to modify or otherwise discontinue the use of such Names and Marks
and/or Trade Dress, or use one or more additional or substitute names,
trademarks, service marks and/or trade dress, including (but not limited to)
replacement of all signage, etc. Neither we nor any of the Franchisor-Related
Persons/Entities will have any liability or obligation (whether of defense,
indemnity, expense reimbursement or otherwise) to you, and you agree to make no
claim, for, or in connection with, any modification, discontinuance or
otherwise, and/or any dispute regarding the Names and Marks and/or Trade Dress
and/or your and/or our rights in or to them. We make no guaranty that a
modification, discontinuance or otherwise may not be required, whether as a
result of expiration, termination or limitation of our rights to the Names and
Marks and/or Trade Dress or otherwise.
You understand that there is always a possibility that there might be
one or more businesses, similar to the business covered by the Franchise,
operating in or near the area(s) where you may do business or otherwise, using a
name, marks and/or trade dress similar to ours and with superior rights to such
name and/or marks as a result of prior use or otherwise. We strongly urge you to
research this possibility, using telephone directories, local filings and other
means, prior to your signing this Agreement, any other documents, expending or
paying any sums or making any commitments and you understand that if you fail to
do
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so, you are at risk.
YOUR INITIALS: __________ / __________
13. INITIAL FRANCHISE FEE
13.1 INITIAL FRANCHISE FEE, NON-REFUNDABLE. Your initial franchisee fee,
which will be paid to us on signing this Agreement, is Twenty Five Thousand
Dollars ($25,000.) The initial franchise fee is fully earned by us on signing of
this Agreement and is entirely nonrefundable (as are all amounts paid to us
and/or any affiliate) except for possible partial or other refund (in each case
at our sole option) as expressly provided in other Sections of this Agreement.
You understand that the initial franchise fee may not be same for all
franchisees and may take into account factors such as size of territory,
previous business relationship with us or otherwise.
YOUR INITIALS: __________ / __________
13.2 RELEASES. The execution of this Agreement will constitute, and you
(and each affiliate of yours, together with each owner of you, if you are a
business entity, and/or any affiliate of yours) will, as a condition to the
granting of this and/or any future or other Franchise, execute, in a form
prescribed by us, a general release, of any and all claims, liabilities and/or
obligations, of any nature whatsoever, however arising, known or unknown,
against us and/or any or all of the Franchisor-Related Persons/Entities,
excepting only (where so required by applicable law) those claims solely related
to the offer and sale of the new Franchise, you agreeing that it would be
inappropriate from a business standpoint to enter into further franchise
relationships with us while there might be a possibility of claims based on a
prior relationship. For example, if you own Franchises Nos. 1 and 2 and are
being awarded Franchise No. 3, the release by you would cover all matters other
than (where so required by applicable law) those solely related to the offer and
sale of Franchise No. 3. We can make no assurance as to whether additional or
future franchises may be granted to you or the prices, terms or conditions
relating thereto. If we should, through inadvertence or otherwise, fail to
require such separate release at any time, the execution of this Agreement, and
each Franchise Agreement after this one, will be regarded as the equivalent of
the granting of such releases. A copy of the release language currently required
by us (which we may modify in the future, in our sole and absolute discretion)
is attached as Exhibit 13.2
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YOUR INITIALS: __________ / __________
13.3 UPDATING OF AGREEMENTS. In addition, and in the interests of
consistency, efficiency of administration, improved ability to meet competitive
challenges and ongoing improvement of the Coffee Plantation(R) System (among
other things), on award of this or any other and/or subsequent Coffee Plantation
or other franchise to you (and/or any affiliate) by us (and/or any affiliate),
and/or as a condition to any transfer (as defined below) or relocation by you
(and/or any affiliate) and/or the award of any successor franchise to you
(and/or any affiliate), we may require that any or all existing franchise
agreement(s) with you (and/or any affiliate) be cancelled and the then-current
form of Coffee Plantation(R) Franchise Agreement(s) be executed (using the
then-current royalties, marketing fund contributions and other provisions) with
respect to each Plantation Store owned and/or operated by you (and/or any
affiliate), with appropriate modifications to reflect the facts that, for such
pre-existing units only: (a) no initial franchise fee will be charged and (b)
the expiration date of the initial term, and the duration of any successor
franchise, will not be changed with respect to such pre-existing units as a
result of your signing such new agreement(s). (For example, if your Franchise
Agreement for a pre-existing unit had an expiration date of January 1, 2005,
with a successor franchise expiring January 1, 2015, the expiration date of the
new Franchise Agreement for that pre-existing unit would be January 1, 2005,
with a successor franchise expiring January 1, 2015.)
YOUR INITIALS: __________ / __________
14. ROYALTY
14.1 ROYALTY - PERCENTAGE. Every fiscal week (or otherwise as we require
from time-to-time in our sole and absolute discretion), you'll pay us six
percent (6%) of the Gross Sales received or earned during the preceding fiscal
week or other period (weeks currently run from Sunday through Saturday, but we
can change this in our sole and absolute discretion.)
Royalties are to be received by us electronically or otherwise on the
5th day after each week for the preceding week (or otherwise as we require from
time-to-time in our sole and absolute discretion), subject to prior payment by
means of electronic funds transfer or otherwise as provided in this Agreement.
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YOUR INITIALS: __________ / __________
14.2 DEFINITION OF "GROSS SALES". As used in this Agreement, the term
"Gross Sales" shall mean and include all revenues, whether cash or credit and
whether or not such sales are made at or from the premises of your Plantation
Store or any other location, including, if approved by us via computerized or
electronic media, (but excluding sales tax collected and paid when due to the
appropriate taxing authority and actual customer refunds, adjustments and
credits) which are, or could be, received or earned (1) by or with respect to
your Plantation Store, (and/or at or from the Premises) (2) by you (or on/for
your behalf or benefit) and which relate to the type of products, services or
any other items which are or could be provided, sold, rented or otherwise
distributed at, through or in association with a Plantation Store and/or (3) by
you (or on your behalf or for your benefit) with respect to products and
services which are, or could be, provided, sold, or otherwise distributed in
association with any use of the Names and Marks, the Trade Dress, the Plantation
System, or any related techniques, systems, procedures, or know-how or the
operation of any Similar Business. All transactions will be recorded at full
list retail selling price and without discount. You'll not divert any business
or take any other actions (or fail to take any actions) which would have the
effect of reducing the Gross Sales with respect to which royalties are payable
and you will use your best efforts to maximize Gross Sales. All sales and/or
billings, whether collected or not, will be included in Gross Sales, with no
deduction for credit card or other charges.
YOUR INITIALS: __________ / __________
14.3 PAYMENT OF ROYALTY AND MARKETING FUND CONTRIBUTION, ELECTRONIC
FUNDS TRANSFER. You must participate in our then-current electronic funds
transfer program authorizing us to utilize a pre-authorized bank draft system on
a weekly basis (or otherwise as we specify from time-to-time in our sole and
absolute discretion.) All royalties, Marketing Fund Contributions and other
amounts due us (or any affiliate) for each period must be received by us (and
such affiliate) or credited to our (or our affiliate's) account by
pre-authorized bank debit before 5:00 p.m. on the 5th day after each week or
other point in time specified by us. We may, from time-to-time, specify periodic
amounts for regular electronic or other transfer to our (or our affiliate's)
account, based on past reports of sales by you and reasonable expectations of
royalties, Marketing Contributions and other amounts to become due from you. You
will
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participate in our then-current electronic reporting and collection system
covering sales and other items.
YOUR INITIALS: __________ / __________
14.4 INTEREST AND LATE FEES ON LATE PAYMENTS AND/OR REPORTS. All amounts
you may owe us and/or our affiliates will bear interest at the highest
applicable legal rate for open account business credit, but not to exceed one
and one-half percent (1.5%) per month. You'll pay a late fee of Three Hundred
Dollars ($300.00), plus $50.00 per day, for each report and/or each payment
received by us after its due date. You agree to pay a dishonored check fee of
Two Hundred Dollars ($200.00), for each di