EXHIBIT 10.25
BUFFALO WILD WINGS(R) FRANCHISE AGREEMENT
BETWEEN
BUFFALO WILD WINGS INTERNATIONAL, INC.
1600 UTICA AVENUE, SUITE 700
MINNEAPOLIS, MN 55416
AND
____________________________________________
____________________________________________
NAME OF FRANCHISEE(S)
____________________________________________
STREET ADDRESS
____________________________________________
CITY STATE ZIP CODE
____________________________________________
PHONE NUMBER
AUTHORIZED LOCATION:
____________________________________________
STREET
____________________________________________
CITY
STATE
ZIP CODE
EFFECTIVE DATE:
____________________________________________
(To be completed by us)
CONFIDENTIAL
(C) 2006 Buffalo Wild Wings International, Inc.
<PAGE>
<TABLE>
<CAPTION>
--TABLE OF
CONTENTS--
BUFFALO WILD WINGS(R) FRANCHISE AGREEMENT
SECTION
PAGE
<S>
<C>
1.
DEFINITIONS..............................................................................................1
2.
GRANT OF
LICENSE.........................................................................................2
3.
TRADEMARK STANDARDS AND
REQUIREMENTS.....................................................................4
4. TERM
AND
RENEWAL.........................................................................................5
5.
FACILITY STANDARDS AND
MAINTENANCE.......................................................................6
6.
PRODUCTS AND OPERATIONS STANDARDS AND
REQUIREMENTS......................................................11
7.
PERSONNEL AND SUPERVISION
STANDARDS.....................................................................15
8.
ADVERTISING.............................................................................................16
9.
FEES, REPORTING AND AUDIT
RIGHTS........................................................................18
10. YOUR OTHER
OBLIGATIONS; NONCOMPETE
COVENANTS............................................................21
11. TRANSFER
OF
FRANCHISE...................................................................................23
12. DISPUTE
RESOLUTION......................................................................................27
13. DEFAULT
AND
TERMINATION.................................................................................28
14. POST-TERM
OBLIGATIONS...................................................................................29
15. GENERAL
PROVISIONS......................................................................................31
APPENDICES
A.
Trademarks
B.
Designated Area
C.
Addendum to Lease
D.
Electronic Transfer of Funds Authorization
E. Gift
Cards Participation Agreement
F.
Enrollment Form
and Portal Terms and Conditions
</TABLE>
<PAGE>
BUFFALO WILD WINGS(R) FRANCHISE AGREEMENT
This Franchise
Agreement is made this
____ day of
____________, 200_
between
BUFFALO WILD WINGS
INTERNATIONAL, INC.,
an Ohio corporation with its principal
business located at 1600 Utica Avenue South, Suite 700,
Minneapolis,
Minnesota
55416 ("we"
or
"us"),
and
__________________________, a(n)
______________________ whose
principal business
address is
__________________________________________ ("franchisee" or "you"). If the
franchisee is a corporation, partnership, limited liability company or other
legal entity, certain provisions to this Agreement also apply to
its owners.
RECITALS
A. Our
parent company has developed a unique system for video
entertainment
oriented, fast casual
restaurants
that feature
chicken wings,
sandwiches, unique food service and other products, beverages and
services using
certain standards and specifications;
B. Many
of the food and beverage products are prepared according
to specified recipes and procedures, some of which include proprietary sauces
and mixes.
C. Our
parent company owns the BUFFALO WILD
WINGS(R) Trademark
and other trademarks
used in connection with the operation of a BUFFALO
WILD
WINGS restaurant;
D. Our
parent company has granted to us the
right to sublicense
the right to develop and operate BUFFALO WILD WINGS restaurants;
and
E. You
desire to develop and operate a BUFFALO WILD WINGS
restaurant and we, in
reliance on your
representations,
have approved your
franchise application.
In consideration
of the foregoing and the mutual covenants and
consideration below, you and we agree as follows:
DEFINITIONS
1. For
purposes of this Agreement, the terms below have
the following definitions:
A. "Control Person" means the individual who has the authority
to, and does in fact,
actively direct your business affairs in regard
to the Restaurant, is responsible for overseeing the general
management
of the day-to-day
operations of the
Restaurant
and has authority
to
sign on your behalf on all contracts and commercial documents. The
Control Person is identified on the Ownership and Management Addendum
attached to this Agreement.
B. "Gross Sales" includes the total revenues and receipts from
the sale of all products, services and merchandise sold in your
Restaurant whether under any of the Trademarks or otherwise,
including
any cover charges
or fees, vending or similar activities in your
Restaurant or on its
premises as well as all license and use fees.
Gross Sales excludes sales taxes.
C. "Menu Items" means the chicken wings, sandwiches and other
products and beverages
prepared according to our specified recipes and
procedures, as we may modify and change them from time to time.
D.
"Principal
Owner" means any person or entity who,
now or
hereafter, directly or indirectly owns a 10% or greater interest in
the
franchisee when the
franchisee is a
corporation,
limited liability
company, partnership,
or a similar entity. However, if we are entering
into this Agreement totally or partially based on the financial
qualifications,
experience, skills or managerial qualifications of any
person or entity who directly or indirectly owns less than a 10%
interest in the franchisee, we have the right to designate
that person
or entity as a Principal Owner for all purposes under this
Agreement.
In addition, if the
franchisee
is a partnership entity, then each
person or entity who, now or hereafter is or becomes a general
partner
is a Principal Owner,
regardless of the percentage ownership interest.
If the franchisee
is one or more
individuals,
each individual is a
Principal Owner of the
franchisee. Each
franchisee must have at least
one Principal Owner.
Your Principal Owner(s) are identified on the
Ownership and Management Addendum attached to this Agreement. Every
time there is a change in the persons who are your Principal Owners,
you must, within 10 days from the date of each such change,
update the
Ownership and
Management
Addendum. As used in this Agreement, any
reference to Principal Owner includes all Principal Owners.
1
<PAGE>
E. "Restaurant"
means the BUFFALO WILD
WINGS Restaurant
you
develop and operate pursuant to this Agreement.
F. "System"
means the BUFFALO WILD WINGS System, which
consists of distinctive food and beverage products prepared according
to special and
confidential recipes
and formulas with unique storage,
preparation, service and delivery procedures and techniques,
offered in
a setting of distinctive exterior and interior layout, design and
color
scheme, signage,
furnishings
and materials and using certain
distinctive types of
facilities,
equipment,
supplies, ingredients,
business techniques,
methods
and procedures together with sales
promotion programs,
all of which we may modify and change from time to
time.
G. "Trademarks"
means the BUFFALO WILD
WINGS Trademark
and
Service Mark
that have been registered in the United States and
elsewhere and the
trademarks, service
marks and trade names set forth
on Appendix A, as we
may modify and change from time to time, and the
trade dress and other commercial symbols used in the Restaurant.
Trade
dress includes the designs, color schemes and image we authorize
you to
use in the operation of the Restaurant from time to time.
H. "Unit General Manager" means the individual who (i)
personally invests his
or her full time and
attention and devotes his
or her best
efforts to the on-premises general management of the
day-to-day
operations of
the Restaurant, (ii) meets our prior
restaurant or retail management experience requirements, and (iii)
does
not participate in the
active operation or
management of any business
other than the
Restaurant. The Unit
General Manager must be appointed
at least 60 days prior to the Restaurant opening, fully trained 20
days
prior to the
Restaurant opening and
is or will be
identified on the
Ownership and Management Addendum attached to this Agreement.
GRANT OF LICENSE
2. The
following provisions
control with respect to the license
granted hereunder:
A. Authorized Location. We grant to you the right and
license
to establish and operate a retail Restaurant identified by the BUFFALO
WILD WINGS Trademarks
or such other marks as we may direct, to be
located
at
a
location
__________________________________________________________
______________________
or a location to be
designated within 90
days
from the date of this Agreement (the "Authorized Location"). When a
location has been
designated by you and approved by us, it will become
part of this subparagraph 2.A as if originally stated. If an
Authorized
Location is not
designated
by you and
approved by us within
90 days
from the date of this
Agreement, we have the
right to declare this
Agreement null and void without the return of any Initial Franchise
Fee
or other amounts paid
to us. You accept the license and undertake the
obligation to operate the Restaurant at the Authorized Location using
the Trademarks
and the System in compliance with the terms and
conditions of this Agreement.
B. Designated Area. You must locate and operate the Restaurant
at an Authorized
Location within the area described in Appendix B (the
"Designated Area").
We and our affiliates
will not locate and operate
or grant to anyone
else a franchise
to locate and
operate a BUFFALO
WILD WINGS
restaurant
within the Designated Area so long as this
Agreement is in effect, except as provided in subparagraph
2.D. You do
not have any right to sublicense or subfranchise within or outside of
the Designated Area
and do not have the right to operate more than one
Restaurant within the Designated Area.
C. Opening.
You agree that the
Restaurant
will be open and
operating in
accordance with the
requirements
of subparagraph 5.A
within (i) 270 days from the date of this Agreement if the Restaurant
is located within an
end cap, shopping
mall, Special Site or other
similar location,
or (ii) 365 days from
the date of this Agreement if
the Restaurant is a
free-standing
building, unless in
either case we
authorize in
writing an extension of time. Notwithstanding the
foregoing, if you are
entering this Agreement pursuant to an Area
Development Agreement
executed between you and us, you agree to
open
the Restaurant by the date stated in the Area Development
Agreement. If
you fail to have your Restaurant open and in operation according to
the
provisions of
this subparagraph 2.C, we will have the right to
terminate this
Agreement without opportunity to cure pursuant to
subparagraph 13.B.2.
2
<PAGE>
D. Nonexclusivity;
Our Reservation of
Rights. The license is
limited to the right to develop and operate one Restaurant at the
Authorized Location
located in the Designated Area, and does not
include (i) any right to sell products and Menu Items identified by
the
Trademarks at any location other than the Authorized Location, except
for authorized
catering and delivery services as noted in subparagraph
2.E, or through any other channels or methods of distribution,
including
the internet (or any other existing or future form of
electronic commerce),
(ii) any right to sell
products and Menu
Items
identified by the
Trademarks
to any person or entity for resale or
further distribution,
or (iii) any right to exclude, control or impose
conditions on
our development of future franchised, company or
affiliate owned
restaurants
at any time or at any location. You
acknowledge that the
consumer service area or trade area of another
BUFFALO WILD WINGS restaurant may overlap with your Designated
Area.
You also acknowledge and agree that we and our affiliates have
the right to
operate and franchise others the right to operate
restaurants or any
other business
within and outside the
Designated
Area under trademarks
other than the BUFFALO
WILD WINGS
Trademarks,
without compensation
to any franchisee,
except that our operation of,
or association or affiliation with, restaurants (through
franchising or
otherwise) in the Designated Area that compete with BUFFALO
WILD WINGS
restaurants in the video entertainment oriented, fast casual
restaurant
segment will only occur through some form of merger or acquisition
with
an existing restaurant
chain (except as otherwise provided for in this
subparagraph). Outside
of the Designated
Area, we and our
affiliates
have the
right to grant other franchises or develop and operate company
or affiliate owned BUFFALO WILD WINGS restaurants and offer, sell or
distribute any products or services associated with the System (now
or
in the future) under the Trademarks or any other
trademarks,
service
marks or trade names or through any distribution channel or method,
all
without compensation to any franchisee.
We and our
affiliates
have the right to offer, sell or
distribute, within
and outside the Designated Area, any frozen,
pre-packaged items or
other products or services associated with the
System (now or in the future) or identified by the Trademarks, or any
other trademarks,
service marks or trade names, except for Prohibited
Items (as defined below), through any distribution channels or
methods,
without compensation
to any franchisee. The
distribution channels
or
methods include, without limitation, grocery stores, club stores,
convenience stores,
wholesale,
hospitals,
clinics,
health care
facilities, business
or industry locations (e.g. manufacturing site,
office building), military installations, military commissaries or the
internet (or any other existing or future form of electronic
commerce).
The Prohibited Items
are the following
items that we will not sell in
the Designated Area through other distribution channels or methods:
any
retail food service Menu Items that are cooked or prepared to be
served
to the end user or
customer for
consumption
at the retail
location
(unless sold
at the limited seating facilities referenced in
subparagraph (i) of the paragraph above). For example, chicken wings
cooked and served to customers at a grocery store or convenience
store
would be a Prohibited
Item, but the sale of frozen
or pre-packaged
chicken wings at a
grocery store or convenience store would be a
permitted form of distribution in the Designated Area.
You acknowledge and
agree that certain
locations within
and
outside the Designated
Area are by their
nature unique and separate in
character from
sites generally developed as BUFFALO WILD WINGS
restaurants. As a
result, you agree that the following locations
("Special Sites") are excluded from the Designated Area and we have
the
right to develop or franchise such locations: (1) military bases; (2)
public transportation facilities; (3) sports facilities, including
race
tracks; (4) student
unions or other
similar buildings on college or
university campuses;
(5) amusement and
theme parks; and (6) community
and special events.
In addition, you
acknowledge and agree that, subject to your
right of first refusal as set forth below, we and our affiliates have
the right to operate or franchise within and outside the Designated
Area one or more
facilities selling,
for dine in or take
out, all or
some of the Menu Items, using the Trademarks or any other
trademarks,
service marks or trade names, without compensation to any
franchisee,
provided, however, that such facilities shall not have an interior
area
larger than 2,400 square feet and shall not have seating capacity for
more than 48 people
("Limited Seating
Facilities").
If we develop a
model for a Limited Seating Facility and determine that your
Designated
Territory is an appropriate market for such a facility, we will
provide
to you a written offer
("Offer") specifying
the terms and
conditions
for your development of the Limited Seating Facility. You will have 90
days following
your receipt of the Offer to accept the Offer by
delivering written
notice to us of your acceptance, provided that you
are not in default under this Agreement or any other Agreement with us
or our affiliates.
If you do not provide
written notice to us
within
the time period or if you are in default under this Agreement or any
other agreement with us or our affiliates, you will lose the right to
develop the Limited
Seating Facility
and we may develop or
franchise
others to develop the Limited Seating Facility within your
Designated
Area. You acknowledge
and agree that if you
accept the Offer, we
may
require you to submit a full application, pay an initial fee and
sign a
new form of franchise agreement.
3
<PAGE>
E. Catering and
Delivery. You may not
engage in catering and
delivery services and
activities
within or outside of
the Designated
Area, unless we
authorize you in writing, as further described in
subparagraph 6.L. We
and our affiliate
companies will not engage in
catering and delivery
services and activities in the Designated Area;
however, we have no obligation to enforce similar covenants against
any
other franchisee.
TRADEMARK STANDARDS AND REQUIREMENTS
3. You
acknowledge
and agree that the
Trademarks are our parent
company's property and
it has licensed the use of the Trademarks to us with the
right to sublicense to others. You further acknowledge that your right to use
the Trademarks is specifically conditioned upon the following:
A. Trademark
Ownership.
The Trademarks are our parent
company's valuable
property, and it is the owner of all right,
title
and interest in and to the Trademarks and all past, present or future
goodwill of
the Restaurant and of the business conducted at the
Authorized Location
that is associated
with or attributable to the
Trademarks. Your
use of the Trademarks will inure to our parent
company's benefit.
You may not, during or after the term of this
Agreement, engage in
any conduct
directly or
indirectly
that would
infringe upon, harm or
contest our parent
company's rights in
any of
the Trademarks
or the goodwill associated with the Trademarks,
including any use of the Trademarks in a derogatory, negative, or
other
inappropriate manner
in any media,
including but not limited to print
or electronic media.
B. Trademark
Use. You may not use,
or permit the use of, any
trademarks, trade
names or service marks in connection with the
Restaurant except
those set forth in Appendix A or except as we
otherwise direct
in writing. You may use the Trademarks only in
connection with such
products and services as we specify and
only in
the form and manner we prescribe in writing. You must comply with all
trademark, trade name and service mark notice marking requirements.
You
may use the Trademarks
only in association
with products and services
approved by us and that meet our standards or requirements with
respect
to quality, mode and condition of storage, production, preparation and
sale, and portion and packaging.
C.
Restaurant
Identification.
You must use the name
BUFFALO
WILD WINGS GRILL & BAR as the trade name of the Restaurant and you may
not use any other mark or words to identify the Restaurant
without our
prior written consent.
You may not use any of the words BUFFALO, WILD
or WINGS or any of the
other Trademarks as part of the name of your
corporation,
partnership, limited
liability company or
other similar
entity. You may use
the Trademarks on various materials, such as
business cards,
stationery
and checks,
provided you (i)
accurately
depict the Trademarks on the materials as we prescribe,
(ii) include a
statement on
the materials indicating that the business is
independently owned
and operated by you, (iii) do not use the
Trademarks in
connection
with any other
trademarks,
trade names or
service marks unless we specifically approve in writing prior to
such
use, and (iv) make
available to us, upon
our request,
a copy of any
materials depicting
the Trademarks. You
must post a prominent sign in
the Restaurant
identifying you as a BUFFALO WILD WINGS franchisee in a
format we deem reasonably acceptable, including an acknowledgment
that
you independently
own and operate the
Restaurant and that the BUFFALO
WILD WINGS Trademark
is owned by our parent
company and your use is
under a license we have issued to you. All your internal and external
signs must comply at all times with our outdoor/indoor guidelines and
practices, as they are modified from time to time.
4
<PAGE>
D. Litigation.
In the event any
person or entity
improperly
uses or infringes the
Trademarks or challenges your use or our use or
ownership of the Trademarks, we will control all litigation and we
have
the right to determine
whether suit will be
instituted, prosecuted
or
settled, the terms of
settlement and whether
any other action will be
taken. You must
promptly notify us of
any such use or infringement of
which you are aware or any challenge or claim arising out of your use
of any Trademark. You must take reasonable steps, without
compensation,
to assist us with any action we undertake. We will be responsible
for
our fees and expenses
with any such action,
unless the
challenge or
claim results from
your misuse of the
Trademarks in violation of this
Agreement, in
which case you must reimburse us for our fees and
expenses.
E. Changes. You may
not make any changes or substitutions to
the Trademarks
unless we direct in
writing. We reserve the right to
change the Trademarks at any time. Upon receipt of our notice to
change
the Trademarks, you must cease using the former Trademarks and
commence
using the changed
Trademarks, at your
expense. If the
changes to the
Trademarks require
substantial
remodeling due to a
modernization in
trade dress, the
expenditure
will be considered toward the Maximum
Modernization Amount
described in subparagraph 5.E. If the changes to
the Trademarks result
in a required change
to outdoor signage,
such
changes will be subject to the provisions in 5.F.
TERM AND RENEWAL
4. The
following provisions control with respect to the term and
renewal of this Agreement:
A. Term. The initial term of this Agreement is 20 years,
unless this Agreement is sooner terminated in accordance with
Paragraph
13. The initial term
commences upon the
Effective Date (as defined in
subparagraph 15.S) of
this Agreement. We may
extend this initial term
in writing for a limited period of time not to exceed 6
months to take
into account
the term of any applicable lease for the Authorized
Location.
B. Renewal Term and Conditions of Renewal. You may renew your
license for two renewal terms, (the first renewal term is 10 years;
the
second renewal
term is 5 years),
provided that with respect to each
renewal: (i) you have given us written notice of your decision to
renew
at least 6 months but
not more than 12 months prior to the end of the
expiring term;
(ii) you sign our then-current form of franchise
agreement
(modified to
reflect no additional renewal term upon
expiration and
other modifications to reflect that the agreement
relates to the grant of a renewal), the terms of which may differ
from
this Agreement,
including higher fees and a modification to the
Designated Area (although in no event will the revised Designated Area
have a residential
population of the lesser of approximately 30,000 to
40,000 or the
residential population
that existed as of the Effective
Date); (iii) you have
complied with the provisions of subparagraph 5.E
regarding
modernization
and you perform any further items of
modernization and/or
replacement
of the building, premises, trade
dress, equipment and grounds as may be necessary for your
Restaurant to
conform to the
standards then
applicable
to new BUFFALO
WILD WINGS
restaurants,
regardless of the
cost of such modernizations and/or
replacements, unless
we determine that you should relocate your
Restaurant because
your Authorized Location no longer meets our
then-current site
criteria, in which
case you must comply with the 90
and 270 day relocation
requirements of subparagraph 5.D; (iv) you are
not in default of this Agreement or any other agreement pertaining to
the franchise
granted, have satisfied all monetary and material
obligations on a timely basis during the term and are in good
standing;
(v) if leasing the
Restaurant premises
(and not subject to relocation
under (iii)
above), you have renewed the lease and have provided
written proof of your
ability to remain in
possession of the premises
throughout the renewal
period; (vi) you
comply with our
then-current
training requirements;
(vii) you pay us, at least 30 days prior to the
end of the expiring
term, a renewal fee in the amount of $20,000; and
(viii) you and your Principal Owners and guarantors execute a general
release of claims in a form we prescribe.
C. Relocation Upon Renewal. If, as a condition of renewal,
we
require you to
relocate your Restaurant pursuant to subparagraph
4.B(iii) above,
you may renew your
license for two renewal terms (the
first renewal
term for 15 years
and the second renewal term for 5
years), provided
that with respect to each renewal, you meet all
conditions stated in subparagraph 4.B.
5
<PAGE>
FACILITY STANDARDS AND MAINTENANCE
5. You
acknowledge and agree that we have the right to establish,
from time to time,
quality standards
regarding the business operations of
BUFFALO WILD WINGS
restaurants and stores to protect the distinction, goodwill
and uniformity
symbolized by the Trademarks and the System. Accordingly, you
agree to maintain
and comply with our quality standards and agree to the
following terms and conditions:
A. Restaurant
Facility;
Site
Under Control. You are
responsible for
purchasing
or leasing a site that meets our site
selection criteria.
You must obtain our
written consent to the
site.
Prior to granting our consent to a site, you must have the site
evaluated by the
proprietary site
evaluator software that has been
developed by GeoVue,
Inc. You must
execute the
Enrollment
Form and
Portal Terms and Conditions attached as Appendix F and pay GeoVue,
Inc.
an evaluation fee of $400 per site evaluated, but you must pay for the
rights to have at
least 3 sites
evaluated and these fees are non
refundable.
If your authorized location is located in an area
with a
lower population
or smaller
trade area,
we may reduce the
number of
required site evaluations. You may not use the Restaurant
premises or
Authorized Location
for any purpose other than the operation of a
BUFFALO WILD WINGS
Restaurant during the
term of this
Agreement. We
make no guarantees
concerning the success of the Restaurant located on
any site to which we consent.
You may not open your
Restaurant for
business until we
have
notified you in
writing that you have satisfied your pre-opening
obligations as set
forth in subparagraphs 5.A and 5.B and we have
approved
your opening date. We are not responsible or liable for any of
your pre-opening
obligations,
losses or expenses you
might incur for
your failure to comply with these obligations or your failure to open
by a particular
date. We also are entitled to
injunctive
relief or
specific performance under subparagraph 12.C for your failure to
comply
with your obligations.
In the event that you plan to enter into any type of lease for
the Restaurant
premises, you and your landlord must sign the Lease
Addendum attached
as Appendix
C. We recommend you submit the Lease
Addendum to the
landlord at the
beginning of your lease review and
negotiation, although
the terms of the Lease Addendum may not be
negotiated without our
prior approval. If the
landlord requires us to
negotiate the Lease Addendum, we reserve the right to charge you a
fee,
which will not exceed our actual costs associated with the
negotiation.
You must provide us a
copy of the executed
lease and Lease
Addendum
within 5 days of its
execution.
We have no responsibility for the
lease; it is your sole responsibility to evaluate, negotiate and enter
into the lease for the Restaurant premises.
You must execute,
and provide us an executed copy of your
lease (including
an executed copy of the Lease Addendum) or the
purchase agreement
for the selected and approved site for your
Restaurant within 120 days from the date of execution of this
Agreement
if the Restaurant will be in a free standing location or within 90
days
from the execution of
this Agreement if the
selected and consented to
site for the Restaurant is in a non-free standing location. If you
fail
to have your "site under control" (execute the lease or the purchase
agreement within the periods set forth in this subparagraph), we will
have the right to terminate this Agreement without opportunity to cure
pursuant to subparagraph 13.B.2.
B. Construction;
Future Alteration. You must construct and
equip the Restaurant
in strict accordance
with our current
approved
specifications and
standards pertaining to equipment, inventory,
signage, fixtures,
furnishings,
accessory features
(including sports
memorabilia) and
design and layout of the building. You may not
commence construction
of the Restaurant until you have received our
written consent to
your building
plans. If your Restaurant is not
constructed strictly
according to the
previously consented
building
plans, we will not approve your Restaurant for opening.
You will have
30 days from the date we deny our approval for opening your
Restaurant
to correct all the
construction problems
so that your
Restaurant is
strictly constructed
according to the consented building plans. If you
fail to correct the problems within the 30 day period we may
immediately terminate
this Agreement pursuant to subparagraph 13.B.2.
If the Restaurant
opening is delayed for
the foregoing reasons,
you
will be responsible for any losses and costs related to such
delay.
Without limiting the
generality of the prior paragraph, you
must promptly
after obtaining possession of the site for the
Restaurant: (i)
retain the services of one of our designated
architects; and (ii)
retain the services of a general contractor and
6
<PAGE>
audio/visual equipment providers and installers, each of whom must
have
successfully gone
through our
application process or
otherwise been
approved by us in writing (although if this Agreement is for your
first
BUFFALO WILD WINGS
restaurant or if you or any of your affiliates have
failed to timely open
any other BUFFALO WILD WINGS restaurant in
accordance with the terms of any franchise agreement with us, you must
use one of our designated general contractors); (iii) have prepared
and
submitted for our approval a site survey and basic architectural plans
and specifications
(not for construction)
consistent with our general
atmosphere, image,
color scheme and ambience requirements as set forth
from time to time in the manuals for a BUFFALO WILD WINGS restaurant
(including
requirements for dimensions, exterior design, materials,
interior design and layout, equipment, fixtures, furniture, signs and
decorating); (iv)
purchase or lease and then, in the construction of
the Restaurant, use
only the approved building materials, equipment,
fixtures, audio
visual equipment, furniture and signs; (v) complete the
construction and/or remodeling, equipment, fixtures, furniture and
sign
installation and
decorating
of the Restaurant in full and strict
compliance with plans and specifications we approve and all
applicable
ordinances,
building codes
and permit requirements without any
unauthorized alterations; (vi) obtain all customary
contractors' sworn
statements and partial
and final waiver obtain all necessary permits,
licenses and
architectural
seals and comply
with applicable legal
requirements relating to the building, signs, equipment and premises,
including, but not limited to, the Americans With Disabilities Act;
and
(vii) obtain and
maintain all required zoning changes, building,
utility, health,
sanitation, liquor and
sign permits and licenses and
any other required
permits and licenses (if this Agreement is for your
first BUFFALO WILD
WINGS restaurant
or if in any previous
franchise
agreement executed between you or any of your affiliates and us,
you or
any of your affiliates
have not met your
obligations
regarding the
build out of any
previous BUFFALO
WILD WINGS restaurant, you must
retain the services of a company specialized in assisting restaurant
operators during the construction process to assist you in
submitting,
processing, monitoring
and obtaining in a
timely manner all necessary
construction
documents,
licenses and
permits and to advise you
throughout the
construction
of your Restaurant). It is your
responsibility to comply with the foregoing conditions.
If this is not your first BUFFALO WILD WINGS restaurant and
you have opened all others on a timely basis, you may request that we
approve a general contractor that is not on our current list of
approved suppliers.
You must pay us a $5,000 processing fee to process
your request to qualify the general contractor. You, your
affiliates or
your Principal
Owners, or any person related to, or any entity
controlled by your Principal Owners may not be your general
contractor
unless you have
requested our approval, you have paid the $5,000
qualification processing fee, and we have approved your request. If
you
have signed an Area
Development Agreement
for 8 or more
restaurants,
you also may request
approval of an architect that is not on our list
of approved suppliers.
The architect will be
required to attend a two
day
training session at our Minneapolis headquarters, at a cost of
$7,500.
If you
want
to
use an audio/visual
equipment
provider/installer who
is not on our list of approved suppliers
(whether it is for your first or any subsequent restaurant), you must
pay us or our designated third party $250 for any audio/visual
equipment provider/installer that you submit for our qualification.
You
also must pay a bid
review fee of $150 and a final inspection fee of
$500 for audio/visual
related services (in addition to travel expenses
of the inspector),
regardless of whether
you use a newly
approved or
previously approved audio/visual provider and installer.
Your general
contractor may
not be your audio/visual equipment provider and
installer.
Any change
to the building plans or any replacement,
reconstruction,
addition or modification in the building, interior or
exterior decor or
image, equipment or
signage of the Restaurant to be
made after our consent
is granted for initial
plans, whether at the
request of you or of us, must be made in accordance with
specifications
that have received our prior written consent. You may not commence
such
replacement,
reconstruction,
addition or modification until you have
received our written consent to your revised plans.
You must begin substantial construction (site work, utility
infrastructure and
building erection) of
the Restaurant at
least 150
days before the deadline to open the Restaurant if the Restaurant
will
be in a free standing location or at least 120 days before the
deadline
to open the Restaurant if the Restaurant will be in a non-free
standing
location. You must
provide us weekly development and construction
reports in
the form we designate
from the date you
begin development
until the date you open the Restaurant. For instance, you must contact
us weekly and provide checklists and digital photos during
construction. In
addition, on or before the deadlines to start
construction you
must submit to us executed copies of any loan
documents and any
other document
that proves
that you have
secured
adequate financing to
complete the
construction of the
Restaurant by
the date you are obligated to have the Restaurant open and in
operation. In the
event that you fail to begin construction or to
secure financing pursuant to this paragraph, we will have the right to
terminate this
Agreement without opportunity to cure pursuant to
subparagraph 13.B.2.
7
<PAGE>
C. Maintenance.
The building, equipment,
fixtures,
furnishings, signage
and trade dress (including the interior and
exterior appearance)
employed in the operation of your Restaurant must
be maintained
and refreshed in accordance with our requirements
established
periodically and any of our reasonable schedules prepared
based upon periodic evaluations of the premises by our
representatives.
Within a period of 30-45 days (as we determine depending on the work
needed)
after the receipt of any particular report prepared following
such an evaluation,
you must effect the items of maintenance we
designate,
including the
repair of defective items and/or the
replacement of
irreparable or obsolete items of equipment and interior
signage. If, however,
any condition presents
a threat to customers or
public health or
safety, you must effect the items of maintenance
immediately, as
further described in
subparagraph
6.G. The items of
maintenance generally result from common wear and tear over a
period of
time, accidents or
lack of care. Examples include, but are not limited
to, repairing or
replacing HVAC
equipment,
plumbing and
electrical
systems that are not
functioning properly;
repairing a leaking
roof;
repairing or replacing broken operational and audio-visual
equipment;
refreshing general
appearance
items such as paint (interior and
exterior) and landscaping; replacing worn carpet,
furniture and
other
furnishings; and
conducting routine
maintenance of areas
that affect
the appearance of the Restaurant and goodwill of the Trademarks
such as
the appearance
of the outdoor
signage, the parking lot and dumpster
area. Items
of maintenance will not be considered items of
modernization or replacement under subparagraph 5.E and, therefore,
any
expenses for
maintenance
will not be
counted towards the Maximum
Modernization Amount
that you are required to spend pursuant to
subparagraph 5.E.
D. Relocation.
If you need to relocate because of
condemnation,
destruction, or expiration or cancellation of your lease
for reasons other than
your breach, we will
grant you authority to do
so at a site
acceptable to us that
is within your
Designated
Area;
provided that (i) the
new site has been
evaluated by the
proprietary
site evaluator software that has been developed by GeoVue,
Inc. (or by
the proprietary site
evaluation system then
being used by us) and you
have paid the $400 evaluation fee, provided, that you must purchase
the
rights to have at
least 3 sites
evaluated unless we
determine your
trade area does not require 3 evaluations; (ii) we have consented in
writing to the new site; (iii) the new Restaurant is under
construction
within 90 days after you discontinue operation of the Restaurant at
the
Authorized Location;
and (iv) the new Restaurant is open and operating
within 270 days after
construction
commences, all in
accordance with
our then-current
standards. If you
voluntarily decide to relocate the
Restaurant, your right to relocate the Restaurant will be void and
your
interest in this Agreement will be voluntarily abandoned, unless you
have given us notice of your intent to relocate not less than 60 days
prior to closing the
Restaurant,
have procured a site that has been
evaluated by the
proprietary site
evaluator software that has been
developed by GeoVue, Inc. (or by the proprietary site evaluation
system
then being used by us) and accepted by us within 60 days after
closing
the prior Restaurant,
have opened the new Restaurant for business
within 180 days of such closure and complied with any other
conditions
that we reasonably
require. You must pay
the costs of any relocation,
and we reserve the right to charge you for any reasonable costs
that we
incur.
In the event your
Restaurant is
destroyed or damaged and you
repair the Restaurant at the Authorized Location (rather than relocate
the Restaurant),
you must repair and reopen the Restaurant at the
Authorized Location in
accordance with our then-current standards for
the destroyed or damaged area within 270 days of the date of
occurrence
of the destruction or damage.
You do not have the
right to relocate
in the event you
lose
the right to occupy the Restaurant premises because of the
cancellation
of your lease due to your breach. The termination or cancellation of
your lease due to your
breach is grounds
for immediate termination
under subparagraph 13.B.2.
E. Modernization
or Replacement. From time to time as we
require, you must
effect items of modernization and/or replacement of
the building,
premises, trade dress,
equipment and grounds
as may be
necessary for your Restaurant to conform to the standards for
similarly
situated new BUFFALO
WILD WINGS
restaurants. The
maximum cumulative
amount (the "Maximum
Modernization Amount")
that you will be required
to spend during the initial term of this Agreement depends on whether
your Restaurant
is a free standing location and is established as
follows:
8
<PAGE>
(i) Free Standing
Locations (a single
use,
single tenant,
unattached building or
pad site). You will be
required to spend no more than $185,000 during the initial 10
years of this Agreement and $50,000 during years 11-15.
If we
do not require you to spend $185,000 during the first 10 years
of the Agreement,
we may require you to
spend the
remaining
amount, in addition to the $50,000, during years 11-15. If we
do not require you to spend $235,000 during the first 15 years
of this Agreement,
we may require you to
spend the remaining
amount up to $235,000 during years 16-20.
(ii) Non-Free Standing
Locations. You
will
be required to spend no more than $155,000 during the initial
10 years of this Agreement and $25,000 during years 11-15.
If
we do not require you
to spend $155,000
during the first
10
years of the
Agreement,
we may require you to spend the
remaining amount,
in addition to the
$25,000, during years
11-15. If we do not
require you to spend $180,000 during the
first 15 years of this Agreement, we may require you to spend
the remaining amount up to $180,000 during years 16-20.
Notwithstanding the prior paragraphs, we will not require you
to make any modernization expenditures during the first
three years of
this Agreement.
Thereafter,
however,
you must complete to our
satisfaction any
changes we require within 24 months from the date you
are notified of any required changes, except for outdoor signage as
set
forth in subparagraph 5.F.
Each and every
transfer of any interest in this Agreement or
your business governed
by Paragraph 11 or renewal covered by Paragraph
4 is expressly conditioned upon your compliance with these
requirements
at the time of
transfer or
renewal without regard to the Maximum
Modernization Amount.
The Maximum Modernization Amount will be adjusted every 5-year
period in accordance
with any change in the
National Consumer
Price
Index - All Urban Consumers for the recently completed 5-year period,
as described in
subparagraph 16.Q. The
Maximum Modernization
Amount
does not include any required expenditures for equipment or leasehold
improvements necessary
to prepare new product offerings. Furthermore,
you must perform general, continued maintenance and refreshing of
the
Restaurant premises whenever necessary as set forth in subparagraph
5.C
and at a cost not included in the Maximum Modernization Amount.
You acknowledge
and agree that the requirements of this
subparagraph 5.E are
both reasonable and necessary to ensure continued
public acceptance and
patronage of BUFFALO WILD WINGS restaurants and
to avoid deterioration or obsolescence in connection with the
operation
of the Restaurant.
If you fail to make
any improvement as required by
this subparagraph or perform the maintenance described in subparagraph
5.C, we may, in addition to our other rights in this Agreement,
effect
such improvement or maintenance and you must reimburse us for the
costs
we incur.
F. Signage. The outdoor signage at your Restaurant must comply
with our then current
specifications,
which we may modify
and change
from time to time due to modifications to the System, including
changes
to the Trademarks. You must make such changes to the outdoor
signage as
we require.
We will pay for 1/3 of
the cost to replace
your outdoor
signage if:
(i) your Restaurant's sign is less than 2 years old
and
(ii) we require that you replace the sign within one year from the
date
of notification.
In any case,
your failure to replace the signage
within 15 months from the date of notification will constitute a
default of this Agreement under Paragraph 13. Any upgrades
to the type
or size of your outdoor signage will be at your expense. Your costs
for
the signage will be included in the Maximum Modernization Amount under
subparagraph 5.E.
PRODUCTS AND OPERATIONS STANDARDS AND REQUIREMENTS
6. You
must
implement and abide by our requirements and
recommendations
directed to
enhancing substantial System uniformity. The
following provisions control with respect to products and
operations:
9
<PAGE>
A. Authorized
Menu. Your business must be confined to the
preparation and
sale of only
such Menu Items and other food and
beverage products as
we designate and
approve in writing from time to
time for sale by your
Restaurant. You must
offer for sale from the
Restaurant
all items and only
those items listed as Menu Items and
other approved
food and beverage products. You must offer the full
Authorized Menu during all hours of operation, although you may
offer a
limited selection
of food Menu Items during the last hour if your
Restaurant is open
past midnight
and in excess of 12
hours during a
day. We have the right to make modifications to these items from time
to time, and you agree
to comply with any
modifications. You may
not
offer or sell any other product or service at the Authorized Location
without our prior written consent.
B. Authorized Products
and Ingredients.
You must use in
the
operation of the
Restaurant and in the
preparation of Menu
Items and
other food and beverage products only the proprietary sauces and mixes
and other proprietary and non-proprietary ingredients, recipes,
formulas, cooking
techniques
and processes
and supplies, and must
prepare and serve Menu
Items and products
in such portions, sizes,
appearance, taste and
packaging, all as we specify in our most current
product preparation
materials or otherwise
in writing. We will supply
to you a copy of the current product preparation materials prior to
opening the
Restaurant. You
acknowledge and agree
that we may change
these periodically
and that you are obligated to conform to the
requirements.
All supplies,
including
containers,
cups, plates,
wrapping, eating
utensils, and napkins, and all other customer service
materials of all
descriptions
and types must meet
our standards
of
uniformity and quality. You acknowledge that the Restaurant must at
all
times maintain an inventory of ingredients, food and beverage products
and other products, material and supplies that will permit
operation of
the Restaurant at maximum capacity.
C. Approved
Supplies and
Suppliers.
We will furnish to
you
from time to time lists of approved supplies or approved suppliers.
You
must only use approved products, services, inventory, equipment,
fixtures, furnishings, signs, advertising materials, trademarked items
and novelties,
and other items or
services
(collectively,
"approved
supplies") in connection with the design, construction and
operation of
the Restaurant
as set forth in the
approved supplies and approved
suppliers lists, as we may amend from time to time. Although we do not
do so for every item,
we have the right to approve the manufacturer,
distributor and/or supplier of approved supplies and in some
instances,
require that you use
designated
sources or
suppliers.
Along with a
number of other
approval criteria,
to be an approved
supplier, the
supplier must have the ability to provide the product and/or service,
on a national basis, to at least 80% of the then existing
Restaurants.
You acknowledge and
agree that certain
approved supplies may
only be
available from one source, and we or our affiliates may be that
source.
All inventory, products, materials and other items and supplies
used in
the operation of the
Restaurant that are
not included in the approved
supplies or approved suppliers lists must conform to the
specifications
and standards we
establish from time to time. ALTHOUGH APPROVED OR
DESIGNATED BY US, WE AND OUR AFFILIATES MAKE NO WARRANTY AND EXPRESSLY
DISCLAIM ALL WARRANTIES, INCLUDING WARRANTIES OF MERCHANTABILITY
AND
FITNESS FOR ANY PARTICULAR PURPOSE, WITH RESPECT TO SERVICES,
PRODUCTS,
EQUIPMENT (INCLUDING,
WITHOUT
LIMITATION,
ANY REQUIRED COMPUTER
SYSTEMS), SUPPLIES,
FIXTURES, FURNISHINGS
OR OTHER APPROVED ITEMS. IN
ADDITION, WE DISCLAIM
ANY LIABILITY
ARISING OUT OF OR IN
CONNECTION
WITH THE SERVICES
RENDERED OR PRODUCTS FURNISHED BY ANY SUPPLIER
APPROVED OR DESIGNATED
BY US. OUR APPROVAL OR CONSENT TO ANY SERVICES,
GOODS, SUPPLIERS, OR ANY OTHER INDIVIDUAL, ENTITY OR ANY ITEM SHALL
NOT
CREATE ANY LIABILITY TO US.
D. Computer
System. You must purchase and use any computer
system that we
develop or select for
the Restaurant,
including all
future updates,
supplements and modifications (the "Computer System").
Any updates, supplements or modifications are not subject to or
part of
the Maximum
Modernization Amount
defined in
subparagraph
5.E. The
Computer System may
include all
hardware and software used in the
operation of the Restaurant, including electronic point-of-sale cash
registers and back office programs used to record,
analyze and report
sales, labor,
inventory and tax
information.
The computer
software
package developed for
use in the Restaurant
may include
proprietary
software. You may be
required to license the proprietary software from
us, an affiliate or a third party and you also may be required to
pay a
software licensing
or user fee in connection with your use of the
proprietary software.
All right,
title and interest in the software
will
remain with the licensor of the software. The computer hardware
component of the
Computer System must
conform to
specifications
we
develop. We reserve
the right to designate
a single source from
whom
you must purchase the Computer System. You acknowledge and agree that
we will have full and complete access to information and data entered
and produced by the Computer System. You must, at all times,
have at
the Authorized
Location internet access with a form of high speed
connection as we
require and you must
maintain: (i) an email
account
for our direct
correspondence
with the Control Person; and (ii) a
separate email account for the Restaurant.
10
<PAGE>
E. Serving
and Promotional Items. All sales promotion
material, customer
goodwill items, cartons, containers, wrappers and
paper goods, eating
and serving utensils and other items, and customer
convenience items used in the sales promotion, sale and
distribution of
products covered by
this Agreement
are subject to our
approval and
must, where practicable, contain one or more of the
Trademarks. We may
require you
to carry and offer for sale in the Restaurant a
representative supply
of approved trademarked clothing and other
novelty items,
including special promotional items that we develop and
market from time to time.
F. Health and Sanitation. Your Restaurant must be operated and
maintained at all
times in compliance with any and all applicable
health and sanitary standards prescribed by governmental authority.
You
also must comply with any standards that we prescribe. In addition to
complying with such
standards,
if the Restaurant is subject to any
sanitary or health
inspection by any
governmental
authorities under
which it may be rated in one or more than one classification, it must
be maintained and
operated so as to be rated in the highest available
health and sanitary
classification with
respect to each
governmental
agency inspecting
the same. In the event you fail to be rated
in the
highest classification
or receive any notice that you are not in
compliance with all applicable health and sanitary standards,
you must
immediately notify us of such failure or noncompliance.
G. Evaluations. We or
our authorized
representative have the
right to enter your
Restaurant
at all reasonable times during the
business day for the
purpose of making
periodic evaluations and to
ascertain if the
provisions of this
Agreement are being
observed by
you, to inspect and evaluate your building, land and equipment,
and to
test, sample,
inspect and evaluate
your supplies, ingredients and
products, as well as
the storage,
preparation and formulation and the
conditions of sanitation and cleanliness in the storage, production,
handling and
serving. If we determine that any condition in the
Restaurant presents a
threat to customers or public health or safety,
we may take whatever
measures we deem necessary, including requiring
you to immediately close the Restaurant until the situation is
remedied
to our satisfaction.
Our inspections and evaluations may include a
"mystery shopper" program from time to time throughout the term of
this
Agreement. We hire various vendors who send the "mystery shoppers"
into
the BUFFALO WILD WINGS restaurants. If you fail an evaluation by us
or
by a mystery shopper
or if we receive a specific customer complaint,
you must pay for the
mystery shopper(s) we send to your Restaurant
(until the issue is
resolved to our
satisfaction).
The current fee
charged by the vendors is approximately $100 fee per visit, which you
must pay directly to the vendor. The fee per visit includes the
reimbursement of the
tab paid by the
mystery shopper
for the items
consumed at your
Restaurant and,
therefore,
the actual fee for
each
visit will vary.
H. Period of Operation. Subject to any contrary
requirements
of local
law, your Restaurant must be opened to the public and operated
with the full
Authorized Menu at
least 12 hours each day of the year,
although you have the
option to close
your Restaurant, with prior
notification to us, 5 days per year, although never 2 consecutive
days
(with the exception of Christmas Eve and Christmas Day). Any variance
from this provision must be authorized by us in writing. You
acknowledge and agree that if your Restaurant is closed for a
period of
2 consecutive days or 5 or more days in any 12-month period without
our
prior written
consent, such closure constitutes your voluntary
abandonment of the
franchise and business and we have the
right, in
addition to other
remedies provided
for herein,
to terminate this
Agreement. Acts of force majeure, as defined in subparagraph 16.M
cause
preventing you
temporarily
from complying with the foregoing will
suspend compliance for the duration of such interference.
I. Operating
Procedures.
You must adopt and use as your
continuing operational
routine the required standards, service style,
procedures, techniques
and management systems described in our manuals
or other written
materials relating to product preparation, menu,
storage, uniforms,
financial management, equipment, facility and
sanitation. We will revise the manuals and these standards,
procedures,
techniques and
management
systems periodically to meet changing
conditions of retail
operation in the best interest of restaurants
operating under the Trademarks. Any required standards exist to
protect
our interests in the System and the Trademarks and not for the
purpose
of establishing any
control or duty to take control over those matters
that are reserved to you. You must use your best efforts to promote
and
increase the sales and
service of Menu Items
and to effect the widest
and best possible distribution throughout the Designated Area.
11
<PAGE>
You acknowledge
having received one copy of the manuals on
loan from us for the term of this Agreement. You acknowledge and agree
that the manuals and other system communications may only be
available
on the internet or other online or computer communications. The
manuals
at all times are our
sole property.
You must at all times
treat the
manuals, and the
information they contain, as secret and confidential,
and must use all
reasonable efforts to
maintain such
information as
secret and
confidential. We may
from time to time revise the contents
of the manuals
and you expressly agree to comply with each new or
changed requirement. You must at all times ensure that your copy of
the
manuals are
kept current and up to date, and in the event of any
dispute as to the
contents of said
manuals, the terms of the master
copy of the manuals that we maintain are controlling.
J. Confidential
Information. You, the
Principal Owners,
the
Unit General Manager, your guarantors, officers, directors, members,
managers, partners,
employees or agents,
or any other
individual or
entity related to, or
controlled by, you may
not, during the term
of
this Agreement or thereafter, disclose, copy, reproduce, sell or use
any such information in any other business or in any manner not
specifically
authorized or
approved in advance in writing by us
any
Confidential Information. For purposes of this Agreement,
"Confidential
Information" means the
whole or any portion
of know-how,
knowledge,
methods,
specifications,
processes, procedures
and/or improvements
regarding the business that is valuable and secret in the sense
that it
is not generally known to our competitors and any proprietary
information contained
in the manuals or otherwise communicated to you
in writing,
verbally or through the internet or other online or
computer communications, and any other knowledge or know-how
concerning
the methods of operation of the Restaurant, as well as the content of
this Agreement and any other document executed in connection with
this
Agreement. Any and all
Confidential
Information,
including, without
limitation,
proprietary ingredients, sauces and mixes, secret formulas
and recipes, methods,
procedures, suggested
pricing,
specifications,
processes, materials,
techniques
and other data, may
not be used for
any purpose other than
operating the
Restaurant. We may
require that
you obtain
nondisclosure
and confidentiality agreements in a form
satisfactory to us
from any persons owning a minority interest in the
franchisee, the
Principal Owners,
the Unit General
Manager and other
key employees. You
must provide executed copies of these agreements to
us upon our request.
Notwithstanding the foregoing, you are authorized
to disclose the terms
of this Agreement to
any lender providing
you
financing for the Restaurant as well as to your landlord.
K. Vending
Services. If you install or maintain on the
premises any newspaper
racks, video games,
jukeboxes,
gum machines,
games, rides,
vending machines,
or other similar
devices that do not
meet with our approval, you must remove them within 3 days from
receiving written
notice from us. Pool tables, cigarette vending
machines, gambling
and gaming machines or games of chance are not
allowed. Any income
from vending services
in the Restaurant or on its
premises, regardless
of which person or entity collects the money, and
regardless of
whether we
authorized
you to install them, must be
included
in Gross Sales for purposes of your Royalty Fee and
Advertising Fee.
Upon our written
approval, the money derived from
services provided by charitable organizations or services that are
for
customer convenience,
such as pay phones or cash machines, will not be
included in Gross Sales.
L. Catering
and Delivery Services. If you want to offer
catering or delivery
service to customers,
you must obtain our
prior
written approval, which we will not withhold unreasonably,
although we
reserve the right to require you to offer catering service to
customers
located within the Designated Area. Any catering or delivery
services
must meet our written
standards.
You also must charge
the same price
for products offered by the Restaurant whether delivered or catered
by
or sold in the
Restaurant.
Any income from catering or delivery
services must be
included in Gross Sales for purposes of your Royalty
Fee and Advertising Fee.
M. Compliance with Law; Licenses and Permits. You must at all
times maintain your premises and conduct your Restaurant
operations in
compliance with all applicable laws, regulations, codes and
ordinances.
You must secure and maintain in force all required licenses,
including
a liquor license that permits alcohol sales 7 days a week (full
liquor
Monday through Saturday and either full liquor or at least beer
only on
Sundays), permits and certificates relating to your Restaurant. If
your
Restaurant is open and
operating and a change occurs in applicable
state or local law that does not permit liquor sales on Sundays, it
will not be deemed a breach of this Agreement. In the event your
liquor
license is suspended or revoked, in addition to our right to
terminate
this Agreement
pursuant to subparagraph 13.B, we reserve the right to
charge you the Royalty
Fee on the Gross Sales you would have received
on the lost
liquor sales during the license suspension. We will
estimate the Gross
Sales based on the prior year's Gross Sales for the
suspension period.
12
<PAGE>
You acknowledge
that you are an independent business and
responsible for control and management of your Restaurant, including,
but not limited to, the hiring and discharging of your employees and
setting and
paying wages and benefits of your employees. You
acknowledge that we
have no power,
responsibility
or liability in
respect to the
hiring, discharging, setting and paying of wages or
related matters.
You must immediately notify us in writing of any claim,
litigation or
proceeding that arises
from or affects the operation or
financial condition of
your BUFFALO WILD WINGS business or Restaurant,
including any
notices of health
code violations or liquor license
violations.
N. Participation
in Internet Web Sites or Other Online
Communications. You
must, at your expense,
participate in our BUFFALO
WILD WINGS
web site on the
internet, our intranet system or other
online communications as we may require. For instance, you must submit
to us daily reports via our intranet system, as further described in
subparagraph 9.H. We have the right to determine the content and
use of
our web site and
intranet system and
will establish
the rules under
which franchisees
may or must
participate.
You may not separately
register any
domain name containing any of the Trademarks nor
participate in any web site that markets goods and services
similar to
a BUFFALO WILD WINGS
restaurant. We retain
all rights relating to our
web site and intranet system and may alter or terminate our web
site or
intranet system.
Your general conduct on our web site and
intranet
system or other online
communications and specifically your use of the
Trademarks or any
advertising
is subject to the
provisions
of this
Agreement. You
acknowledge that
certain information
related to your
participation in our
web site or intranet
system may be considered
Confidential
Information, including
access codes and
identification
codes. Your right to
participate in our web site and intranet system,
or otherwise
use the Trademarks or System on the internet or other
online communications,
will terminate when
this Agreement expires
or
terminates.
O. System
Modifications. You
acknowledge
and agree that we
have the right to modify, add to or rescind any requirement,
standard
or specification
that we prescribe
under this Agreement
to adapt the
System to changing conditions competitive circumstances, business
strategies, business
practices and technological innovations and other
changes as
we deem appropriate. You must comply with these
modifications, additions or rescissions at your expense, subject to
the
requirements of subparagraph 5.E and any other express limitations set
forth in this Agreement.
P. Suggested Pricing Policies. We may, from time to time, make
suggestions to
you with regard to your pricing policies.
Notwithstanding any suggestions, you have the sole and exclusive
right
as to the minimum
prices you charge for
the services
offered at the
Restaurant. We retain
the right to establish maximum prices to be
charged by you for sales promotions, subject to subparagraph
8.F, or
otherwise. Any list or schedule of prices we furnish to you may,
unless
otherwise specifically
stated as to the maximum price, be treated as a
recommendation only
and failure to accept or implement any such
suggestion will not in any way affect the relationship between you and
us.
PERSONNEL AND SUPERVISION STANDARDS
7. The following
provisions
and conditions control with respect to
personnel, training and supervision:
A. Supervision.
You must have a Control Person and a Unit
General Manager that meet our standards and qualifications at all
times
during the term of this Agreement. Your Control Person and Unit
General
Manager must attend and successfully complete all required
training, as
set forth in
subparagraphs 7.B - E.
Should any actions (or inactions)
of your Control Person or Unit General Manager cause the individual
to
fail
to meet our standards and qualifications or should the
action (or
inaction) bring or
tend to bring any of the Trademarks into disrepute
or impair or tend to impair your or your Restaurant's reputation or
the
goodwill of the
Trademarks, your
Restaurant or the BUFFALO WILD WINGS
system, we have the
right to require
that you replace the Control
Person or Unit
General Manager with an individual who meets our
standards and qualifications within 30 days. Any new Control
Person or
Unit General Manager must attend and successfully complete our
training
requirements
immediately after
being appointed
by you. The Control
Person and Unit
General Manager
must ensure that the
Restaurant
is
operated in accordance with the terms and conditions of this
Agreement,
although this in no way relieves you of your responsibilities to do
so.
Your Control Person also must be readily and continuously
available to
us. In addition to the Control Person and your Unit General Manager,
you must have at least two assistant managers at all times during
the
term of this Agreement.
13
<PAGE>
B. Training. You must, at your expense, comply with all of the
training requirements
we prescribe for the
Restaurant to be developed
under this Agreement.
The Control Person, the Unit General Manager and
at least one of your
assistant managers must attend training and
complete training to our satisfaction (such that at all times you
have
3 trained managers for your Restaurant). All replacement managers must
complete training to our satisfaction, and must begin training
within 6
weeks of the time of hire. The training requirements may vary
depending
on our assessment of
the experience of the
Control Person,
the Unit
General Manager and the assistant managers or other factors
specific to
the Restaurant.
In the event you are
given notice of
default as set
forth in subparagraphs 13.A and B and the default relates,
in whole or
in part, to your failure to meet any operational standards, we have
the
right to require as a
condition of curing
the default that you,
the
Control Person, the Unit General Manager and the assistant
managers, at
your expense,
comply with the
additional
training requirements we
prescribe. Any new
Control Person or Unit General Manager must comply
with our training
requirements. Under no
circumstances may you permit
management of the
Restaurant's
operations
by a person who has not
successfully completed
to our reasonable
satisfaction all
applicable
training we require.
C. Ongoing Training.
We may require the
Control Person,
the
Unit General Manager, the assistant managers and other key
employees of
the Restaurant
to attend,
at your expense,
ongoing training at our
training facility,
the Authorized Location or other location we
designate. In
addition, we may
develop and require you to purchase an
in-restaurant training program.
D. Staffing. You will
employ a sufficient number of competent
and trained employees
to ensure efficient
service to your
customers.
You must require all your employees to work in clean uniforms
approved
by us, but furnished
at your cost or the
employees'
cost as you may
determine. No
employee of yours will be deemed to be an
employee of
ours for any purpose whatsoever.
E. Attendance
at Meetings.
You and the Control
Person must
attend, at your expense, all annual franchise conventions we may hold
or sponsor
and all meetings relating to new products or product
preparation
procedures, new
operational
procedures
or programs,
training, restaurant
management, sales or
sales promotion, or similar
topics. If you or the
Control Person are not
able to attend a meeting
or convention, you
must notify us prior to the meeting and must have a
substitute person
acceptable
to us attend the
meeting. In
addition,
your Unit General
Manager(s) must attend the annual training meeting
for Unit General
Managers that we may hold or sponsor, at your own
expense. We reserve
the right to require
that you and/or your Control
Person attend any additional meetings that we deem appropriate under
special circumstances,
provided however, that we will not require more
than one additional
meeting every year and we will give you
written
notice of any such meeting at least 10 days prior to the
meeting.
ADVERTISING
8. You agree to actively promote your Restaurant, to abide by all of
our advertising requirements and to comply with the following
provisions:
A. Advertising Fund.
You must pay to us an Advertising Fee as
set forth in subparagraph 9.C. All Advertising Fees will be placed in
an Advertising
Fund that we own and
manage. On behalf of
our company
and affiliate owned restaurants (except for "Special Sites"),
we will
pay the same Advertising Fee as similarly situated franchised
restaurants (based
on age and type of
location) in the same local
marketing area. The Advertising Fund is not a trust or escrow
account,
and we have no fiduciary obligation to franchisees with
respect to the
Advertising Fund;
provided, however, we
will make a good faith effort
to expend such fees in
a manner that we
determine is in the general
best interests
of the System. We have the right to determine the
expenditures of the
amounts collected
and the methods of
marketing,
advertising, media
employed and
contents, terms and conditions of
marketing campaigns
and promotional
programs. Because of
the methods
used, we are not required to spend a prorated amount on each
restaurant
or in each advertising
market. We have the right to make disbursements
from the Advertising Fund for expenses incurred in connection with
the
cost of formulating, developing and implementing marketing,
advertising
and promotional campaigns. The disbursements may include payments
to us
for the expense
of administering the Advertising Fund, including
accounting expenses
and salaries and
benefits paid to our
employees
engaged in the advertising functions. If requested, we will provide
you
an annual unaudited statement of the financial condition of the
Advertising Fund.
14
<PAGE>
B. Required Local Expenditures. You must use your best efforts
to promote and advertise the Restaurant and participate in any local
marketing and
promotional programs
we establish from time to time. In
addition to the Advertising Fee, you are required to spend 1/2% of
your
Gross Sales
on approved local marketing and promotion. Upon our
request, you must
provide us with
itemization and proof
of marketing
and an accounting of the monies that you have spent for approved
local
marketing. If you fail
to make the required
expenditure, we have
the
right to collect and contribute the deficiency to the Advertising
Fund.
C. Approved
Materials.
You must use only
such advertising
materials (including any print, radio, television, electronic, or
other
media forms that may
become available
in the future) as we furnish,
approve or make
available, and the
materials must be used only in a
manner that we prescribe. Furthermore, any promotional activities you
conduct in
the Restaurant or on its premises are subject to our
approval. We will not
unreasonably
withhold approval of any sales
promotion materials or
media and activities;
provided that they are
current, in good
condition,
in good taste and
accurately depict
the
Trademarks. Any
point-of-sale posters
or other promotional
materials
used by you
must be current and in good condition. We may make
available at a reasonable cost to you annually or at other
reasonable
intervals, a sales
promotion kit containing new (or replacement)
point-of-sale and other promotional materials.
D. Advertising
Cooperatives.
We have the right to
designate
local advertising
markets and if
designated, you must
participate in
and contribute to the cooperative advertising and marketing
programs in
your designated local
advertising
market. If established, you must
contribute the 1/2% of
Gross Sales you are
required to spend on local
marketing and
promotion to the local
cooperative. If,
however, the
cooperative votes to spend a percentage greater than 1/2% per
location,
you must contribute
such amount. Each
BUFFALO WILD WINGS
restaurant,
including those
operated by us, our
parent company or our
affiliates
(except Special Sites) within a designated local advertising area is a
member of the local advertising cooperative and each restaurant has
one
vote on all matters requiring a vote. Each advertising cooperative
will
be required to adopt governing bylaws that meet our approval.
We will
provide each
advertising
cooperative
with a sample
form of bylaws,
containing certain
terms and conditions that we require, although the
bylaws can not modify the voting structure set forth in this
paragraph.
You will be required to contribute to the cooperative the
percentage as
designated by a majority vote of the cooperative members. We reserve
the right to administer the advertising cooperatives' funds and
require
payment from
its members via electronic funds transfer. The
contribution amount
designated
by the cooperative must be on a
percentage of Gross
Sales basis and per Restaurant, and must be at
least 1/2%. The members of each cooperative and their elected
officers
will be responsible for the administration of the advertising
cooperative. Each advertising cooperative must engage the services
of a
professional
advertising agency or
media buyer
that meets with our
approval and
has expertise in the industry and in the particular
market. Further,
you must obtain our written approval of all
promotional and
advertising materials,
creative execution and media
schedules prior to their implementation. Each advertising cooperative
will be required to prepare annual financial statements,
which must be
made available
to all members of the cooperative and to us upon
request. Also,
each advertising cooperative must submit to us its
meeting minutes
upon our request. We have the right to require
advertising cooperatives to be formed, changed, dissolved or
merged.
E. Telephone
Directory Listing. You must place a separate
listing, or
participate in a joint listing, in the primary yellow page
directory serving
the geographic area in which your Restaurant is
located. The
listing must contain such copy and proper use of the
Trademarks as we
specify. The cost of
the listing must be paid by you
or, in the case of a
joint listing,
by you and
other participating
BUFFALO WILD WINGS
restaurants.
Your cost to advertise
in the yellow
pages as we direct will be included as part of your local
advertising
requirements
under
subparagraph
8.B. We
will not specify an
unreasonably expensive
listing; we may, however, require you to
advertise in more than one local telephone directory.
F. Participation in Certain Programs and Promotions. You must
participate in all required advertising and promotional programs we
establish. If the
promotional program
involves alcohol,
or any Menu
Item that is listed on the then current BUFFALO WILD WINGS printed
menu
(excluding any inserts), we may suggest, but will not require, that
you
offer the item at a price lower than the every day menu price. You
must
use and honor only system-wide gift cards, certificates and checks
that
we designate and you must obtain all certificates, cards or checks
from
an approved supplier. We have developed a gift card program and
require
that you sign the
Participation
Agreement attached as
Appendix E. At
the time of termination or expiration, or the transfer of your rights
under this Agreement,
you must pay all
amounts owed by you
under the
Participation
Agreement, including
those amounts from purchased, but
unredeemed, gift cards.
15
<PAGE>
G. New Restaurant Opening Promotion. You must conduct certain
advertising and public
relations activities in connection with the
opening of your Restaurant. We require you to spend, in addition to
the
required local advertising contribution described above, $12,500 for
such opening
activities, which must
be spent within the 45 days prior
or 45 days following the opening of your Restaurant, unless otherwise
approved by us. In addition, you must perform opening
advertising and
promotions as
required by this paragraph every time that you (i)
relocate the Restaurant or (ii) reopen the Restaurant after having it
closed for 30 days or more. Upon our request, you must provide to us
proof of these expenditures. We have the right, but not the
obligation,
to collect and administer these funds on your behalf.
FEES, REPORTING AND AUDIT RIGHTS
9. You must pay the fees described below and comply with the
following
provisions:
A. Initial Franchise
Fee. You must pay to us a nonrefundable
Initial Franchise Fee of $________. The Initial Franchise Fee,
payable
in full on the date you sign this Agreement, is earned upon receipt
and
is in consideration
for our expenses incurred and services rendered in
granting you the franchise rights.
B. Royalty
Fee. In addition
to the Initial
Franchise Fee,
during the full term
of this Agreement
and in consideration of the
rights granted to you,
you must pay to us as a weekly Royalty Fee. The
Royalty Fee for the
first half of the initial term of this Agreement
shall be an amount equal to 5% of Gross Sales. The Royalty Fee for the
second half of the initial term of this Agreement shall be an amount
equal to the greater
of (i) 5% of Gross
Sales or (ii) the Royalty Fee
being charged by us under our form of franchise agreement being
used by
us at any time
during the second half of the initial term of the
Agreement (or, if no form of franchise agreement is being used by
us on
such date, the Royalty Fee being charged by us under our latest
form of
franchise agreement),
provided that the Royalty Fee may not be
increased by more than
1/2% at any time during the initial term of the
Agreement. The amount
of the Royalty Fee for any renewal term shall be
that provided in the
franchise agreement executed for such renewal
term.
C. Advertising
Fee. You must pay to
us a weekly
Advertising
Fee in an amount equal
to 3% of Gross Sales.
We reserve the right
to
increase this percentage upon 60 days written notice to you,
provided,
however, that we may not increase the Advertising Fee by more than
1/2%
per year and that the Advertising Fee will not exceed 4% for the
initial term of this Agreement. These fees are not held by us in
trust
and become our property to be spent in accordance with Paragraph 8 of
this Agreement.
D. Computations
and Remittances. Except for the Initial
Franchise Fee, you must compute all amounts due and owing at the
end of
each week's operation and remittance for the amounts must be made
to us
on or before Friday of the following week, accompanied by the reports
required by subparagraph 9.H of this Agreement. We reserve the
right to
change the reporting
day of the week for any or all amounts. You must
certify the
computation
of the amounts in the manner and form we
specify, and you must
supply to us any
supporting
or supplementary
materials as
we reasonably require to verify the accuracy of
remittances. You waive
any and all existing
and future claims and
offsets against any amounts due under this Agreement, which amounts
you
must pay when due. We
have the right to
apply or cause to be
applied
against amounts due to
us or any of our affiliates any amounts that we
or our affiliates may
hold from time to time on your behalf or that we
or our affiliates
owe to you.
Further, if you are delinquent in the
payment of any amounts
owed to us, we have the right to require you to
prepay estimated Royalty Fees and Advertising Fees.
E. Electronic Transfer
of Funds. You must
sign an electronic
transfer of funds
authorization,
attached as Appendix D, to authorize
and direct
your
bank or financial institution to transfer
electronically, on a
weekly basis,
directly to our account or our
affiliates' and to
charge to your account all amounts due to us or our
affiliates. You must
maintain a balance in your account sufficient to
allow us and our
affiliates to collect
the amounts owed when due. You
are responsible
for any penalties, fines or other similar
expenses
associated with the transfer of funds described in this
subparagraph.
16
<PAGE>
F. Interest Charges;
Late Fees. Any and all
amounts that you
owe to us or to our
affiliates will bear
interest at the rate
of 18%
per annum or the maximum contract rate of interest permitted by
governing law,
whichever is less,
from and after the date of accrual.
In addition to interest charges on late Royalty Fee and Advertising
Fee
payments, you
must pay to us a service charge of $150 for each
delinquent report or payment that you owe to us under this
Agreement. A
payment is delinquent for any of the following reasons: (i) we do not
receive the
payment on or before the date due; or (ii) there are
insufficient funds in your bank account to collect the total
payment by
a transfer of funds on or after the date due. The service charge is
not
interest or a
penalty, it is only to compensate us for increased
administrative and management costs due to late payment.
G. Financial Planning
and Management.
You must record
daily
all sales on a cash
register tape or
similar device. You must keep
books and records
and submit reports as we periodically require,
including but not
limited to a monthly
profit plan, monthly
balance
sheet and monthly
statement of profit and loss, records of prices and
special sales, check
registers,
purchase records, invoices, sales
summaries and
inventories,
sales tax records and returns, payroll
records, cash
disbursement journals
and general ledger,
all of which
accurately reflect the
operations
and condition of your Restaurant
operations. You must
compile, keep and submit to us the books, records
and reports
on the forms and using
the methods
of bookkeeping and
accounting as we periodically may prescribe. The records that you are
required to keep for your Restaurant must include detailed daily
sales,
cost of sales, and other relevant records or information
maintained in
an electronic media format and methodology we approve. You must
provide
this information to us
according to reporting
formats,
methodologies
and time schedules
that we establish from
time to time. You also must
preserve and retain the books, records and reports for not less
than 36
months. You must allow
us electronic and
manual access to any and all
records relating to your Restaurant.
H. Reports and Audit.
You must submit your
Gross Sales daily
via our intranet
system. You must verify the accuracy of the Gross
Sales figure by
Tuesday at
midnight of each week for the preceding
week. Within 10 days after the end of each month, you must submit
to us
a report
with respect to the preceding calendar month in the form and
content as we periodically prescribe. The report must include, but
not
be limited to, the following information for the preceding
month: (i)
amount of Gross Sales and gross receipts of the Restaurant, amount of
sales tax and the
computation of the
Royalty Fee and the
Advertising
Fee; (ii) quantities
of products purchased
and the sources from which
each were obtained;
(iii) if we
request, copies of your most recent
sales tax return,
monthly sales summary and monthly balance sheet and
statement of profit
and loss, including a summary of your costs for
utilities, labor, rent
and other material cost items (iv) if requested
by us to verify your Gross Sales, all such books and records as we
may
require under our audit policies published from time to time. You
also
must, at your
expense, submit to us within 90 days
after the end of
each fiscal year a detailed balance sheet, profit and loss statement
and statement
of cash flows for such fiscal year, prepared on an
accrual basis including all adjustments necessary for fair
presentation
of the financial
statements. We may
require that the annual financial
statements be
reviewed by a certified public accountant. You must
certify all reports to be true and correct. You acknowledge and agree
that
we have the right to impose these requirements on you regardless
of whether we impose the same requirement on our other
franchisees.
We or our authorized
representative
have the right at all
times during the
business day to enter
the premises where
your books
and records relative
to the Restaurant are kept and to evaluate, copy
and audit such
books and records. We also have the right to
request
information from your suppliers and vendors. In the event that any
such
evaluation or audit
reveals any
understatement
of your Gross
Sales,
Royalty Fees or
Advertising
Fees or a variance of
1.25% or more from
data reported
to us in respect to
any other item that is
material to
the computation of
fees or to the analysis of the operation, you must
pay for the audit, and
in addition to any other rights we may have, we
have the right to conduct further periodic audits and evaluations of
your books and records
as we reasonably
deem necessary for up to 3
years thereafter and any further audits and evaluations will be at
your
sole expense, including, without limitation, professional fees,
travel,
and room and board expenses directly related thereto. Furthermore, if
you intentionally
understate or underreport Gross Sales, Royalty Fees
or Advertising Fees at any time, or if a subsequent audit or
evaluation
conducted within the 3-year period reveals any understatement of your
Gross Sales, Royalty Fees or Advertising Fees or a variance of
1.25% or
more from data
reported to us in
respect to any other item that is
material to
the computation of fees or to the analysis of the
operation, in
addition to any other remedies provided for in this
Agreement, at law or
in equity, we have the
right to terminate
this
Agreement immediately.
In order to verify
the information that you
supply, we have the
right to reconstruct your sales through the
inventory extension
method or any other reasonable method of analyzing
and reconstructing
sales. You agree to accept any such reconstruction
of sales unless you provide evidence in a form satisfactory to us of
your sales
within a period
of 14 days
from the date of notice of
understatement or
variance. You must
fully cooperate
with us or our
representative in performing these activities and any expenses
incurred
by us from your lack of cooperation shall be reimbursed by you.
17
<PAGE>
We will keep your financial books, records and reports
confidential, unless the information is requested by tax
authorities or
used as part of a legal proceeding or in a manner as set forth in
subparagraph 11.D.8 or
where your information
is grouped with similar
information from other
restaurants
to produce
shared results like
high-low ranges or
average gross sales or expenses on a system-wide or
regional basis.
YOUR OTHER OBLIGATIONS; NONCOMPETE COVENANTS
10. You agree to comply with the following terms and
conditions:
A. Payment of Debts.
You agree to pay promptly when due: (i)
all payments, obligations, assessments and taxes due and
payable to us
and our affiliates,
vendors, suppliers,
lessors, federal, state or
local governments, or
creditors in connection with your business; (ii)
all liens and
encumbrances of every
kind and character created or
placed upon or against any of the property used in connection
with the
Restaurant or business; and (iii) all accounts and other
indebtedness
of every kind
incurred by you in the conduct of the Restaurant or
business.
In the event you
default in making any such payment, we are
authorized, but not
required, to pay the same on your behalf and
you
agree promptly to reimburse us on demand for any such payment.
B. Indemnification. You hereby waive all claims against us for
damages to property or injuries to persons arising out of the
operation
of your Restaurant.
You must fully protect, indemnify and hold us and
our owners, directors,
officers, insurers,
successors and assigns and
our affiliates
harmless from and against any and all claims, demands,
damages and liabilities of any nature whatsoever arising in any
manner,
directly or indirectly, out of or in connection
with or incidental
to
the operation of your Restaurant (regardless of cause or any
concurrent
or contributing
fault or negligence of
us or our affiliates)
or any
breach by you or your
failure to comply with the terms and conditions
of this Agreement.
We also reserve the right to select our
own legal
counsel to represent our interests, and you must reimburse us for
all
our costs and all attorneys' fees immediately upon our request as
they
are incurred.
We hereby waive all claims against you for damages to property
or injuries to persons
arising out of the
operation of our company or
affiliate owned
restaurants.
We must fully
protect, indemnify and
defend you and your
affiliates and hold you and them harmless from and
against any and all claims, demands, damages and liabilities of any
nature whatsoever arising in any manner, directly or indirectly,
out of
or in connection with
or incidental to the operation of our company or
affiliate owned
restaurants
(regardless of cause or any concurrent or
contributing fault or
negligence
of you) or any
breach by us or
our
failure to comply with the terms and conditions of this
Agreement.
C. Insurance. You must purchase and maintain in full force and
effect, at your
expense and from a company we accept, insurance that
insures both you and
us, our affiliates and any other persons we
designate by name. The insurance policies must include,
at a minimum:
(i) special/causes
of loss coverage forms
(sometimes called "All Risk
coverage") on the Restaurant and all fixtures, equipment, supplies and
other property used in the operation of the Restaurant, for full
repair
and replacement
value of the
machinery, equipment
and improvements,
including full coverage for loss of income resulting from damage to
the
Restaurant without any co-insurance clause, except that an appropriate
deductible clause is permitted; (ii) business interruption insurance
covering a minimum 12 months loss of income, including coverage for
our
Royalty Fees;
(iii) comprehensive general liability insurance,
including product
liability insurance and contractual liability
insurance, with
minimum limits of $1,000,000 per occurrence and
$2,000,000 aggregate;
(iv) liquor
liability coverage with minimum
limits of $1,000,000
per occurrence; (v) "Per Location" aggregate
limits when
multiple restaurant locations are insured under one
comprehensive
general
liability policy
and/or liquor liability
policy(ies); (vi)
automobile liability
insurance,
including owned,
hired and non-owned
vehicle coverage with
a minimum combined
single
limit of $1,000,000 per claim (vii) workers' compensation and
employer's liability
insurance covering all of your employees
(viii)
umbrella liability
insurance,
which also includes
liquor liability,
employer's liability and automobile liability, with minimum limits of
$2,000,000 per occurrence; (ix) Buffalo Wild Wings, Inc.,
Buffalo Wild
Wings International, Inc. and affiliates (collectively, "BWW
Entities")
as named additional insureds on all liability policies required by
this
subparagraph; (x)
severability of
interests or separation of insureds
provisions must be included in the liability policies and all policies
must be primary and non-contributing with any insurance policy
carried
by the BWW Entities;
and (xi) any other
such insurance
coverages or
amounts as
required by law or other agreement related to the
Restaurant. The
insurance coverages
referenced in (iii),
(v), (vi),
(vii), (viii), (ix); (x) and
