Franchise Agreement Side Letter

FRANCHISE AGREEMENT SIDE LETTER

This Side Letter is made as of Date: by and between Franchisor Name: , a Entity Type: Corporation LLC Other (collectively "Franchisor"), and Franchisee Name: , a Corporation LLC Other (collectively "Franchisee").

RECITALS

WHEREAS, Franchisor and Franchisee entered into that certain Franchise Agreement dated Agreement Date: (the "Agreement"), pursuant to which Franchisee was granted the right to operate one or more franchised units under Franchisor's system; and

WHEREAS, the parties desire to document certain temporary or project-specific modifications to the Agreement, including adjustments to financial terms and operational milestones, which modifications are intended to be binding and enforceable between the parties; and

WHEREAS, except as expressly modified by this Side Letter, the Agreement remains in full force and effect and the parties intend that this Side Letter operate as a limited amendment and clarification of certain provisions of the Agreement.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:

1. DEFINITIONS

1.1 Capitalized terms used but not defined in this Side Letter have the meanings set forth in the Agreement. For purposes of this Side Letter, the term "Effective Date" means the date set forth above in the opening paragraph.

2. PURPOSE AND EFFECT OF SIDE LETTER

2.1 Purpose. The purpose of this Side Letter is to set forth limited amendments and clarifications to selected provisions of the Agreement as described in Section 3 below. This Side Letter is intended to be supplemental to, and construed together with, the Agreement.

2.2 Priority. In the event of any conflict between the terms of this Side Letter and the Agreement, the terms of this Side Letter shall prevail solely to the extent of such conflict and solely with respect to the subject matter expressly addressed herein.

3. SPECIFIC MODIFICATIONS

3.1 Term Extension. Notwithstanding any provision of the Agreement to the contrary, the Initial Term for the unit(s) identified in Exhibit A to the Agreement is hereby extended by year(s) such that the new expiration date for those unit(s) shall be .

3.2 Temporary Royalty Adjustment. For a period commencing on and ending on (the "Adjustment Period"), Franchisee's royalty rate shall be reduced to of Gross Receipts. At the conclusion of the Adjustment Period, the royalty rate specified in the Agreement shall resume unless otherwise agreed in writing.

3.3 Initial Marketing Fund Contribution. Franchisee shall make a one-time contribution to the Franchisor's marketing fund in the amount of $ payable within days after the Effective Date.

3.4 Territorial Clarification. The parties agree that the territory description set forth in the Agreement for Franchisee's unit(s) is clarified as follows and shall be deemed incorporated into the Agreement for all purposes:

3.5 Training and Opening Milestones. Franchisor agrees to provide the training and support specified in Section 5 of the Agreement and to use reasonable efforts to achieve the following milestone dates: Initial Training Completion Date: ; Store Opening Date: . Failure by Franchisor to meet these milestone dates shall not constitute a material breach unless such failure is not cured within days following written notice.

4. CONFIDENTIALITY

4.1 Confidential Information. The parties acknowledge that the terms and existence of this Side Letter are Confidential Information under the Agreement. Each party shall treat such information with the same degree of care as it accords to its own confidential information and shall not disclose the same except as expressly permitted by the Agreement or required by law.

4.2 Permitted Disclosures. Notwithstanding the foregoing, disclosures to affiliates, counsel, accountants, lenders or investors are permitted provided that the recipient is informed of the confidential nature of the information and is bound by confidentiality obligations no less protective than those in the Agreement.

5. REPRESENTATIONS AND COVENANTS

5.1 Authority. Each party represents and warrants that it has full corporate or organizational power and authority to execute and deliver this Side Letter and to perform its obligations hereunder, and that the person signing on its behalf is fully authorized to bind that party.

5.2 Performance. Each party covenants to perform its obligations under this Side Letter in good faith and in a commercially reasonable manner, and to comply with all applicable laws and regulations in carrying out such obligations.

6. NO WAIVER; NO OTHER AMENDMENTS

6.1 No Waiver. Except as expressly provided in this Side Letter, no action or inaction by either party shall constitute a waiver of any right or remedy available under the Agreement or applicable law. No waiver shall be effective unless in a writing signed by the waiving party.

6.2 No Other Amendments. Except as expressly set forth herein, nothing in this Side Letter amends, modifies or supersedes any other term of the Agreement. All other terms and conditions of the Agreement shall remain in full force and effect.

7. NOTICES

Notices to Franchisor

Notices to Franchisee

8. COUNTERPARTS; ELECTRONIC SIGNATURES

This Side Letter may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Signatures provided by electronic means, including facsimile or electronic image, shall be binding and have the same force and effect as original signatures.

9. GOVERNING LAW

This Side Letter shall be governed by and construed in accordance with the laws of the State of , without regard to principles of conflicts of law.

10. ENTIRE AGREEMENT

This Side Letter, together with the Agreement and any documents expressly incorporated therein, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, whether written or oral, relating to such subject matter.

11. SEVERABILITY

If any provision of this Side Letter is held to be invalid, illegal or unenforceable by a court of competent jurisdiction, the remaining provisions shall remain in full force and effect and shall be construed so as to effectuate the parties' intent to the fullest extent permitted by law.

12. MISCELLANEOUS

12.1 Amendment. No amendment, modification or waiver of any provision of this Side Letter shall be effective unless in writing and signed by both parties.

12.2 Construction. The headings in this Side Letter are inserted for convenience only and shall not affect the interpretation of this Side Letter. The parties acknowledge that each has had the opportunity to be represented by counsel in negotiating this Side Letter.

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