FRANCHISE AGREEMENT

This Franchise Agreement is entered into as of the ____ day of ______________, _______, by and between TGI Friday’s Inc., a New York corporation (“Friday’s”), with its principal place of business located at 4201 Marsh Lane, Carrollton, Texas, 75007, and Main St. California, Inc., an Arizona corporation (“Franchisee”), with its principal place of business located at 5050 North 40 ^th Street, Suite 200, Phoenix, Arizona 85018, and its Principals (as defined herein below).

WHEREAS, Friday’s has developed and owns the System;

WHEREAS, Friday’s intends to identify the System with the Proprietary Marks;

WHEREAS, Friday’s continues to develop, use and control the use of the Proprietary Marks to identify the source of services and products marketed under the System and to represent the System’s high standards;

WHEREAS, Friday’s and Franchisee (or Developer, as defined therein) have entered into the Development Agreement; and

WHEREAS, Franchisee wishes to obtain certain rights to use the System in connection with the operation of the Restaurant and to receive training and other assistance provided by Friday’s in connection therewith as described herein.

NOW, THEREFORE, the parties, in consideration of the undertakings and commitments set forth herein, agree as follows:

As used in this Agreement the following words and phrases shall have the meanings attributed to them in this Section:

Action - any cause of action, suit, proceeding, claim, demand, investigation or inquiry (whether a formal proceeding or otherwise) asserted or instituted by a third party with respect to which the indemnity described in Section 18 applies.

Affiliate - Carlson Restaurants Worldwide Inc., or any subsidiary thereof or any subsidiary of TGI Friday’s Inc.

Agreement - this Franchise Agreement.

Business Days - each calendar day except Saturday, Sunday and national legal holidays.

Commencement Date - the first to occur of the date the Restaurant opens for business to the public or the date Franchisee is required to open the Restaurant for business pursuant to the terms hereof.

Commencement Date Agreement - an agreement memorializing the Commencement Date in the form of Exhibit A hereto.

Competing Business - a restaurant business offering the same or similar products and services as offered by restaurants in the System or restaurants in any other concept or system owned, operated, managed or franchised by Friday’s or any Affiliate, including, without limitation, waiter/waitress service, sit-down dining and bar services.

Confidential Information - the System, the Development Manual, the Manuals, other manuals, the Standards, written directives and all drawings, equipment, recipes, computer and point of sale programs (and output from such programs), and any other information, know-how, techniques, material and data imparted or made available by Friday’s which is (i) designated as confidential; (ii) known by Franchisee to be considered confidential by Friday’s; or (iii) by its nature inherently or reasonably considered confidential.

Control of the Real Estate - a fully executed deed, lease, sublease or other occupancy agreement, in form and substance satisfactory to Friday’s, evidencing the control by Franchisee of the property upon which the Restaurant is situated.

Design Concept Drawings - Franchisee’s site plans showing parking layout, landscaping and Site signage, floor plan with seating layout and food service layout with legend, exterior elevations with signage, transverse and longitudinal building cross sections, typical wall sections, interior elevations of all walls in the front of the Restaurant, and a reflected ceiling plan showing the location of all front-of-the-Restaurant lighting, ceiling stained glass and ceiling fans.

Developer - as defined in the Development Agreement.

Development Agreement - that certain agreement dated ____________________, _____, between Friday’s and Franchisee (or Developer, as therein defined) relating to the development of T.G.I. Friday’s ^® Restaurants.

Development Manual - Friday’s manual, as amended from time to time by Friday’s, describing (generally) the procedures and parameters for the development of T.G.I. Friday’s ^® Restaurants.

Entertainment Park - includes, but is not limited to any amusement park, theme park, or any other entertainment venue which has a national presence of at least two (2) or more such parks in existence, and which has averaged at least 1.5 million persons in annual attendance for the preceding three (3) calendar years at any one (1) park location.

Event of Default - as defined in Sections 16.01 and 16.02.

Franchise Fee - a non-refundable initial franchise fee of Fifty Thousand Dollars ($50,000.00) paid by Franchisee to Friday’s upon the execution of this Agreement, which amount shall be deemed fully earned by Friday’s upon payment.

Franchisee - Main St. California, Inc., an Arizona corporation.

Franchisee Indemnitees - Franchisee, the Principals, and their respective directors, officers, employees, agents, shareholders, affiliates, successors and assigns and the respective directors, officers, employees, agents, shareholders, affiliates, successors and assigns of each.

Friday’s - TGI Friday’s Inc., a New York corporation.

Friday’s Indemnitees - Friday’s, its directors, officers, employees, agents, shareholders, affiliates, successors and assigns and the respective directors, officers, employees, agents, shareholders and affiliates of each.

Furnishings - all of the decorative memorabilia, furnishings, signs, equipment, advertising materials, inventory, trade dress, menus, items bearing any of the Proprietary Marks and other tangible assets used in connection with Restaurant operation.

Gross Sales - A                     For the purposes of this Agreement, “Gross Sales” shall mean:

(1)         the entire amount of the actual sales price, whether for cash or other consideration, of all sales of food, beverages, merchandise and services in, on, or from the Restaurant, including receipts from mail, facsimile or telephone orders received or filled from the Restaurant and telephone and vending machine receipts;

(2)         all deposits not refunded to purchasers;

(3)         orders taken, although such orders may be filled elsewhere;

(4)         payments to Franchisee by any concessionaire, franchisee or person otherwise in the Restaurant with Friday’s consent; and

(5)         promotional allowances to customers whether negative or positive in an amount equal to Franchisee’s retail price for food and/or beverages prepared and served by Franchisee to the extent of the discount (in whole or in part) provided to the customers, but only to the extent that said amount for promotional allowances exceeds two and one-half percent (2 ½%), or such higher percentage as permitted by Friday’s, of Gross Sales as calculated without inclusion of said amount. Such promotional allowances shall include the retail price of food and beverages covered by appetizer and dinner cards and the customer comp cards to which Friday’s gives consent. Promotional allowances provided in exchange for goods or services shall be includable in Gross Sales without benefit of the two and one-half percent (2 ½%) discount, or such higher percentage as permitted by Friday’s, (funds expended by Franchisee to comply with its local advertising requirement pursuant to Section 10.01.A shall not be included as promotional allowances under this section).

B.             Gross Sales shall not include:

(1)         the amount of returns to shippers or manufacturers;

(2)         the amount of any cash or credit refunds made upon any sale where the food, beverages, merchandise or service sold or some part thereof is thereafter returned by the customer and accepted by Franchisee;

(3)         receipts from sales of furniture, trade fixtures or other extraordinary sales (unless bearing any Proprietary Mark) not made in the ordinary course of business;

(4)         any sales or value added tax required by any duly constituted taxing authority to be separately accounted for and collected on its behalf by Franchisee directly from Franchisee’s customers and paid by Franchisee to the taxing authority; and

(5)         meals served to an employee at no cost while the employee is on duty, or the discounted portion of meals served to an employee.

C.         Each charge or sale upon installment or credit shall be treated as a sale for the full price in the month during which such charge or sale shall be made, irrespective of whether, or of the time when, Franchisee shall receive payment (whether full or partial) thereof.

Headquarters - the location(s) designated from time to time by Friday’s as its principal place of business.

Indemnitees - Friday’s Indemnitees and/or Franchisee Indemnitees.

Internet - any means of electronic communication that employs inter-connected computer networks to communicate information (of any kind) by fiber optics, wire, radio or other methods of transmission, including the myriad of computers, telecommunications facilities and similar means (both equipment and software) that comprise the interconnected worldwide network of networks that employ the TCP/IP (Transmission Control Protocol/Internet Protocol) or any predecessor or successor protocols to that protocol.

Intranet - a private method of communication for use only by employees and franchisees of Friday’s; the Friday’s Intranet may be either a “true” intranet (a series of inter-connected computers that use the same type of software as the Internet, but that are not technically part of the Internet and do not use the Internet to transmit material to one another) or an extranet (which will actually transmit information over the Internet, but require a password to access data on the servers used by Friday’s).

Losses and Expenses - compensatory, exemplary or punitive damages, fines, charges, costs, expenses, lost profits, reasonable fees of attorneys and other engaged professionals, court costs, settlement amounts, judgments, costs of or resulting from delays, financing, costs of advertising material and media time/space, and costs of changing, substituting or replacing the same, and any and all expenses of recall, refunds, compensation, public notices and other such amounts incurred in connection with the matters described in Section 18.

Manuals - Friday’s confidential operating manuals, as amended from time to time by Friday’s, which contain the Standards (as defined below) for the operation or marketing of the Restaurant including (i) those relating to the selection, purchase, service and sale of all products being sold and any services to be offered at the Restaurant or through Friday’s Web site; (ii) those relating to the maintenance and repair of the Restaurant, buildings, grounds, equipment, signs, interior and exterior decor items, fixtures and furnishings; (iii) those relating to employee apparel and dress, accounting, bookkeeping, record retention, computer and other business systems, procedures and operations; and (iv) those relating to any advertising or marketing of the T.G.I. Friday’s Restaurants in any media, including print, broadcasting or electronic communications, such as the Internet. The Manuals may also address other issues mentioned in this Agreement or relating to the relationship between Friday’s and Franchisee, such as rules and regulations for participation in the Friday’s Internet Web site including reservation service or other e-commerce activities (including sales of memorabilia) through Friday’s Internet Web site.

Material Event of Default - an Event of Default which constitutes a substantial deviation from the performance required.

Multi-Unit Manager(s) - the individual(s) designated as described in Section 4.05 who shall be solely dedicated to the management and supervision of the Restaurant and certain other restaurants developed pursuant to the Development Agreement.

NSO Team - a “new store opening team” consisting of Friday’s employees and certain of Franchisee’s employees to whom Friday’s has consented which shall perform the functions described in Section 4.09.

Occupancy Contract - the agreement (including, without limitation, any lease, deed, contract for sale, contract for deed, land contract, management contract, license or other agreement purporting to grant any right, title or interest in or to the Site) pursuant to which Franchisee shall occupy or acquire rights in the Site.

Operator - an individual designated as described in Section 4.02 who shall devote his full time and best efforts to the management and supervision of (i) Franchisee’s duties and obligations hereunder and (ii) the operation of (a) the Restaurant and (b) all T.G.I. Friday’s ^® Restaurants developed pursuant to rights granted by Friday’s.

Other Concepts - Retail, wholesale, restaurant, bar, tavern, take-out or any other type of business involving the production, distribution or sale of food products, beverages, services, merchandise or other items in connection with the use of one, some or all of the Proprietary Marks or other names or marks, but utilizing a system other than the System pursuant to which a T.G.I. Friday’s ^® Restaurant is operated.

Owner - the party (if other than the Franchisee) owning or controlling the Site and being a party (with Franchisee) to the Occupancy Contract.

Payments - all transfers of funds from Franchisee to Friday’s including, without limitation, the Franchise Fee, the Royalty Fee and reimbursement of expenses.

Permanent Disability - any physical, emotional or mental injury, illness or incapacity which would prevent the afflicted person from performing his obligations hereunder for more than ninety (90) consecutive days as determined by a licensed physician selected by Friday’s.

Preliminary Site Consent - written communication from Friday’s to Developer notifying Developer that a proposed site has received the consent of the Friday’s Site Review Committee.

Principal(s) - Main Street Restaurant Group, Inc., who is (and such other persons or entities to which Friday’s gives consent and which are from time to time) the record and beneficial owner of, and has the right to vote its respective interest (collectively 100%) in the Securities of Franchisee or the securities or partnership interest of any person or entity designated by Friday’s which owns or controls a direct or indirect interest in the Securities of the Franchisee.

Project Manager - an individual designated as described in Section 4.04 who shall devote his full-time and best efforts to the coordination and completion of Restaurant construction.

Proprietary Marks - certain trademarks, trade names, service marks, trade dress, emblems and indicia of origin designated by Friday’s from time to time for use in connection with the operation of T.G.I. Friday’s ^® Restaurants pursuant to the System, including, without limitation, “ T.G.I. Friday’s ^® ”, “ Friday’s ^® ” and “ The American Bistro ^® ” .

Publicly-Held Entity - a corporation or other entity whose equity securities are (i) registered pursuant to applicable law; (ii) widely held by the public; and (iii) traded on a public securities exchange or over the counter pursuant to applicable law.

Renewal Election Date - the date on which Franchisee notifies Friday’s in writing of its election to renew this Agreement.

Renewal Franchise Agreement - the franchise agreement as defined in Section 17.09.

Renewal Term - twenty years from the expiration of the Term of this Agreement.

Representative - an individual, designated as described in Section 4.01 who (i) owns an equity interest in the Franchisee and (ii) is authorized to act on behalf of, and bind, Franchisee with respect to this Agreement.

Restaurant - the T.G.I. Friday’s ^® Restaurant to be developed and operated pursuant to this Agreement.

Restaurant Manager(s) - general manager, assistant general manager, kitchen manager and other managers required for the management, operation, supervision and promotion of the Restaurant pursuant to the terms hereof.

Restricted Area - the geographical area described in Exhibit C ; provided, however, the Restricted Area (a) shall in no event exceed a three (3) mile radius surrounding the Site, (b) not include any airport properties, professional sports stadiums, military bases, Entertainment Parks or casinos located within the geographical area described in Exhibit C , and (c) not include the area contained within a three (3) mile radius of any other T.G.I. Friday’s ^® Restaurant located within such Restricted Area as of the date of this Agreement.

Royalty Fee - a continuing monthly fee in the amount of four percent (4%) of Gross Sales at the Restaurant in each accounting month payable by Franchisee to Friday’s.

Security - the capital stock of, partner’s interest in, or other equity or voting interest in Franchisee, including such interests issued or created subsequent to the date hereof.

Site - the location of the Restaurant, being __________________________________.

Standards - Friday’s standards, instructions, requirements, methods, specifications and procedures for the operation and marketing of the Restaurant, as amended from time to time by Friday’s, contained in, and being a part of, the Confidential Information pursuant to which Franchisee shall develop and operate the Restaurant at the Site.

System - a unique, proprietary system developed and owned by Friday’s (which may be modified or further developed from time to time by Friday’s) for the establishment and operation of full-service restaurants and bars/restaurants under the Proprietary Marks, which includes, without limitation, a distinctive image consisting of exterior and interior design, decor, color scheme and furnishings; special recipes, menu items and full service bar; uniform standards, products, services and specifications; procedures with respect to operations, inventory and management control (including accounting procedures and policies); training and assistance; and advertising and promotional programs.

Term - a period commencing as of the date hereof and continuing until the twentieth (20th) anniversary of the Commencement Date.

Territorial Expenses - such costs and expenses incurred by or assessed with respect to Friday’s (or other described party’s) employees, agents and/or representatives in connection with activities in the Territory which Franchisee is obligated to pay pursuant to this Agreement, including, without limitation, hotel/lodging, transportation and meals, and other related or incidental expenses.

TGIFM - TGI Friday’s of Minnesota, Inc., a Minnesota corporation and a subsidiary of Friday’s.

T.G.I. Friday’s ^® Restaurants - restaurants operated in accordance with the System under the registered service marks “ Friday’s ^® ” or “ T.G.I. Friday’s ^® ”.

Training Center - the location(s) specified from time to time by Friday’s as the training center.

Transfer - the sale, assignment, conveyance, license, devise, bequest, pledge, mortgage or other encumbrance, whether direct or indirect, of (i) this Agreement or the Development Agreement; (ii) any or all rights or obligations of Franchisee herein; or (iii) any interest in any Security, including the issuance of any new Securities.

Transferee Owner(s) - the owner of any and all record or beneficial interest in the capital stock of, partner’s interest in, or other equity or voting interest in any transferee of a Transfer occurring pursuant to the terms of Section 14.

Wage Expenses - such wages and/or salaries (including a reasonable allocation of the cost of benefits) of, or with respect to, Friday’s (or other described party’s) employees, agents and or representatives to be reimbursed to Friday’s or such party as described herein.

2.01        A.         Friday’s grants to Franchisee the right, and Franchisee accepts the obligation, subject to the terms and conditions herein, to develop and operate the Restaurant pursuant to the System at the Site and to use solely in connection therewith the Proprietary Marks. During the Term and for so long as no Event of Default has occurred and is continuing and no event has occurred which, with the giving of notice or lapse of time, or both, would constitute an Event of Default, Friday’s will not develop or operate, nor authorize any other person to develop or operate, a T.G.I. Friday’s ^® Restaurant within the Restricted Area.

B.         Subject to any rights which may exist pursuant to the Development Agreement, Friday’s expressly reserves the right, and Franchisee acknowledges that Friday’s has the exclusive unrestricted right to engage, directly and indirectly, through its employees, developers, franchisees, licenses, agents and others, in the development and operation of T.G.I. Friday’s Restaurants outside the Restricted Area.

C.         Nothing contained in this Section 2 shall in any way limit or restrict the rights reserved by Friday’s in Section 9.02(F).

2.02          Friday’s expressly reserves the right, and Franchisee acknowledges that Friday’s has the exclusive unrestricted right, to engage, directly and indirectly, through its employees, developers, franchisees, licensees, agents and others within and outside the Restricted Area, in Other Concepts, including a Front Row ^® Sports Grill. Such Other Concepts may compete with Franchisee directly or indirectly. Friday’s reserves the right to use the Proprietary Marks in connection with Other Concepts.

2.03           Unless sooner terminated as provided herein, this Agreement shall be effective on the date hereof, and continue until the expiration of the Term. Within thirty (30) days after the Commencement Date, the parties shall execute the Commencement Date Agreement.

3.01          A.      Upon execution of this Agreement, Franchisee shall pay to Friday’s the Franchise Fee. A credit shall be applied to the Franchise Fee in an amount equal to the portion of the Development Fee (as defined in the Development Agreement) applicable to the Restaurant which was paid by the Developer pursuant to the Development Agreement.

B.         Franchisee shall pay the Royalty Fee on or before the fifteenth (15th) day of each month with respect to Gross Sales at the Restaurant in the preceding accounting month.

3.02          A.         All Payments shall be submitted to Friday’s at the address provided in Section 19 hereof, in care of the “Treasurer”, or such other address as Friday’s shall designate in writing.

B.       Payments shall be received by Friday’s (i) upon execution hereof in the case of the Franchise Fee; (ii) as described in Section 3.01.B in the case of the Royalty Fee; and (iii) not more than thirty (30) days after date of invoice for all other Payments. Delinquent Payments shall bear interest from the due date until received by Friday’s at eighteen percent (18%) per annum or the maximum rate permitted by law, whichever is less.

3.03          Any taxes or duties imposed upon or with respect to this Agreement or any materials, supplies or specifications acquired by or provided to Franchisee pursuant to or in connection with this Agreement shall be paid by Franchisee. Franchisee shall pay to Friday’s an amount equal to any sales tax, gross receipts tax, excise tax or any license or tax similar thereto which is imposed, directly or indirectly, on Friday’s with respect to any Payments to Friday’s required under this Agreement. The preceding sentence shall not apply to any franchise tax or income, or excess profits tax (or any tax in lieu thereof) imposed on Friday’s with respect to the aforesaid payments.

3.04           Franchisee shall not withhold or off-set any portion of any Payment due to Friday’s alleged non-performance under this Agreement or any other agreement by and between Friday’s and Franchisee or their respective parent corporations, subsidiaries or affiliates.

4.01           Franchisee hereby designates Bill Shrader as the Representative. Any replacement Representative shall be designated within ten (10) days of the prior Representative’s resignation or termination. Each Representative shall attend and successfully complete at the Training Center, Friday’s “Owner’s Orientation Program” (currently, approximately four (4) weeks). The Representative hereunder and under the Development Agreement shall be the same individual.

4.02           Franchisee hereby designates Stuart Gee as the Operator. Any replacement Operator shall be designated within ten (10) days of the prior Operator’s resignation or termination. Each Operator shall attend and successfully complete at the Training Center, within six (6) months of appointment, Friday’s training program required for Restaurant Managers ( see Section 4.03). The Operator hereunder and under the Development Agreement shall be the same individual.

4.03           The requisite number of Restaurant Managers, as determined by Friday’s, shall be employed by Franchisee for the Restaurant. All Restaurant Managers shall attend and successfully complete at the Training Center, Friday’s training program for Restaurant Managers of T.G.I. Friday’s ^® Restaurants (currently, one (1) week). Additionally, the Restaurant Managers shall attend and successfully complete additional training (currently, approximately fourteen (14) weeks) at such then existing T.G.I. Friday’s ^® Restaurants as shall be designated by Friday’s. Any previously trained Restaurant Manager who is not a general manager, but has been selected to become a general manager, shall attend and successfully complete such additional training as Friday’s may require. Friday’s may require general and kitchen managers, at Franchisee’s expense, to attend and successfully complete additional training at the Training Center.

4.04          Not less than sixty (60) days prior to the commencement of Restaurant construction, Franchisee shall designate the Project Manager. Any replacement Project Manager shall be designated within ten (10) days of the prior Project Manager’s resignation or termination.

4.05           In the event this Agreement is for the third T.G.I. Friday’s ^® Restaurant to be developed under the Development Agreement, Franchisee shall designate a Multi-Unit Manager. Additional Multi-Unit Managers shall be designated from time to time as reasonably required by Friday’s. Prior to assuming his duties, each Multi-Unit Manager shall have successfully completed training as a Restaurant Manager and shall attend at the Training Center, and successfully complete, Friday’s training program for Multi-Unit Managers (currently, two (2) days at the Training Center and approximately four (4) weeks at such then existing T.G.I. Friday’s ^® Restaurants as shall be designated by Friday’s).

4.06           Friday’s shall have the right to interview and consent to each Operator, each Multi-Unit Manager, each Project Manager and all Restaurant Managers. Friday’s shall endeavor to conduct such interviews at the Restaurant, but may require that such interviews occur at Headquarters. Franchisee shall bear all costs and expenses related to making the Restaurant Managers available for such interviews.

4.07         Friday’s shall provide instructors, facilities and materials for training at the Training Center, and shall provide, at its option, other training programs (at non-Training Center locations) as may be designated by Friday’s from time to time in the Manuals or otherwise in writing. Franchisee shall reimburse Friday’s for any Territorial Expenses or other direct expenses incurred by Friday’s for such other training programs.

4.08          Except as provided herein, Franchisee shall bear all costs and expenses relating to any Representative, Operator, Multi-Unit Manager, Project Manager and Restaurant Manager training.

4.09          The NSO Team shall assist in (i) training Franchisee’s employees at the Site and (ii) the opening of the Restaurant. The NSO Team typically consists of a combined total of approximately twelve (12) employees of Friday’s and Franchisee (the actual number of members shall be determined by Friday’s, depending upon the number of T.G.I. Friday’s ^® Restaurants already being operated by Franchisee and such other criteria as Friday’s deems reasonable). The members of the NSO Team shall be subject to Friday’s consent. The number of Friday’s employees selected to serve on the NSO Team for the Restaurant is determined according to the following schedule, provided however, Friday’s may elect to modify this schedule in the event the total number of people on the NSO Team is greater or less than twelve (12):

In the event Friday’s determines that more than 12 NSO team members are necessary for an opening, Developers with five or more restaurants open (inclusive of the new restaurant) shall be responsible for the costs associated with the team members in excess of 12. For Developers with less than five restaurants open, Friday’s will bear the costs of the additional team members.

If Franchisee fails or is unable to timely provide such employees, Friday’s may, but shall not be obligated to, staff the NSO Team with Friday’s employees. Friday’s and Franchisee shall each be responsible for (a) making all travel, food and lodging arrangements and (b) the wages and other expenses of the NSO Team members provided by each; provided, however, that Franchisee shall reimburse Friday’s for the Territorial Expenses and the Wage Expenses of Friday’s employees who are provided as a result of Franchisee’s failure or inability to provide Franchisee’s employees for participation on the NSO Team.

4.10         Franchisee shall comply with such employee training and testing procedures and requirements reasonably prescribed in the Manuals or otherwise in writing.

4.11         Friday’s may create an audio and/or video recording of any training programs at Friday’s expense.

5.01          Franchisee shall not relocate the Restaurant from the Site without Friday’s consent.

5.02          Friday’s shall have the right to review and consent to the Occupancy Contract prior to the execution thereof. Franchisee represents that the Occupancy Contract as consented to by Friday’s shall be executed by all necessary parties within ten (10) days following Friday’s consent thereto. Franchisee shall furnish Friday’s a complete copy of the fully executed Occupancy Contract within ten (10) days after execution. Unless it conveys to Franchisee fee simple title to the Site, the Occupancy Contract shall include the following covenants in a form substantially set forth below (Upon request, Friday’s shall provide to Franchisee sample lease provisons.):

A.         Owner shall deliver to Friday’s, simultaneously with delivery to Franchisee, any notice alleging Franchisee’s default under the Occupancy Contract which threatens or purports to terminate the Occupancy Contract or result in a foreclosure thereof;

B.         Friday’s may enter the Restaurant premises to protect the Proprietary Marks or the System or to cure any Event of Default or default under the Occupancy Contract;

C.         Franchisee may assign the Occupancy Contract to Friday’s without any fee or modification thereof and Friday’s may assign the Occupancy Contract or license or sublease the Restaurant premises for any part of the remaining term of the Occupancy Contract, each without Owner’s consent; and

D.         Owner and Franchisee shall not amend the Occupancy Contract in any way which is inconsistent with the provisions of Sections 5.02.A through D, inclusive.

5.03          Notwithstanding the terms of Section 5.02, Franchisee shall:

A.         deliver to Friday’s, immediately after delivery to or by Franchisee, any notice of default under the Occupancy Contract which threatens or purports to terminate the Occupancy Contract or result in a foreclosure thereof;

B.         permit Friday’s to enter the Restaurant premises to protect the Proprietary Marks or the System or to cure any Event of Default or default under the Occupancy Contract, all at Franchisee’s expense; and

C.         not amend the Occupancy Contract in any way which is inconsistent with the provisions described in Sections 5.02.A through D, inclusive.

6.01          Franchisee shall ensure that (i) materials satisfying the Standards are utilized in construction and (ii) such materials are purchased from suppliers as described in Sections 6.07 and 6.08.

6.02          Franchisee shall (a) employ a qualified architect and licensed general contractor to whom Friday’s shall have the right to consent, and (b) provide copies to Friday’s, upon request, of architectural or construction contracts applicable to the Restaurant. Upon request by Franchisee, Friday’s will make available to Franchisee, at Franchisee’s expense, (i) architectural consultation and advice; (ii) preparation of Design Concept Drawings; and (iii) consultation and advice on the purchase, display and installation of typical decorative memorabilia.

6.03          Franchisee shall (i) submit Design Concept Drawings, incorporating proposed adaptations to the local market for Friday’s consent; (ii) modify the Design Concept Drawings as reasonably required by Friday’s; and (iii) submit the modified Design Concept Drawings to Friday’s for final consent. Following Friday’s consent to the Design Concept Drawings, Franchisee shall, pursuant to the Manuals, (a) submit for Friday’s review, construction plans and specifications based upon the standard construction plans provided to Franchisee, adapted by Franchisee to the Design Concept Drawings for the Restaurant to which Friday’s has consented; (b) modify such plans and specifications as reasonably required by Friday’s; (c) submit such modified plans and specifications to Friday’s for final consent; and (d) construct the Restaurant pursuant to the plans and specifications to which Friday’s has consented. Design Concept Drawings and construction plans and specifications to which Friday’s has consented shall not be modified without Friday’s consent. Prior to the commencement of construction, Franchisee shall deliver a construction schedule and thereafter shall deliver monthly revisions thereof indicating construction progress.

6.04          As a condition to Friday’s approval of the final drawings, plans, and specifications, Franchisee shall deliver to Friday’s, in a form to be provided by Friday’s, a certification by a design professional of ADA compliance of the design of the Restaurant. Prior to the opening of the Restaurant, Franchisee shall deliver to Friday’s, in a form to be provided by Friday’s, a certification by the construction contractor of ADA compliance of the actual construction of the Restaurant. Franchisee shall also deliver to Friday’s, in a form to be provided by Friday’s, a certification by Franchisee of ADA compliance of both the design and actual construction of the Restaurant.

6.05          Franchisee shall obtain all zoning classifications, clearances, consents, permits and licenses required in connection with the construction of the Restaurant. Upon request, copies of such permits and licenses shall be provided to Friday’s.

6.06          Franchisee shall commence construction within six (6) months from the date of Preliminary Site Consent and shall complete construction no later than eleven (11) months thereafter and sooner if so required by the opening dates set forth in the Development Agreement. Construction shall be deemed to have been commenced upon the commencement of site work by heavy equipment or, in the event the Restaurant is to be located in existing shell space, commencement of construction-related work at the Site. Franchisee shall, within ten (10) days after commencement of construction, advise Friday’s of such commencement date. Friday’s may inspect construction at the Site. Franchisee shall make all necessary arrangements to insure Friday’s access to the Site.

6.07          Franchisee shall acquire from Friday’s or a supplier satisfying the requirements of Section 6.08 all (i) fixtures, (ii) furnishings, (iii) other products and materials required for the development of the Restaurant, and (iv) millwork for the Restaurant. Franchisee acknowledges that Friday’s may (i) profit from its sale of such items to Franchisee or (ii) receive consideration from the third party supplier with respect to Franchisee’s purchases of such items.

6.08          Franchisee’s suppliers of the items referred to in Section 6.07 shall (i) demonstrate the ability to meet the Standards; (ii) possess quality controls and capacity to supply Franchisee’s needs promptly, reliably and consistent with the Standards and the System; and (iii) not have been rejected in writing by Friday’s. Franchisee shall provide Friday’s with a current list of suppliers prior to commencement of construction of the Restaurant (current supplier lists shall thereafter be provided upon request). Franchisee shall bear or reimburse Friday’s direct expenses incurred in connection with the consent to suppliers. Friday’s may provide a list of suppliers to which Friday’s has given consent for such items.

6.09          Friday’s reserves the right to consent to, or require, limited variations from the Standards with respect to the development of other T.G.I. Friday’s ^® Restaurants in the System.

7.01          The Restaurant shall open for business (i) only with Friday’s consent and (ii) promptly after completion of appropriate training pursuant to the System (as reasonably determined by Friday’s).

7.02          Franchisee acknowledges that (i) every component of the System is material to (a) Friday’s, (b) other franchisees in the System and (c) the operation of the Restaurant; and (ii) compliance by all System franchisees with the Standards and the System is (a) fundamental to the value of the System and to this Agreement and (b) the basis for the broad public acceptance of the System and the goodwill associated therewith.

7.03          Franchisee shall employ continuously during the Term the requisite number of Restaurant Managers, as determined by Friday’s, each of whom shall have successfully completed appropriate training as described herein.

7.04          Except as otherwise provided herein, Franchisee shall:

A.         use the Restaurant premises solely for the operation of the Restaurant pursuant to the terms hereof;

B.         keep the Restaurant operating pursuant to the terms hereof for such minimum hours and days as from time to time prescribed in the Manuals or otherwise in writing except as restricted by local law;

C.         obtain and maintain all permits and licenses required for Restaurant operation and comply with all applicable federal, state or local laws and regulations relating to the Restaurant, its operation, or its business;

D.         refrain from using any juke box, video machine or other coin or token operated machine, or any film or video device to which Friday’s has not given consent;

E.         refrain from (i) offering for sale any tickets, subscriptions or chances; (ii) conducting any pools, raffles or related activities; (iii) using or allowing any gaming, dancing or live entertainment; or (iv) using or providing any form of delivery service at, from or on the Restaurant premises without Friday’s consent;

F.         permit Friday’s to enter upon the Restaurant premises at any time to inspect the Restaurant and the products and materials used by Franchisee, cooperate with such inspection and take such steps as may be necessary to correct any deficiencies discovered during such inspection (Franchisee acknowledges that Friday’s may re-inspect the Restaurant and such products or materials and revoke its consent to any product or material (or the supplier thereof) or the condition of the Restaurant should the Restaurant, products or materials fail to meet the Standards); and

G.     permit Friday’s to remove from the Restaurant samples of any inventory items (without payment) in amounts reasonably necessary for testing to determine if such samples meet the Standards. Friday’s may require Franchisee to bear the cost of such testing if Friday’s has not given consent to the supplier or if the sample fails to conform to Friday’s specifications.

7.05          Franchisee shall forward to Friday’s within five (5) days of Franchisee’s receipt thereof copies of all inspection reports, warnings, certificates and ratings issued by any governmental entity during the Term of this Agreement in connection with the conduct of the franchised business which indicate less than full compliance by Franchisee with any applicable law, rule or regulation.

7.06          Franchisee acknowledges that a material aspect of the System is the (i) breadth of palate range and (ii) quality of, and Standards relating to, food and beverage. Therefore, Franchisee shall (a) sell or offer only such products and services to which Friday’s has consented (which products and services shall be prepared, offered and served or delivered in accordance with the Standards); (b) sell or offer for sale all products and services required by Friday’s; (c) refrain from any deviation from the Standards without Friday’s consent; and (d) discontinue selling or offering any products and services to which Friday’s fails to consent, or revokes its consent in writing.

7.07          Franchisee shall purchase Friday’s proprietary spice packs from Friday’s or its designated supplier at a reasonable price established by Friday’s or such supplier. Franchisee acknowledges that Friday’s may (i) profit from its sale of spice packs to Franchisee or (ii) receive consideration from such supplier with respect to Franchisee’s purchases of spice packs.

7.08          Franchisee shall (i) repair, maintain and keep the Restaurant (and all fixtures, Furnishings, signs and equipment) in good order and condition and in compliance with the System and the Standards and (ii) as reasonably required by Friday’s, upgrade the Restaurant to the then current System and Standards. Such upgrade shall not be required more than once every three (3) years and the cost thereof shall not exceed Fifty Thousand dollars ($50,000.00) per upgrade unless at least twenty-five percent (25%) of the restaurants operated by Friday’s under the Proprietary Marks in the United States have been so upgraded in which event such cost shall not be limited. Franchisee shall undertake and complete such upgrading within a reasonable time specified by Friday’s.

7.09          Franchisee shall (i) acquire all inventory, supplies and other products and materials required for the operation and maintenance of the Restaurant solely from suppliers who (a) demonstrate the ability to meet the Standards; (b) possess quality controls and capacity to supply Franchisee’s needs promptly, reliably and consistent with the Standards and the System; and (c) Friday’s has given consent to, which consent has not been withdrawn and (ii) provide Friday’s with a current list of suppliers at least ten (10) business days prior to the Commencement Date (current supplier lists shall thereafter be provided upon request). Friday’s may provide a list of suppliers to whom Friday’s consents. Franchisee may submit to Friday’s a written request for consent to use other suppliers, or shall request the supplier itself to do so. As a condition of its consent, Friday’s shall be permitted to inspect the supplier’s facilities and take samples of the items proposed to be acquired, which shall be delivered, at Friday’s option, to Friday’s or to an independent laboratory designated by Friday’s for testing. The decision to consent to a supplier shall be solely Friday’s. Franchisee shall bear or reimburse the Territorial Expenses incurred in connection with such inspection and the expense of any laboratory testing. In addition, a charge not to exceed the actual cost of the test shall be paid by Franchisee. Friday’s reserves the right, at its option, to re-inspect the facilities and products of any such supplier and to revoke its consent upon such supplier’s failure to continue to meet any of the foregoing criteria. Franchisee shall bear or reimburse the Territorial Expenses and the cost of any tests incurred in connection with such re-inspection. Franchisee shall maintain sufficient amounts of, and shall utilize at all times, such inventory, supplies and other products or materials.

7.10          Friday’s shall provide Franchisee with one (1) set of the Manuals “on loan”. Franchisee acknowledges Friday’s ownership of the Manuals and any copyright rights in or to the Manuals. Franchisee shall observe such reasonable requirements concerning copyright notices as Friday’s requests. Replacement Manuals will be made available to Franchisee at an additional cost.

7.11          Franchisee shall operate the Restaurant in accordance with the System, the Manuals, the Standards, this Agreement, written directives (whether or not such directives are made part of the Manuals or the Standards) and other manuals prepared for use in Restaurant operations. The Manuals, the Standards, other manuals and such written directives may be revised from time to time by Friday’s.

7.12          The Manuals, other manuals, such written directives and any other Confidential Information shall be kept in a secure location in the Restaurant and returned to Friday’s immediately upon request or upon termination or expiration of this Agreement.

7.13          Franchisee shall keep the Manuals, the Standards, other manuals and such written directives up to date. In the event of any dispute as to the contents of the Manuals, the Standards, other manuals or written directives, the copy thereof maintained by Friday’s shall control.

7.14          Franchisee shall establish prices charged for products or services sold in the Restaurant.

7.15          Franchisee shall obtain such copyright licenses as may be necessary to authorize the playing of recorded music in the Restaurant. Franchisee shall change such recorded music as required from time to time in the Manuals or otherwise in writing.

7.16          Friday’s shall provide to Franchisee:

A.         access, together with other System franchisees, to new System developments. Franchisee may be required to attend meetings at its expense to discuss such developments;

B.         access to and written materials concerning improvements to the System which may include, without limitation, new products, recipes, equipment, specifications and menu formats. At Franchisee’s request, Friday’s shall provide training or demonstrations at the Restaurant of new products or other changes to the System. Franchisee shall bear or reimburse the Territorial Expenses and Wage Expenses in connection with such demonstrations; and

C.         periodic inspection and evaluation of the Restaurant as reasonably required by Friday’s.

7.17          Friday’s reserves the right to consent to, or require, limited variation from the Standards with respect to the operation of the Restaurant and other T.G.I. Friday’s ^® Restaurants in the System.

7.18          Friday’s may establish and maintain, at its option, either a series of “private” pages on the Internet Web site, described in Section 10.05, or a so-called Intranet, through either of which Friday’s, its franchisees, and their respective employees may communicate with each other and through which Friday’s may disseminate updates to the Manuals and other confidential information.

A.      Upon receipt of notice from Friday’s that an Intranet has become functional, Franchisee agrees to purchase, install and maintain the equipment, make the arrangements, and follow the procedures that Friday’s requires in the Manuals or otherwise in writing, to permit Friday’s to access, download, and retrieve information electronically, by telecommunication or other designated method (including the establishment and maintenance of Internet, Intranet, or extranet access or other means of electronic communication, as specified by Friday’s from time to time), and to permit Friday’s to upload and for Franchisee to receive and download information from Friday’s. All steps taken by Franchisee to comply with this section 7.18A shall be accomplished at Franchisee’s cost. Franchisee further agrees that Friday’s will have access to the information at the times and in the manner that Friday’s specifies from time to time. If Franchisee fails to make that information accessible to Friday’s at all times throughout the term of this Agreement, Friday’s may, in its discretion and without limitation of any other rights provided for in this Agreement, assess a reasonable monetary charge for that failure. Franchisee’s obligation to maintain connection with the Intranet will continue until this Agreement’s expiration or termination (or, if earlier, until Friday’s discontinues the Intranet). Franchisee’s failure to comply with this Section 7.18A will constitute a material breach of this Agreement on account of which Friday’s may terminate this Agreement in accordance with Section 16, unless Franchisee cures the breach within 10 days after notice from Friday’s.

B.      Friday’s will have no obligation to maintain the Intranet indefinitely, but may discontinue it at any time without liability to Franchisee.

C.         Friday’s will establish policies and procedures for the Intranet’s use. These policies, procedures and other terms of use will address issues such as (i) restrictions on the use of abusive, slanderous, or otherwise offensive language in electronic communications; (ii) restrictions on communications between or among franchisees that endorse or encourage breach of any franchisee’s franchise agreement with Friday’s; (iii) confidential treatment of materials that Friday’s transmits via the Intranet; (iv) password protocols and other security precautions; (v) grounds and procedures for Friday’s suspension or revocation of access to the Intranet by franchisees and others; and (vi) a privacy policy governing Friday’s access to and use of electronic communications that franchisees, franchisees’ employees and others post on the Intranet. Notwithstanding, subparagraph (vi) above, Franchisee acknowledges that, as administrator of the Intranet, Friday’s can technically access and view any communication that any person posts on the Intranet. Franchisee further acknowledges that the Intranet facility and all communications that are posted to it will become Friday’s property, free of any claims of privacy or privilege that Franchisee or any other person may assert.

D.       Franchisee will contribute a reasonable amount toward the cost of the Intranet’s maintenance and further development. Friday’s will set the contribution amount in January of each year and will collect the payments monthly.

E.       If Franchisee fails to pay when due any amount payable to Friday’s under this Agreement, or if Franchisee fails to comply with any policy or procedure governing the Intranet, Friday’s may temporarily suspend Franchisee’s access to all or any aspect of the Intranet (such as a chat room, bulletin board, list serve, or similar feature) until Franchisee fully cures the breach. Franchisee will not have any claim against Friday’s or any Affiliate arising from such suspension from the Intranet pursuant to this Section 7.18F. and Franchisee hereby waives any such claim it may at any time have, and releases Friday’s and its Affiliates from any liability arising therefrom.

F.         Franchisee and Friday’s shall each be responsible for protecting their own interests in relation to electronic communications. Friday’s shall have no liability to Franchisee on any basis, whether in contract, tort (including negligence) or otherwise, in respect of any error, damage, loss or omission arising from or in connection with electronic communication of information.

8.01          Neither Franchisee nor any Principal shall communicate, disclose or use any Confidential Information except as (i) permitted herein or (ii) required by law, and shall use all reasonable efforts to maintain such information as secret and confidential. Neither Franchisee nor any Principal shall, without Friday’s prior consent, copy, duplicate, record or otherwise reproduce any Confidential Information. Confidential Information may be provided to employees, agents, consultants and contractors only to the extent necessary for such parties to provide services to Franchisee. Prior to such disclosure of any Confidential Information each of such employees, agents, consultants and contractors shall (a) be advised by Franchisee of the confidential and proprietary nature of the Confidential Information and (b) agree to be bound by the terms and conditions of Section 8 of this Agreement. Notwithstanding such agreement, Franchisee shall indemnify the Friday’s Indemnitees from any damages, costs or expenses resulting from or related to any disclosure or use of Confidential Information by its agents, employees, consultants and contractors.

8.02          In the event Franchisee or Franchisee’s employees, agents, consultants, or contractors receive notice of any request, demand, or order to transfer or disclose all or any portion of the Confidential Information, Franchisee shall immediately notify Friday’s thereof, and shall fully cooperate with and assist Friday’s in prohibiting or denying any such transfer or disclosure. Should such transfer or disclosure be required by a valid, final, non-appealable court order, Franchisee shall fully cooperate with and assist Friday’s in protecting the confidentiality of the Confidential Information to the maximum extent permitted by law.

8.03          Franchisee and each Principal acknowledge Friday’s exclusive ownership of the Confidential Information and the System, and TGIFM’s exclusive ownership of, and Friday’s license with respect to, the Proprietary Marks. Neither Franchisee nor any Principal shall, directly or indirectly, contest or impair Friday’s or TGIFM’s exclusive ownership of, and/or license with respect to, the Confidential Information, the System or the Proprietary Marks.

8.04          If Franchisee develops improvements (as determined by Friday’s) to the Confidential Information, Franchisee and the Principals shall each, without additional consideration, execute such agreements and other documentation as shall be deemed necessary by Friday’s, granting exclusive ownership thereof to Friday’s. All such improvements shall be Confidential Information.

8.05          Each Principal shall execute and deliver to Friday’s a covenant in the form attached as Addendum A . Franchisee shall cause each Operator, Representative, Multi-Unit Manager, Project Manager, and Restaurant Manager and such other employees of Franchisee whom Friday’s shall designate to execute and (if requested) deliver to Friday’s a covenant in the form attached as Addendum   B . Notwithstanding the execution of such covenants, Franchisee shall indemnify the Friday’s Indemnitees from any damages, costs or expenses resulting from or related to any disclosure or use of Confidential Information by any Principal, Operator, Representative, Multi-Unit Manager, Project Manager or Restaurant Manager.

8.06          Immediately upon any termination or expiration hereof, Franchisee and each Principal shall return the Confidential Information including, without limitation, that portion of the Confidential Information which consists of analyses, compilations, studies or other documents containing or referring to any part of the Confidential Information, prepared by Franchisee or such Principal, their agents, representatives or employees, and all copies thereof.

9.01          Friday’s grants to Franchisee the non-exclusive right and license to use the Proprietary Marks (subject to the terms hereof) during the Term in accordance with the System, the Standards and as prescribed by Friday’s from time to time. In connection therewith, Franchisee agrees that:

A.         Franchisee shall use (i) only such of the Proprietary Marks designated by Friday’s and (ii) such marks only in the manner specified by Friday’s in writing (including in compliance with Section 9.01G. below). Any other use of any Proprietary Mark shall constitute an infringement of Friday’s and TGIFM’s rights therein.

B.         Franchisee shall use the Proprietary Marks only (i) for the operation of the Restaurant; (ii) at the Site or in advertising related to the Restaurant; and (iii) during the Term. Franchisee shall cease (a) any unauthorized use of any Proprietary Mark upon demand and (b) all use upon the termination or expiration hereof.

C.         Friday’s reserves the right to substitute different trade names, service marks, trademarks, logos, trade dress, emblems, symbols and indicia of origin for the Proprietary Marks for use in identifying the System and the business operated thereunder.

D.         During the Term, Franchisee shall identify itself as a “licensed franchisee” of Friday’s (i) in conjunction with any use of the Proprietary Marks including, without limitation, invoices, order forms, receipts, contracts, stationary and business cards; (ii) in a notice of such content and form and at conspicuous locations in the Restaurant as Friday’s may designate in writing; and (iii) on any authorized delivery vehicles.

E.         Franchisee shall not assign, pledge, mortgage or otherwise encumber its rights to use any of the Proprietary Marks.

F.         Franchisee shall not use any of the Proprietary Marks as part of its corporate or other name. Franchisee shall comply with Friday’s instructions, and shall execute any documents deemed necessary by Friday’s or its counsel, in filing and maintaining any requisite trade name or fictitious name registrations in connection with the Proprietary Marks.

G.         Franchisee may not cause or allow all or any recognizable part of the Proprietary Marks to be used or displayed as all or part of an e-mail address, Internet domain name, URL or metatag, or in connection with any Internet home page, web site, or other Internet-related activity without Friday’s express prior written consent, and then only in the manner and in accordance with the procedures, standards and specifications that Friday’s establishes.

H.         Franchisee shall immediately notify Friday’s of any (i) infringement of the Proprietary Marks or challenge to the use of any thereof or (ii) claim by any person of any rights in or to any of the Proprietary Marks. Franchisee and each Principal shall not communicate with any person except Friday’s and Friday’s counsel in connection with any such infringement, challenge or claim. Friday’s may take such action as it deems appropriate, and shall exclusively control any litigation or proceeding arising from any infringement, challenge, claim or otherwise relating to any of the Proprietary Marks. Franchisee shall execute any and all instruments and documents, render such assistance and do such acts and things as may, in the opinion of Friday’s or its counsel, be necessary or advisable in any such litigation or proceeding or to otherwise protect or maintain Friday’s or TGIFM’s rights and interest in the Proprietary Marks.

I.         Neither Franchisee nor any Principal shall, directly or indirectly, apply for, register, attempt to obtain or obtain control of the Proprietary Marks or any marks or other indicia of ownership or origin which resemble, or are deceptively or confusingly similar to, the Proprietary Marks, in any country or political sub-division thereof. Neither Franchisee nor any Principal shall interfere with Friday’s or TGIFM’s efforts to obtain registration or ownership of any name, trademark, service mark or other identifying name anywhere in the world.

J.         Franchisee shall cooperate with Friday’s to prove the continuous and effective use of the Proprietary Marks, including, without limitation, in connection with any registration or any renewal thereof.

9.02          Franchisee and each Principal agree and acknowledge that:

A.         Friday’s or TGIFM is the exclusive owner of all right, title and interest in and to the Proprietary Marks and the goodwill associated therewith;

B.         the Proprietary Marks identify Friday’s and TGIFM as the source of origin of goods and services provided under such marks and the System;

C.         neither Franchisee nor any Principal shall directly or indirectly contest Friday’s or TGIFM’s ownership, or the validity, of the Proprietary Marks;

D.         Franchisee does not have, and shall not acquire by use pursuant to this Agreement, any ownership or other interest in or to the Proprietary Marks, except the right and license granted herein, subject in all respects to the terms hereof;

E.         any and all goodwill arising from Franchisee’s use of the Proprietary Marks shall inure exclusively to Friday’s or TGIFM without compensation; and

F.         Franchisee’s right and license to use the Proprietary Marks is non-exclusive and, subject to Section 2 hereof, Friday’s or TGIFM has and retains all rights relating to the Proprietary Marks and the use thereof including, without limitation, the right to:

(1)         use and grant other licenses to use the Proprietary Marks;

(2)         develop and establish Other Concepts using the Proprietary Marks or other names or marks and to grant licenses thereto without providing any rights therein to Franchisee; and

(3)         engage, directly or indirectly, at wholesale, retail or otherwise, in (i) the production, distribution, license and/or sale of products and services under the Proprietary Marks or other names or marks and (ii) the use, in connection with such production, distribution and sale, of any and all trademarks, trade names, service marks, logos, insignia, trade dress, slogans, emblems, symbols, designs and other identifying characteristics as may be developed or used from time to time by Friday’s.

(4)       establish an Internet Web site that provides information about T.G.I. Friday’s Restaurants generally, even though accessible by persons in the Restricted Area. Friday’s has sole discretion and control over the Web site design and contents, which may include Internet advertising as described in Section 10.05. The Web site may include a series of interior pages that identify the locations of T.G.I. Friday’s Restaurants by, among other things, geographic region, address, and telephone number. In the event Franchisee is in breach of this Agreement, or any other agreement with Friday’s or its Affiliates, Friday’s may remove all references to Franchisee and the Restaurant from the Web site until such breach is cured. Friday’s may establish and enforce reasonable rules and regulations, and impose reasonable fees, relating to the Web site, and may amend them from time to time at Friday’s option. Those rules and regulations may be included in the Manual or may be separately communicated to Franchisee. The rules and regulations may affect, among other things, content, creation, customer service, privacy and access. At Friday’s option, Franchisee will promptly participate in and pay all applicable fees relating to the Web site in accordance with the rules and regulations.

10.01          Franchisee recognizes (i) the value of advertising and (ii) that standardized advertising programs enhance the goodwill and public image of the System.

A.         Franchisee shall expend not less than two percent (2%) of Gross Sales, measured over continuing six (6) month periods, for local advertising. Franchisee’s local advertising may utilize media to which Friday’s has granted consent including:

B.         Franchisee, at its expense, shall obtain listings in bold type in the white pages directory of the local public telephone company under the names “Friday’s ^® ” and “T.G.I. Friday’s ^® ”.

C.         Franchisee’s expenditures made for participation in (i) advertising and promotional programs described in Section 10.01.B and 10.03; (ii) Friday’s national and/or regional advertising funds described in Section 10.02.A (to the extent in excess of two percent (2%) of monthly Gross Sales); and (iii) the cost of promotional food and beverages given to customers (in an amount not to exceed thirty percent (30%) of the retail price thereof), shall be credited to Franchisee’s local advertising obligations described in Section 10.01.A. Friday’s may audit Franchisee’s books and records to confirm local advertising expenditures.

10.02         A.         Friday’s shall have the right to establish national and/or regional advertising funds. If established, Franchisee agrees to pay Friday’s on a monthly basis, in addition to any payments required under Section 10.01.A, a sum to be determined by Friday’s, which sum for any national or regional fund shall not exceed four percent (4%) of monthly Gross Sales. If both regional and national advertising funds are established, Franchisee’s total contribution shall not exceed four percent (4%) of monthly Gross Sales. All contributions to national or regional advertising funds in excess of two percent (2%) of Gross Sales shall be credited to Franchisee’s local advertising obligations described in Section 10.01.A.

B.         Friday’s or its designee shall (i) administer such funds and (ii) direct all national and regional advertising programs and shall have absolute control to consent to or reject all creative concepts, materials and media and the placement and allocation thereof. Friday’s shall not be a fiduciary to Franchisee with respect to the management of such funds. Friday’s and its designees undertake no obligation to (a) make expenditures in the area where the Restaurant is located which are