TACO BELL CORP.
FRANCHISE AGREEMENT
[TACO BELL CORP. - LOGO]
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VOID - SAMPLE COPY
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Revised 1/96
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TACO BELL CORP.
FRANCHISE AGREEMENT
TABLE OF CONTENTS
PAGE
1. RECITALS ............................................................................................1
GRANT OF LICENSE ......................................................................................1
1.0 Restaurant Location ...........................................................................1
1.1 Franchise Compliance with Agreement ..........................................................1
2. TERM ..................................................................................................2
3. RESTAURANT SYSTEMS AND PROCEDURES......................................................................2
3.0 Restaurant advice and assistance, pre-opening and continuing ..................................2
3.1 Franchisee's best efforts, location of residence, and days and hours of operation ............ 2
3.2 Compliance with Manual ....................................................................... 2
3.3 Revisions of Manual............................................................................2
3.4 Commitment to chain uniformity ................................................................2
3.5 Product and menu uniformity ...................................................................2
3.6 Company ownership of trade secrets ........................................................... 3
3.7 Company ownership of Manual....................................................................3
3.8 Franchisee conflicts of interest in similar businesses ........................................3
4. TRAINING ..............................................................................................3
4.0 Courses provided and required .................................................................3
4.1 Approved Manager...............................................................................3
4.2 Refresher courses .............................................................................3
4.3 Required employee training ....................................................................3
4.4 Cost of training courses ......................................................................3
5. RESTAURANT MAINTENANCE ................................................................................3
5.0 Conformity with System required ...............................................................3
5.1 Modernization .................................................................................4
5.2 Lease clause requiring de-identification at expiration or termination .........................4
6. ADVERTISING AND PUBLICITY..............................................................................4
6.0 Company development of advertising programs ...................................................4
6.1 (a) Universal Fund ............................................................................4
6.1 (b) Marketing fund policy .....................................................................4
6.1 (b)(i) Local media funds ......................................................................4
6.1 (b)(ii) Universal funds ...................................................................... 4
6.2 Company's right to invest monies...............................................................5
6.3 Compliance with manual.........................................................................5
6.4 Publicity .................................................................................... 5
7. FEES .................................................................................................5
7.0 (a) Initial fee and grand opening expense .................................................... 5
7.0 (b) Franchisee fee ............................................................................5
7.0 (c) Marketing fee .............................................................................5
7.1 Payment terms and late charges ................................................................5
7.2 Definition of "Gross Sales"....................................................................5
8. RECORD KEEPING ........................................................................................5
8.0 Company provided system .......................................................................5
8.1 Required reports ..............................................................................5
8.2 Annual statements by public accountant ........................................................6
8.3 Compliance with manual.........................................................................6
8.4 Franchisee Stock Register......................................................................6
8.5 Right to inspect records.......................................................................6
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TABLE OF CONTENTS, CONTD................................................................................PAGE
9. RESTAURANT INSPECTION ................................................................................6
9.0 Right to inspect premises......................................................................6
10. RELATIONSHIP OF PARTIES AND INDEMNIFICATION ..........................................................6
10.0 Independent contractors ......................................................................6
10.1 Indemnification ..............................................................................6
11. INSURANCE ............................................................................................7
11.0 Kind and amounts .............................................................................7
11.1 Certificates ................................................................................ 7
11.2 All-Risk Property Insurance...................................................................7
11.3 Company right to procure .....................................................................7
12. DEBTS AND TAXES ..................................................................................... 7
13. SALE AND ASSIGNMENT .................................................................................8
13.0 Conditions to consent.........................................................................8
13.1 Personal confidence in Franchisee.............................................................8
13.2 Restriction on transfer ..................................................................... 8
13.3 Corporate stock transfers ................................................................... 8
13.4 Franchisee death or incapacity ...............................................................9
13.5 Right of first refusal ...................................................................... 9
13.6 Company right to transfer ...................................................................9
14. TRADEMARKS .......................................................................................... 9
14.0 Company ownership ........................................................................... 9
14.1 Non-exclusive ............................................................................... 9
14.2 Company right to develop and sell consumer products .........................................10
14.3 Franchisee pre-packaging prohibited ........................................................ 10
14.4 Company right to goodwill....................................................................10
14.5 Trademark use consistent with image .........................................................10
14.6 Company right to change trademarks ..........................................................10
14.7 Infringements .............................................................................. 10
14.8 Franchisee's use of trademark................................................................10
15. EXPIRATION AND TERMINATION ......................................................................... 10
15.0 Company rights to terminate ................................................................ 10
15.1 De-identification .......................................................................... 11
15.2 Costs of legal proceedings; damages ........................................................ 11
15.3 Company option to purchase or lease ........................................................ 11
15.4 Liquidated Damages ......................................................................... 12
15.5 Condemnation ............................................................................... 12
16. MISCELLANEOUS ......................................................................................12
16.0 Waiver ..................................................................................... 12
16.1 Cumulative Remedies ........................................................................ 12
16.2 Partial Invalidity ......................................................................... 12
16.3 Choice of Law .............................................................................. 12
16.4 Jurisdiction and Venue ..................................................................... 12
16.5 Notices .....................................................................................12
16.6 Terms and Headings ......................................................................... 13
16.7 Compliance with laws ....................................................................... 13
16.8 Lease of Land and Building ................................................................. 13
16.9 Entire Agreement ........................................................................... 13
16.10 Amendment or Modification.................................................................. 13
SIGNATURES .............................................................................................. 13
APPENDIX I
(ii)
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TACO BELL CORP.
FRANCHISE AGREEMENT
THIS AGREEMENT is made __________, 2000, by and between TACO BELL
CORP., a California corporation (the "Company"), and [Franch1] of [Res1],
and [Franch2] of [Res2] (the "Franchisee").
RECITALS
A. The Company is the originator of a distinctive concept for the
marketing, preparation and sale of certain Mexican and other style food products
(the "TACO BELL RESTAURANTS" or the "Restaurants").
B. The Company owns or controls various trademarks, service marks, trade
names, trade dress, designs (including product package designs), symbols,
emblems, logos, insignias, external and internal building designs and
architectural features and combinations of the foregoing (collectively, the
"Trademarks"), which are used by it, its franchisees and its licensees in
offering, selling and distributing its products and services. Some of the
Trademarks are set forth and described on Appendix 1 to this Agreement.
C. The Company has developed, owns and has adopted for its own use and
the use of its franchisees and licensees a unique system of quick service
restaurant operation (the "Taco Bell System" or the "System"), consisting of a
variety of distinctive sign and facility designs, equipment specifications and
layouts, recipes, methods of food presentation and service, business techniques,
copyrighted manuals and other materials, trade secrets, know-how and technology.
D. The Company has established, and is continuing to develop and
operate, a chain of quick service "Taco Bell" and "Taco Bell Express"
restaurants or units which are fundamentally uniform in image and in food style
and which share many fundamental menu items and methods of operation (the "Taco
Bell Chain").
E. The Taco Bell Chain enjoys widespread public acceptance due in part
to (1) uniform high standards for the preparation, presentation and service of
Taco Bell food; (2) an essentially uniform menu, image, appearance and methods
of operation in all Restaurants and units; (3) uniform use of the System and the
valuable and distinctive Trademarks; and (4) the Taco Bell franchisees' and
licensees' commitments to maintain and enhance the goodwill and public
acceptance of Taco Bell products, services and Restaurants by strict adherence
to these uniform standards as they now exist and may be revised from time to
time pursuant to this Agreement.
F. The Franchisee, aware of the above, has applied for a franchise and
desires to establish and operate a Taco Bell Restaurant upon the terms and
conditions set forth in this Agreement.
WITNESSETH
The parties hereby act and agree as follows:
SECTION 1: GRANT OF LICENSE
1.0 The Company hereby grants to the Franchisee a limited license
to use the Trademarks solely in direct connection with the sale of the food,
beverage and other products referred to in Subsection 3.5 from the TACO BELL
RESTAURANT to be established pursuant to this Agreement at the following
location:
Unit No. [UnitNo]
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[Address]
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[CityState]
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(the "Restaurant").
The grant of this limited license to use the Trademarks is further subject to
the terms, conditions and limitations hereinafter set forth; including, among
others, those contained in Section 14 entitled "TRADEMARKS."
1 .1 Throughout the Term of this Agreement (as defined below),
Franchisee shall operate the Restaurant in strict accordance with the terms of
this Agreement and shall perform all other obligations of the Franchisee