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Form 2.02[2]—Area Development Agreement
AREA DEVELOPMENT AGREEMENTDated:
TABLE OF CONTENTS
I. GRANT OF AREA DEVELOPMENT FRANCHISE 2022-4
1.1 Grant of Area Development Franchise 2022-4
II. AREA FRANCHISEE'S DEVELOPMENT OBLIGATION 2022-4
2.1 Minimum Development Obligation 2022-4
2.2 Force Majeure 2022-5
2.3 Area Franchisee May Exceed Minimum Development Obligation 2022-5
III. DEVELOPMENT AREA 2022-5
3.1 Description of Development Area 2022-5
IV. TERM OF AREA DEVELOPMENT AGREEMENT 2022-5
4.1 Term 2022-5
4.2 Renewal 2022-5
4.3 Limited Additional Development Right 2022-5
4.4 Exercise of Right of Additional Development 2022-6
4.5 Conditions to Exercise of Right of Additional Development 2022-6
V. PAYMENTS BY AREA FRANCHISEE 2022-6
5.1 Development Area Fee 2022-6
VI. EXECUTION OF INDIVIDUAL FRANCHISE AGREEMENTS 2022-7
6.1 Site Approval, Submission of Offering Circular, Execution of Franchise Agreement 2022-7
6.2 Condition Precedent to Company's Obligations 2022-7
VII. ASSIGNABILITY AND SUBFRANCHISING 2022-7
7.1 Assignability by Company 2022-7
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7.2 No Subfranchising by Area Franchisee 2022-8
7.3 Assignment by Area Franchisee 2022-8
7.4 Right of First Refusal 2022-9
7.5 Individual Franchise Agreements 2022-10
VIII. NON-COMPETITION 2022-10
8.1 In Term 2022-10
8.2 Post-Term 2022-10
8.3 Modification 2022-10
IX. TERMINATION 2022-11
9.1 Termination Pursuant to A Material Breach of This Agreement 2022-11
9.2 Termination by Reason of a Material Breach of Other Agreement 2022-11
9.3 Effect of Termination 2022-11
X. CORPORATE OR PARTNERSHIP AREA FRANCHISEE 2022-11
10.1 Corporate or Partnership Area Franchisee 2022-11
XI. ARBITRATION 2022-12
11.1 General 2022-12
XII. GENERAL CONDITIONS AND PROVISIONS 2022-13
12.1 Relationship of Area Franchisee to Company 2022-13
12.2 Indemnity by Area Franchisee 2022-13
12.3 No Consequential Damages For Legal Incapacity 2022-13
12.4 Waiver and Delay 2022-13
12.5 Survival of Covenants 2022-14
12.6 Successors and Assigns 2022-14
12.7 Joint and Several Liability 2022-14
12.8 Governing Law 2022-14
12.9 Entire Agreement 2022-14
12.10 Titles for Convenience 2022-14
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12.11 Gender 2022-14
12.12 Severability 2022-15
12.13 Counterparts 2022-15
12.14 Fees and Expenses 2022-15
12.15 Notices 2022-15
XIII. SUBMISSION OF AGREEMENT 2022-16
13.1 General 2022-16
XIV. ACKNOWLEDGMENT 2022-17
14.1 General 2022-17
EXHIBITS
Exhibit A—Development Area 2022-18
Exhibit B—Minimum Development Obligations 2022-19
Exhibit C—Spousal Consent 2022-20
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ABC, INC.
AREA DEVELOPMENT AGREEMENT
THIS AREA DEVELOPMENT AGREEMENT ( the “Agreement”). is made and entered into this day of , 20 , (the “Effective Date”) by and between ABC, Inc.
(“Company”) and , (“Area Franchisee”), with reference to the following facts:
A. Company is the owner and operator of certain proprietary and other property rights and inte rests in
and to the “ABC” name and such other trademarks, trade names, service marks, logotype s, insignias,
trade dress and designs used in connection with the development, operation and maintenanc e of
restaurants featuring and such other menu items as Company may authorize from time to time
(the “Franchised Business”).
B. Company desires to expand and develop the Franchised Business, and seeks sophisticated a nd
efficient multi-unit franchisees who will develop numerous restaurants for the Franchised Business within
designated areas.
C. Area Franchisee desires to build and operate “ABC” restaurants (the “Restaurants”), a nd Company
desires to grant to Area Franchisee the right to build and operate said Restaurants in accordance with the
terms and upon the conditions contained in this Agreement.
WHEREFORE IT IS AGREEDI
GRANT OF AREA DEVELOPMENT FRANCHISE
1.1 Grant of Area Development Franchise Company hereby grants to Area Franchisee, and Area Franchisee hereby accepts, the exclusive right,
during the term hereof, to develop Restaurants in the Development Area more fully describe d in Exhibit
“A” which is annexed hereto and by this reference made a part hereof (the “Development Area”), upon
the terms and subject to the conditions of this Agreement.
II
AREA FRANCHISEE'S DEVELOPMENT OBLIGATION
2.1 Minimum Development Obligation Area Franchisee hereby agrees to construct, equip, open and thereafter continue to operate wi thin the
Development Area not less than the cumulative number of Restaurants set forth in Exhibit “B,” which is
annexed hereto and by this reference made a part hereof, within each of the time periods (the
“Development Periods”) specified therein, (hereafter the “Minimum Development Obligation”).
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2.2 Force Majeure
Should Area Franchisee be unable to meet the Minimum Development Obligation solely as the result
of Force Majeure, including, but not limited to strikes, material shortages, fires, fl oods, earthquakes, and
other acts of God, or by force of law (including, but not limited to any legal disabili ty of Company to
deliver an Offering Circular pursuant to Section 6.1 of this Agreement), which result in the inability of
Area Franchisee to construct or operate Restaurant(s) in the Territory, and which Area Franchi see could
not by the exercise of due diligence have avoided, the Development Periods shall be exte nded by the
amount of time during which such Force Majeure shall exist.
2.3 Area Franchisee May Exceed Minimum Development Obligation
During the Term, Area Franchisee may, subject to the terms and conditions of this Agreeme nt and the
Franchise Agreements, construct, equip, open and operate more Restaurants in the Development Area
than required in the Minimum Development Obligation.
III
DEVELOPMENT AREA
3.1 Description of Development Area During the term of this Agreement, Company shall not operate or grant a franchise to any ot her
person to operate a Franchised Business within the Development Area.
IV
TERM OF AREA DEVELOPMENT AGREEMENT
4.1 Term The term of this Agreement (the “Term”) shall commence on the Effective Date and, unless sooner
terminated in accordance with the provisions herein, or extended as provided in Section 2.2, sha ll
continue for a period of years.
4.2 Renewal
Area Franchisee shall have no right to renew this Agreement.
4.3 Limited Additional Development Right Within 60 days prior to the expiration of the Term, if Company shall determine that further
development of the Development Area is desirable, Company shall notify Area Franchisee i n writing of
Company's determination to develop additional Restaurants in the Development Area and a plan for such
development over a five year term. Subject to the conditions set forth in section 4.5 of this Agreement,
Area Franchisee shall have a prior right to undertake the additional development which Company shall
have set forth in its notice to Area Franchisee. This right of additional development by Area Franchisee
shall be exercised only in accordance with Section 4.4 and is subject to the conditions set forth in Section
4.5. If such right of additional development is not exercised by Area Franchisee, Company or any
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Franchisee franchised by Company may construct, equip, open and operate additional Restaura nts in the
Development Area.
4.4 Exercise of Right of Additional Development
At the time Company delivers to Area Franchisee Company's written notice of its dete rmination to
undertake additional development in the Development Area, Company shall also delive r to Area
Franchisee a copy of Company's then-current Uniform Franchise Offering Circular or its equivalent as
may be required by applicable law (the “Offering Circular”) and two copies of the then-c urrent area
development agreement. (“Then-current,” as used in this Agreement and applied to the Offeri ng Circular
and
Area Development Agreement shall mean the form then currently provided to prospective franchi sees
or area franchisees, or if not then being so provided, then such form selected by the Company in its sole
discretion which previously has been delivered to and executed by a franchisee of Company). T he new
area development agreement, which may vary substantially from this Agreement, will refl ect Area
Franchisee's new development obligation consistent with Company's plan for additional developm ent set
forth in its notice to Area Franchisee. Within thirty (30) days after Area Franchisee's receipt of the
Offering Circular and the new area development agreement, but no sooner than immediate ly after any
applicable waiting periods prescribed by law (“Disclosure Period”) have passed, Area Franchisee shall
execute two copies of the Area Development Agreement described in the Offering Circula r and return
them to Company. If Area Franchisee has so executed and returned the copies and has satisfied the
conditions set forth in Section 4.5, Company will execute the copies and return one full y executed copy to
Area Franchisee.
4.5 Conditions to Exercise of Right of Additional Development
Area Franchisee's right to additional development described in Section 4.3 shall be subje ct to Area
Franchisee's fulfillment of the following conditions precedent:
(a) Area Franchisee shall have fully performed all of its obligations under this Agreement a nd all
other agreements between Company and Area Franchisee.
(b) Area Franchisee shall have demonstrated to Company, Franchisee's financial capacity t o perform
the additional development obligations set forth in the new area development agree ment. In determining
if Area Franchisee is financially capable, Company will apply the same criteria to Area Franchisee as it
applies to prospective area franchisees at that time.
(c) At expiration of the Term, Area Franchisee shall continue to operate, in the Devel opment Area,
not less than the aggregate number of Restaurants required by the Minimum Development Obliga tion set
forth in Exhibit “B”.
V
PAYMENTS BY AREA FRANCHISEE
5.1 Development Area Fee. Area Franchisee shall pay to Company in cash or by certified check concurrently with the execution
of this Agreement the sum of ten thousand dollars ($10,000.00) multiplied by the number of Restaurants
required to be opened during the Term pursuant to the Minimum Development Obligation (the
“Development Area Fee”). The Development Area Fee shall be non-refundable, but shall be c redited
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against Area Franchisee's Initial Franchise Fee, as described in each Franchise Agreem ent, at the rate of
ten thousand dollars ($10,000.00) for each Restaurant opened pursuant to this Agreement, the aggregate
amount of such credits not to exceed the Development Area Fee.
VI
EXECUTION OF INDIVIDUAL FRANCHISE AGREEMENTS
6.1 Site Approval, Submission of Offering Circular, Execution of Franchise Agreement After Area Franchisee has located a site for construction of a Restaurant, Area Franc hisee shall
submit to Company such information regarding the proposed site as Company shall require, in the form
which Company shall from time to time require, together with the terms of any propose d lease relating to
such site. Company may seek such additional information as it deems necessary wi thin 30 days of
submission of the prospective site, and Area Franchise shall respond promptly to such request for
additional information. If Company shall not reject the site in writing within 30 days, or within 30 days
after a receipt of such additional information, whichever is later, the site shal l be deemed approved.
Company shall not unreasonably reject a proposed site. Promptly after approval of any site, Company
shall transmit to Area Franchisee an Offering Circular and two execution copies of the then current
Franchise Agreement pertaining to the approved site and providing for an exclusive territory surrounding
said Restaurant, determined by Company in good faith, in accordance with Company's then c urrent
policies and standards for exclusive territories for similarly situated franchisee Rest aurants. Immediately
upon receipt of the Offering Circular, Area Franchisee shall return to Company a signed copy of the
Acknowledgment of Receipt of the Offering Circular. After the passage of any applicable Di sclosure
Period, Area Franchisee shall execute and deliver to Company two copies of said Franchise Agreement
and the Initial Fee required pursuant to the Franchise Agreement, less the credit, if any, applicable
pursuant to Section 5.1. Company shall, promptly upon receipt of said documents and Fee, execut e and
return to Area Franchisee one copy of the Franchise Agreement. Area Franchisee shall then proc ure the
site by purchase or lease, and return one copy of the executed lease or, if purchased, the dee d evidencing
Area Franchisee's right to occupy the approved site. Area Franchisee shall then commence construction
and operation of the Restaurant pursuant to the terms of the Franchise Agreement. Notwithstandi ng the
foregoing, if Company is not legally able to deliver an Offering Circular to Area Fra nchisee by reason of
any lapse or expiration of its franchise registration, or because Company is in the process of amending
any such registration, or for any reason beyond Company's reasonable control, Company may delay
approval of the site for Area Franchisee's proposed Restaurant until such time as Company i s legally able
to deliver an Offering Circular.
6.2 Condition Precedent to Company's Obligations
It shall be a condition precedent to Company's obligations pursuant to Section 6.1, that Area
Franchisee shall have performed all of his obligations under and pursuant to all agreements between Area
Franchisee and Company.
VII
ASSIGNABILITY AND SUBFRANCHISING
7.1 Assignability by Company Company shall have the right to assign this Agreement, or any of its rights and privileges hereunder
to any other person, firm or corporation without Area Franchisee's prior consent; provided that, in respect
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to any assignment resulting in the subsequent performance by the assignee of the functions of Compa ny,
the assignee shall expressly assume and agree to perform such obligations.
7.2 No Subfranchising by Area Franchisee
Area Franchisee shall not offer, sell, or negotiate the sale of “ABC” franchises to any third party,
either in Area Franchisee's own name or in the name and on behalf of Company, or otherwise
subfranchise, share, divide or partition this Agreement, and nothing in this Agreement will be construed
as granting Area Franchisee the right to do so.
7.3 Assignment by Area Franchisee
(a) This Agreement has been entered into by Company in reliance upon and in consideration of the
singular personal skill, qualifications and trust and confidence reposed in Area Franchisee or, in the case
of a corporate or partnership franchisee, the principal officers or partners thereof who will act ively and
substantially participate in the ownership and operation of the Franchised Business. Therefore, ne ither
Area Franchisee's interest in this Agreement nor any of its rights or privileges shall be a ssigned or
transferred, voluntarily or involuntarily, in whole or in part, by operation of law or otherwise, in any
manner, without the prior written consent of Company and subject to Company's right of first refusa l as
provided for in Section 7.4 of this Agreement. Notwithstanding anything herein to the contrary, in the
event of the death or legal incapacity of Area Franchisee or, if Area Franchisee is a corporation, a
stockholder owning twenty percent (20%) or more of the Area Franchisee's capital stock or voting powe r,
or if Area Franchisee is a general or limited partnership, a general or limited part ner owning a twenty
percent (20%) or greater interest in the voting power, property, profits or losses of the partnership, the
transfer of Area Franchisee's interest in this Agreement or such stockholder's or partner's stock or
partnership interest, to his heirs, personal representatives or conservators, as applicable, shal l require
Company's written consent, but shall not give rise to Company's right of first refusal hereunder, al though
such right shall apply as to any proposed transfer or assignment by such heirs, personal representati ves or
conservators.
(b) Should Company not elect to exercise its said right of first refusal, or should such ri ght of first
refusal be inapplicable, as herein provided, Company's consent to such assignment, but not to the
partition, sharing or dividing of rights under this Agreement, shall not be unreasonably withheld;
provided, however, that the Company may impose any reasonable condition(s) to the granting of its
consent. Without limiting the generality of the foregoing, the imposition of any or all of the following
conditions to its consent to any such assignment shall be deemed to be reasonable:
(i) that the assignee (or the principal officers, shareholders, directors or general partners of the
assignee in the case of a corporate or partnership assignee) demonstrate that they have t he skills,
qualifications and economic resources necessary, in Company's judgment, reasonably exercised, to own
and operate the Restaurants contemplated by this Agreement, and by all other agre ements between the
Company and such assignee, and all agreements proposed to be assigned to such assignee;
(ii) that the assignee expressly assumes in writing for the benefit of Company all rights a nd
obligations of Area Franchisee under this Agreement and all franchise agreements execute d pursuant
hereto;
(iii) that the assignee shall have completed the Company's training program to Compa ny's
satisfaction, exercised in good faith;
(iv) that as of the date of any such assignment, the assignor shall have fully complie d with all of its
obligations to Company, whether under this Agreement or any other agreement, arrangement or
understanding with Company;
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(v) that assignee, if then a Franchisee of Company, is not then in default of any of his obli gations
to Company.
(vi) that the assignee shall pay to Company a transfer fee equal to $5,000 which is rea sonably
required to cover Company's expenses relating to said assignment, and a training fee of $5,000; provided
however that Company shall waive such training fee if the assignment is to an existing franchisee.
(c) If Area Franchisee is a corporation, or a limited or general partnership, each of the fol lowing shall
be deemed to be an assignment of this Agreement within the meaning of this Secti on, the death or legal
incapacity of any shareholder owning twenty percent (20%) or more of the capital stock or voti ng power
of Area Franchisee; (ii) if Area Franchisee is a general or limited partnership, the withdrawal, death or
legal incapacity of a general partner, or a limited partner owning twenty percent (20%) or more of the
voting power, property, profits or losses, of the partnership, or the admission of any additional general
partner or transfer by any general partner of its interest in the property, management or profits and/or
losses of the partnership; (iii) the issuance of any securities by Area Franchisee which i tself or in
combination with any other transaction(s) results in the shareholders or partners existing as of the
Effective Date, as applicable, owning less than eighty percent (80%) of the outstanding sha res or voting
power of a corporate Area Franchise, or of the voting power or interests in the property, profits or l osses
of a limited partnership; (iv) the transfer of twenty percent (20%) or more in the aggregat e of the capital
stock or voting power of Area Franchisee, by operation of law or otherwise; and (v) any merger, stock
redemption, consolidation, reorganization or recapitalization involving Area Franchisee.
(d) Area Franchisee shall not in any event have the right to pledge, encumber, hypothecate or
otherwise give any third party a security interest in this Agreement in any manner whatsoever without the
express prior written permission of Company, which permission may be withheld for any reason
whatsoever in Company's sole subjective judgment.
7.4 Right of First Refusal
Except as expressly provided in Section 7.3 to the contrary, any assignment of this Agreement , or any
interest herein, shall be subject to Company's right of first refusal with respect thereto. Company's said
right of first refusal shall be exercised in the following manner:
(a) Area Franchisee shall deliver to Company a written notice clearly and unambiguousl y setting forth
all of the terms and conditions of the proposed assignment and all available informat ion concerning the
proposed assignee, including but not limited to, information concerning the employment history, fi nancial
condition, credit history, skill and qualifications of the proposed assignee and, in the case of a partnership
or corporate assignee, of its partners and shareholders as applicable.
(b) Within thirty (30) days after Company's receipt of such notice (or if Company shall request
additional information, within thirty (30) days after receipt of such additional informati on), Company
may either consent or withhold its consent to such assignment, in accordance with Secti on 7.3, or, at its
option, accept the assignment to itself or to its nominee upon the terms and conditi ons specified in the
notice. Company may substitute an equivalent sum of cash for any consideration other than ca sh specified
in said notice.
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(c) If Company shall elect not to exercise its said right of first refusal and shall consent to such
assignment, Area Franchisee shall, subject to the provisions of Section 7.3, be free to assign t his
Agreement to such proposed assignee on the terms and conditions specified in said notice. If, however,
Company does not elect to exercise its right of first refusal and said terms shall be materially changed, or
if more than 90 days shall pass without such assignment occurring, such changed terms or lapse of time
shall be deemed a new proposal and Company shall again have such right of first refusal wi th respect
thereto.
7.5 Individual Franchise Agreements
Area Franchisee shall not execute any Franchise Agreement, or construct or equip any Resta urant
with a view to transfer or assign such Franchise Agreement or Restaurant.
VIII
NON-COMPETITION
8.1 In Term During the term of this Agreement, neither Area Franchisee, nor any officer, director shareholde r, or
general partner or limited partner of a corporate or partnership franchisee, shall either di rectly or
indirectly, own, operate, advise, be employed by, or have any interest in any restaurant that features
or other food products featured by “ABC” Restaurants whether within or outside the
Development Area unless Company shall consent thereto in writing.
8.2 Post-Term.
During a one (1) year period after the expiration or termination hereof, for any reason, neither Area
Franchisee, nor any officer, director, shareholder or general partner or limited partner of a corporate or
partnership franchisee, shall, either directly or indirectly, own, operate, advise, be empl oyed by, or have
any interest in any restaurant that features or other food products featured by
“ABC” Restaurants, within the Development Area, without the Company's prior written consent . In
applying for such consent, Area Franchisee will have the burden of establishing that any such activity by
it will not involve the use of benefits provided under this Agreement or constitute unfair competition with
Company or other franchisees of the Company.
8.3 Modification.
The parties have attempted in Sections 8.1 and 8.2 above to limit the Area Franc hisee's right to compete
only to the extent necessary to protect the Company from unfair competition. The partie s hereby
expressly agree that if the scope or enforceability of Section 8.1 or 8.2 is disputed at any time by Area
Franchisee, a court or arbitrator, as the case may be, may modify either or both of such provisions to the
extent that it deems necessary to make such provision(s) enforceable under applicable l aw. In addition,
the Company reserves the right to reduce the scope of either, or both, of said provisions without Are a
Franchisee's consent, at any time or times, effective immediately upon notice to Area Franchisee.
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IX
TERMINATION
9.1 Termination Pursuant to A Material Breach of This Agreement This Agreement may be terminated by Company for cause without notice or opportunity to cure ,
except for such notice as may be required by law, in the event of any material brea ch by Area Franchisee
of this Agreement. Material breach, as used herein, shall specifically include, among other things, the
following:
(a) Any attempt by Area Franchisee to sell, assign, transfer or encumber in whole or in part any or all
rights and obligations under this Agreement, in violation of the terms of this Agreement , or without the
written consents required, pursuant to this Agreement.
(b) Failure of Area Franchisee to meet the Minimum Development Obligation within the
Development Periods set forth herein.
9.2 Termination by Reason of a Material Breach of Other Agreement
This Agreement may be terminated, at the election of Company, in the event of a ny material breach
by Area Franchisee of an individual Franchise Agreement or any other agreement between Compa ny and
Area Franchisee, upon the notice, if any, specified in the Franchise Agreement or other agreement.
9.3 Effect of Termination
Upon the expiration of the Term, or upon the prior termination of this Agreement, Area Franchisee
shall have no further right to construct, equip, own, open or operate additional Restaurants which are not,
at the time of such termination or expiration, the subject of a then existing Franc hise Agreement between
Area Franchisee and Company which is in full force and effect, and Company may itself construct, equip,
open, own or operate, or license others to construct, equip, open, own or operate Restaurants in t he
Development Area, except as provided in Sections 4.3 and 4.4 of this Agreement, and as provided in any
Franchise Agreement executed pursuant to this Agreement.
X
CORPORATE OR PARTNERSHIP AREA FRANCHISEE
10.1 Corporate or Partnership Area Franchisee (a) If Area Franchisee is a corporation or limited partnership, there is set forth below t he name and
address of each shareholder or partner in Area Franchisee:
NAME ADDRESS
NUMBER OF SHARES OR PERCENTAGE INTEREST
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(b) If Area Franchisee is a corporation or general partnership, there is set forth below the nam e and
address of each director or general partner, as applicable, of Area Franchisee:
NAME ADDRESS
(c) The address where Area Franchisee's financial Records, and corporate or partnership records, a s
applicable, are maintained is:
(d) If Area Franchisee is a corporation or partnership, there is set forth below the names, and
addresses and titles of Area Franchisee's principal officers or partners who will be devoting t heir full time
to the Franchised Business of Area Franchisee:
NAME ADDRESS
(e) Area Franchisee shall notify Company in writing within ten (10) days of any change in the
information set forth in subparagraphs (a) through (d) above.
(f) Area Franchisee promptly shall provide such additional information as Company may from ti me to
time request concerning all persons who may have any direct or indirect financial i nterest in Area
Franchisee.
(g) If Area Franchisee is a corporation or partnership, each of the shareholders or partners, as
applicable, of Area Franchisee shall, by executing this Agreement, fully, unconditionally and irrevocably
guarantee the performance by Area Franchisee of all of its obligations hereunder. In addition, Franchisee
shall upon Company's request cause all of its current and future shareholders and partners to exec ute the
Company's standard form of Guarantee.
XI
ARBITRATION
11.1 General Any controversy or claim arising out of or relating to this Agreement, or any breach thereof,
including, without limitation, any claim that said Agreement, or any part thereof, i s invalid, illegal or
otherwise voidable or void, or the enforcement of any right or obligation which by its nature survi ves the
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expiration or termination hereof, shall be submitted to arbitration before and in accorda nce with the
Commercial Rules of Arbitration of the American Arbitration Association and judgment upon the award
may be entered in any court having jurisdiction thereof; provided, however, that this clause shall not be
construed to limit Company from bringing any action in any court of competent jurisdiction for injunctive
or other provisional relief as Company deems to be necessary or appropriate to protect i ts trademarks,
trade names, service marks, logotypes, insignia, trade dress and designs, or to enjoin or restrain Are a
Franchisee from otherwise causing immediate and irreparable harm to Company. Such arbitrat ion shall
take place in. This arbitration provision shall be deemed to be self-executing, and i n the event that either
party fails to appear at any properly noticed arbitration proceeding, an award may be entered against such
party notwithstanding said failure to appear.
XII
GENERAL CONDITIONS AND PROVISIONS
12.1 Relationship of Area Franchisee to Company It is expressly agreed that the parties intend by this Agreement to establish betwee n Company and
Area Franchisee the relationship of franchisor and franchisee. It is further agreed that Area Franchisee has
no authority to create or assume in Company's name or on behalf of Company, any obligation, express or
implied, or to act or purport to act as agent or representative on behalf of Company for a ny purpose
whatsoever. Neither Company nor Area Franchisee is the employer, employee, agent, partner or co-
venturer of or with the other, each being independent. Area Franchisee agrees that he wil l not hold
himself out as the agent, employee, partner or co-venturer of Company. All employees hired by or
working for Area Franchisee shall be the employees of Area Franchisee and shall not, for any purpose, be
deemed employees of Company or subject to Company control. Each of the parties agrees to file its own
tax, regulatory and payroll reports with respect to its respective employees and operations, saving and
indemnifying the other party hereto of and from any liability of any nature whatsoever by virtue thereof.
12.2 Indemnity by Area Franchisee
Area Franchisee hereby agrees to protect, defend and indemnify Company, and all of its past , present
and future shareholders, direct and indirect parent companies, subsidiaries, affiliates, office rs, directors,
employees, attorneys and designees and hold them harmless from and against any and all costs and
expenses, including attorneys' fees, court costs, losses, liabilities, damages, claims a nd demands of every
kind or nature on account of any actual or alleged loss, injury or damage to any person, firm or
corporation or to any property arising out of or in connection with Area Franchisee's operation of the
Franchised Business pursuant hereto.
12.3 No Consequential Damages For Legal Incapacity
Company shall not be liable to Area Franchisee for any consequential damages, including but not
limited to lost profits, interest expense, increased construction or occupancy costs, or othe r costs and
expenses incurred by Area Franchisee by reason of any delay in the delivery of Company's Offering
Circular caused by legal incapacity during the Term, or other conduct not due to the gross negligence or
misfeasance of Company.
12.4 Waiver and Delay
No waiver by Company of any breach or series of breaches or defaults in performance by Area
Franchisee, and no failure, refusal or neglect of Company to exercise any right, power or opti on given to
it hereunder or under any other franchise agreement between Company and Area Franchisee, whethe r
Form 2.02[2]
2022-14©
STP
entered into before, after or contemporaneously with the execution hereof (and whether or not rel ated to
the Restaurants) or to insist upon strict compliance with or performance of Area Franchisee 's obligations
under this Agreement or any other franchise agreement between Company and Area Franchisee, whether
entered into before, after or contemporaneously with the execution hereof (and whether or not rel ated to
the Restaurants), shall constitute a waiver of the provisions of this Agreement with respect to any
subsequent breach thereof or a waiver by Company of its right at any time thereafter to require exact and
strict compliance with the provisions thereof.
12.5 Survival of Covenants
The covenants contained in this Agreement which, by their terms, require performance by the parties
after the expiration or termination of this Agreement, shall be enforceable notwithsta nding said expiration
or other termination of this Agreement for any reason whatsoever.
12.6 Successors and Assigns
This Agreement shall be binding upon and inure to the benefit of the successors and assigns of
Company and shall be binding upon and inure to the benefit of Area Franchisee and his or their re spective
heirs, executors, administrators, successors and assigns, subject to the prohibitions against assignment
contained herein.
12.7 Joint and Several Liability
If Area Franchisee consists of more than one person or entity, or a combination thereof, the
obligations and liabilities of each such person or entity to Company are joint and several.
12.8 Governing Law
This Agreement shall be construed in accordance with the laws of the State of ________________.
12.9 Entire Agreement This Agreement and the Exhibits incorporated herein contain all of the terms and c onditions agreed
upon by the parties hereto concerning the subject matter hereof. No other agreements c oncerning the
subject matter hereof, written or oral, shall be deemed to exist or to bind any of t he parties hereto and all
prior agreements, understandings and representations, are merged herein and superseded hereby. Area
Franchisee represents that there are no contemporaneous agreements or understandings between the
parties relating to the subject matter of this Area Development Agreement that are not contained herein.
No officer or employee or agent of Company has any authority to make any representation or promise not
contained in this Agreement or any Offering Circular for prospective franchisees required by a pplicable
law, and Area Franchisee agrees that he has executed this Agreement without reli ance upon any such
representation or promise. This Agreement cannot be modified or changed except by written instrument
signed by all of the parties hereto.
12.10 Titles for Convenience
Article and paragraph titles used in this Agreement are for convenience only and shall not be deemed
to affect the meaning or construction of any of the terms, provisions, covenants, or conditions of thi s
Agreement.
Form 2.02[2]
©STP 2022-15
12.11 Gender
All terms used in any one number or gender shall extend to mean and include any other numbe r and
gender as the facts, context, or sense of this Agreement or any article or paragraph hereof may require.
12.12 Severability
Nothing contained in this Agreement shall be construed as requiring the commission of a ny act
contrary to law. Whenever there is any conflict between any provisions of this Agreement and any present
or future statute, law, ordinance or regulation contrary to which the parties have no l egal right to contract,
the latter shall prevail, but in such event the provisions of this Agreement thus affected shall be curtailed
and limited only to the extent necessary to bring it within the requirements of the law. In the event that
any part, article, paragraph, sentence or clause of this Agreement shall be held to be indefinite, invalid or
otherwise unenforceable, the indefinite, invalid or unenforceable provision shall be deemed de leted, and
the remaining part of this Agreement shall continue in full force and effect.
12.13 Counterparts
This Agreement may be executed in any number of counterparts, each of which shall be deemed to be
an original and all of which together shall be deemed to be one and the same instrument.
12.14 Fees and Expenses
Should any party hereto commence any action or proceeding for the purpose of enforcing, or
preventing the breach of, any provision hereof, whether by arbitration, judicial or quasi-judicial action or
otherwise, or for damages for any alleged breach of any provision hereof, or for a declaration of such
party's rights or obligations hereunder, then the prevailing party shall be reimbursed by the losi ng party
for all costs and expenses incurred in connection therewith, including, but not limited to, reasonable
attorneys' fees for the services rendered to such prevailing party.
12.15 Notices
Except as otherwise expressly provided herein, all written notices and reports permitted or required to
be delivered by the parties pursuant hereto shall be deemed so delivered at the t ime delivered by hand,
one (1) business day after transmission by facsimile or other electronic system, or three (3) business days
after placement in the United States Mail by Registered or Certified Mail , Return Receipt Requested,
postage prepaid and addressed as follows:
If to Company:
Facsimile No. ( ) -
Attn: Chief Executive Officer
If to Area Franchisee:
Facsimile No. ( ) -
or to such other address as such party may designate by ten (10) days' advance written notice to the other
party.
Form 2.02[2]
2022-16©
STP
XIII
SUBMISSION OF AGREEMENT
13.1 General The submission of this Agreement does not constitute an offer and this Agreement shall bec ome
effective only upon the execution thereof by Company and Area Franchisee. THIS AGREEMENT
SHALL NOT BE BINDING ON COMPANY UNLESS AND UNTIL IT SHALL HAVE BEEN
ACCEPTED AND SIGNED BY THE PRESIDENT OF COMPANY. THIS AGREEMENT SHALL
NOT BECOME EFFECTIVE UNTIL AND UNLESS AREA FRANCHISEE SHALL HAVE BEEN
FURNISHED BY COMPANY WITH ALL DISCLOSURE DOCUMENTS, IN WRITTEN FORM, AS
MAY BE REQUIRED UNDER OR PURSUANT TO APPLICABLE LAW, FOR REQUISITE TIME
PERIODS.
Form 2.02[2]
©STP 2022-17
XIV
ACKNOWLEDGMENT
14.1 General Area Franchisee, and its shareholders and partners, as applicable, jointly and severally a cknowledge
that they have carefully read this Agreement and all other related documents to be executed concurrently
or in conjunction with the execution hereof, that they have obtained the advice of c ounsel in connection
with entering into this Agreement, that they understand the nature of this Agreement, and that they intend
to comply herewith and be bound hereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed a s of the
first date set forth above.
ACCEPTED on this day of
, 20 .
COMPANY:
a corporation
By
Its
AREA FRANCHISEE:
By:
Its
an Individual
an Individual
an Individual
Form 2.02[2]
2022-18©
STP
EXHIBIT A
DEVELOPMENT AREA
Form 2.02[2]
©STP 2022-19
EXHIBIT B
MINIMUM DEVELOPMENT OBLIGATIONS
Development Period
Ending Cumulative
No. to be in Operation
1 , 20
2 , 20
3 , 20
4 , 20
Form 2.02[2]
2022-20©
STP
EXHIBIT C
SPOUSAL CONSENT
Each of the undersigned, each being the spouse of an individual who executed this Agreement as
Area Franchisee or if Area Franchisee is a partnership, a spouse of a general partner, consents t o all of the
terms of this Agreement and the execution thereof.
Dated: By:
By:
