85 7th Place East, Suite 500
MINNESOTA
D E P A R T M E N T OF
COMMERCE
"^""^^^^^ 55101-2198
www.commerce.state.mn.us
651.296.4026
FAX 551.297.1959
An equal opportunity employer
April 2, 2012
ANN HURWITZ
BAKER BOTTS LLP
2001 ROSS AVENUE SUITE 600
DALLAS, TX 75201-2980
Re: F-4570
CICI ENTERPRISES INC
CICrS PIZZA FRANCHISE AGREEMENT
Dear Ms. Hurwitz:
The Annual Report has been reviewed and is in compliance with Minnesota Statute Chapter
SOC and Minnesota Rules Chapter 2860.
This means that there continues to be an effective registration statement on file and that the
franchisor may offer and sell the above-referenced franchise in Minnesota.
The franchisor is not required to escrow franchise fees, post a Franchise Surety Bond or
defer receipt of franchise fees during this registration period.
As a reminder, the next annual report is due within 120 days after the franchisor's fiscal year
end, which Is December 31, 2012.
Sincerely,
MIKE ROTHMAN
Commissioner
By:
Daniel Sexton
Commerce Analyst Supervisor
Registration Division
(651)296-4520
MRiDESidlw
F-4570
STATE OF MINNESOTA
DEPARTMENT OF COMMERCE
REGISTRATION DIVISION
(651) 296-6328
IN THE MATTER OF THE REGISTRATION OF:
CICI'S PIZZA FRANCHISE AGREEMENT
By CICI ENTERPRISES INC
ORDER AMENDING
REGISTRATION
WHEREAS, an a p p l i c a t i o n t o amend t h e r e g i s t r a t i o n and
amendment f e e have been f i l e d ,
IT I S HEREBY ORDERED t h a t t h e r e g i s t r a t i o n d a t e d
June 26, 2003, i s amended as o f t h e date s e t f o r t h below.
MIKE ROTHMAN
Commissioner
Department o f Commerce
85 7 t h Place East, S u i t e 500
St Paul, MN 55101
Date: A p r i l 2, 2012
UNIFORM FRANCHISE REGISTRATION APPLICATION
File N<S:rF-4570
State; Minnesota
Fee: $300
APPLICATION FOR (check only one):
INITIAL REGISTRATION OF AN OFFER AND SALE OF FRANCHISES
X
RENEWAL APPLICATION OR ANNUAL REPORT
PRE-EFFECTIVE AMENDMENT
POST-EFFECTIVE MATERIAL AMENDMENT
1.
Full legal name of Franchisor: CiCi Enterprises, LP
2.
Name ofthe franchise offering: "CiCi's Pizza", "CiCi's", and "CiCi's To Go"
3.
Franchisor's principal business address: 1080 W. Bethel Road
CoppelLTX 75019
Name and address of Franchisor's agent in this State authorized lo receive service of process:
ComiTiissioner of Commerce
Department of Commerce
85 Seventh Place East
Suite 500
St. Paul, MN 55101
4.
5.
The states in which this application is or will be shortiy on file (or in which Franchisor is
exempt);
Califomia, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North
Dakota, South Dakota, Virginia and Wisconsin
6.
Name, address, telephone and facsimile numbers, and e-mail address of person to whom
communications regarding this application should be directed:
Ann Hurwitz
Baker Botts L.L.P.
2001 Ross Avenue, Suite 600
Dallas, Texas 75201-2980
214-953-6997 (telephone)
214-661-4997 (facsimile)
[email protected]
DAL01:I054463.3
079684.0102
MINNESOTA
— 2_—
i
200' ROSS AVENUE
SUITE 600
BAKER BOTTS LL
DALLAS, TL;XAS
75701-2980
iH +1 214.953,6500
FAX +1 214.953.6503
www. ba ke r bo Us. CO m
March 28, 2012
AUSTIN
BERING
DAUAS
DUBAI
HONG KONG
HOUSTON
LONDON
MOSCOW
NEW YORK
PALO ALTO
RIYADH
WASHINGTON
Ann Hurwitz
TEL +1 214.953.6997
FAX +1 214.661.4997
Ann.Hurwitz@bakerbotts.
VL4 FEDERAL EXPRESS
Daniel Sexton
Examiner
Minnesota Department of Commerce
85 Seventh Place East, Suite 500
St. Paul, Minnesota 55101
Re:
CiCi Enterprises, LP (the "Company")
Registration Renewal Application; File No.; F-4570
Dear Dan:
Enclosed piease find the following documents for the renewal of the Company's registration in
Minnesota:
The Company's check in the amount of $300 representing the filing fee;
Uniform Franchise Registration Application Page, including Certification;
Consent to Service of Process and Corporate Acknowledgment;
Franchisor's Costs and Source of Funds Page;
Seller Disclosure forms for Sales persons (if any), and for those third party brokers and
referral sources that have provided them to the Company (please withdraw the disclosure
forms for Brian Masters and Gordan Landry, they longer have authority to engage in
franchise sales for the Company);
One clean and one redlined copy ofthe Company's Franchise Disclosure Document and
Exhibits, including the auditedfinancialstatements (Exhibit A to the disclosure document);
Auditors' Consent; and
CD-ROM. All information contained in this electronic file is identical to the enclosed paper
documents.
The Company's 2011 fiscal year end was December 25.
As evidence of receipt, pleasefile-stampthe enclosed duplicate copy of this letter and return to me in
the enclosed self-addressed, stamped envelope. If you have any questions regarding the application, please do
not hesitate to contact me by telephone. Thank you in advance for your assistance.
Sincerely,
AH/ct
Enclosures
DAL01;1055030.5
079684,0102
Certification
1 certify and swear under penalty of law that I have read and know the contents of this application,
including the Franchise Disclosure Document with an issuance date of ^ (2.
, 2012,
attached as an exhibit, and lhat all material facts stated in all those documents are accurate and those
documents do not contain any material omissions. I further certify that I am duly authorized to make
this certification on behalf of the Franchisor and that I do so upon my personal knowledge.
Executed at Coppell, Texas on March
^/
2012.
CiCi Enterprises, LP,
a Delaware limited partnership
J. Forbes 'Anderson, Manager
STATE OF TEXAS
§
§
COUNTY OF DALLAS §
Personally appeared before me this j i / - ^ day of March 2012, the above-named J. Forbes
Anderson, to me known to be the person who executed the foregoing application (as Manager of the
above-named applicant) and, being first duly sworn, stated upon oath that said application, and all
exhibits submitted herewith, are true and correct.
Notary Public
My Commission Expires:
DAL01;1054463.3
079684-0102
MINNESOTA
UNIFORM FRANCHISE CONSENT TO SERVICE OF PROCESS
CiCi Enterprises, LP, a limited partnership organized under the laws of Delaware (the "Franchisor"),
irrevocably appoints the officers of the States designated below and their successors in those offices, its attomey
in those Stales for service of notice, process or pleading in an action or proceeding against it arising out of or
in connection with the sale of franchises, or a violation of the franchise laws of that State, and consents that an
action or proceeding against it may be commenced in a court of competent jurisdiction and proper venue within
that State by service of process upon this officer with the same effect as if the undersigned was organized or
created under the laws of that State and had lawfully been served with process in that State. We have checked
below each state in which this application is or will be shortly on file, and provided a duplicate original bearing
an original signature to each state.
X
Califomia: Commissioner of
Corporations
X
Rliode Island; Director, Department of
Business Regulation
Hawaii: Commissioner of Securities
X
Illinois: Attomey General
North Dakota: Securities Commissioner
X
South Dakota: Director of the
Division of Securities
X
Indiana; Secretary of State
X
Virginia: Clerk, Virginia State
X_ Maryland: Securities Commissioner
Corporation Commission
X
Minnesota: Commissioner of
Commerce
Washington: Director of Financial
Institutions
X
New York: Secretary of State
X
Wisconsin: Administrator, Division of
Securities, Department of Financial Institutions
Please mail or send a copy of any notice, process or pleading served under this consent to:
Ann Hurwitz
Baker Botts L.L.P.
2001 Ross Avenue, Suite 600
Dallas, Texas 75201-2980
214-953-6997 (telephone)
214-661-4997 (facsimile)
[email protected]
Dated: March
2/
.2012.
CiCi Enterprises, LP,
a Delaware limited partnership
, its Genejaj Partner
J.A^orbes Anderson, Manager
DAL0I:1054463.3
079684.0102
MINNESOTA
LIMITED PARTNERSHIP ACKNOWLEDGMENT
STATE OF TEXAS
COUNTY OF DALLAS
On thejv^^ay of March 2012, before me, the undersigned officer, personally appeared J. Forbes
Anderson, known personally to me to be a manager of CiCi GP, LLC, the general partner of CiCi
Enterprises, LP, and that he, as such manager, being authorized so to do, executed the foregoing
instrument for the purposes therein contained, by signing the name of CiCi GP, LLC by himself as such
manager.
IN WITNESS WHEREOF, 1 have hereunto set my hand a
ial seal.
Notary Public
My Commission Expires:
HO^m^B^
/9
2.0/Ji
...'ivv,'"'
\
*l
DALOI :1054463.3
079684.0102
MINNESOTA
ALICE JASSO
MY COMMISSION EXPIRES
Nov8mbGr19,2013
FRANCHISOR'S COSTS AND SOURCE OF FUNDS
FOR
CICI ENTERPRISES, LP
I.
Disclose the Franchisor's total costs for performing its pre-opening obligations to provide goods
or services in connection with establishing each franchised business, including real estate,
improvements, equipment, inventory, training and other items stated in the offering:
Category
Costs
Real Estate
1 L500
Improvements/Construction
14.000
Equipment
Inventory
Training
2.750
Other (describe)
Totals
2.
28.250
State separately the sources of all required funds: general operating revenue.
DAL01;1055038.2
079684.0102
pwc
March 26,2012
Mr. Forbes Anderson
Chief Financial Officer
Cici Enterprises, LP
1080 W. Bethel Rd.
Coppell, Texas 75019
Dear Mr. Anderson:
We agree to the inclusion in the Franchise Disclosure Document issued by Cici Enterprises, LP
on March 26, 2012 of our report, dated March 26, 2012, relating to our audit of the consolidated
financial statements of Cici Enterprises, LP.
PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP, 2001 Ross Avenue. Suite 1800. Dallas. Texas 75201
T: (214) 999-1400. F: (214) 754-7991. www.pwc.com/us
F R A N C H I S E D I S C L O S U R E DOCUMENT
CICI ENTERPRISES, LP
A DELAWARE LIMITED PARTNERSHIP
1080 W. BETHEL ROAD
COPPELL, TEXAS 75019
(972) 745-4200
[email protected]
www.cicispiz2a.com
www.facebook.com/cicis
www.twitter.com/cicis_pizza
The franchise is for restaurants specializing in pizza and other Italian foods and operating as
"CiCi's Pizza" ("CiCi's Pizza Restaurant" or "Restaurant") or for units offering carry-out pizzas
operating as "CiCi's To Go" ("CiCi's To Go Unit", "To Go Unit" or "Unit").
CiCi's Pizza Restaurants: The total initial investment necessary to begin operation of your
CiCi's Pizza Restaurant ranges from $44^^4^MMQ1 to $744^W3.222i5Sfl* These totals include
approximately $47^j921iiMfill to $44>M«-2fiL2S2 that must/may be paid to us or our affiliate.
Developers will also pay a development fee equal to the total of 100% of the initial franchise fee for your
first Restaurant and 40% of the initial franchise fee for each additional Restaurant. The portion of your
development fee that is allocable to each Restaurant will be credited against the initial franchise fee due
for that Restaurant.
CiCi's To Go Units. The total initial investment necessary to begin operation of your CiCi's To
Go Unit ranges from S221i?§6203.818 to $322371.306.014. These totals include approximately
$995881S4*4S4 to $112,4202L^3fl that must/may be paid to us or our affiliate. Developers will also pay
a development fee equal to the total of 100% of the initial franchise fee for your first CiCi's To Go Unit
and 40% of the initial franchise fee for each additional CiCi's To Go Unit. The portion of your
development fee that is allocable to each CiCi's To Go Unit will be credited against the initial franchise
fee due for that CiCi's To Go Unit.
This disclosure document summarizes certain provisions of your Franchise Agreement and
Development Agreement and other information in plain English. Read this disclosure document and all
accompanying agreements carefully. You must receive this disclosure document at least 14 calendar
days before you sign a binding agreement with, or make any payment to, the franchisor or an affiliate in
connection with the proposed franchise sale. Note, however, that no governmental agency has
verifled the information contained in this document.
You may wish to receive your disclosure document in another format that is more convenient for
you. To discuss the availability of disclosures in different formats, contact Lori Bolin 972-745-9388 or
Angie Daniels 972-745-9316, 1080 W. Bethel Road, Coppell, Texas 75019, 972-745-4200.
DAL01:1156051.9J
079684.0103
The terms of your contract will govem your franchise relationship. Don't rely on the disclosure
document alone to understand your contract. Read all of your contract carefully. Show your contract
and this disclosure document to an advisor, like a lawyer or accountant.
Buying a franchise is a complex investment. The information in this disclosure document can
help you make up your mind. More information on franchising, such as "A Consumer's Guide to Buying
a Franchise," which can help you understand how to use this disclosure document, is available from the
Federal Trade Commission. You can contact the FTC at I-877-FTC-HELP or by writing to the FTC at
600 Pennsylvania Avenue, NW, Washington, DC 20580. You can also visit the FTC's home page at
www.ftc.gov for additional information. Call your state agency or visit your public library for other
sources of information on franchising.
There may also be laws oh franchising in your state. Ask your state agencies about them.
Date of Issuance: March 25, 2011, as amended June 10, 2011.'^
DALO 1:4
079684.0103
STATE COVER PAGE
Your state may have a franchise law that requires a franchisor to register or file with a state
franchise administrator before offering or selling in your state. REGISTRATION OF A FRANCHISE
BY A STATE DOES NOT MEAN THAT THE STATE RECOMMENDS THE FRANCHISE OR HAS
VERIFIED THE INFORMATION IN THIS DISCLOSURE DOCUMENT.
Call the state franchise administrator listed in Attachment I for information about the franchisor
or about franchising in your state.
MANY FRANCHISE AGREEMENTS DO NOT ALLOW YOU TO RENEW
UNCONDITIONALLY AFTER THE INITIAL TERM EXPIRES. YOU MAY HAVE TO SIGN A
NEW AGREEMENT WITH DIFFERENT TERMS AND CONDITIONS IN ORDER TO CONTINUE
TO OPERATE YOUR BUSINESS. BEFORE YOU BUY, CONSIDER WHAT RIGHTS YOU HAVE
TO RENEW YOUR FRANCHISE, IF ANY, AND WHAT TERMS YOU MIGHT HAVE TO ACCEPT
IN ORDER TO RENEW.
Please consider the following RISK FACTORS before you buy this franchise:
1.
THE FRANCHISE AND DEVELOPMENT AGREEMENTS REQUIRE YOU TO RESOLVE
DISPUTES WITH US BY MEDIATION AT OUR CORPORATE HEADQUARTERS AND
PERMIT YOU TO SUE CICI'S ONLY IN TEXAS, EXCEPT FOR CLAIMS ARISING UNDER
STATE FRANCHISE LAWS. (SEE ITEM 17 AND THE STATE ADDENDA TO THIS
DISCLOSURE DOCUMENT). OUT OF STATE MEDIATION AND LITIGATION MAY
FORCE YOU TO ACCEPT A LESS FAVORABLE SETTLEMENT FOR DISPUTES. IT MAY
ALSO COST MORE TO MEDIATE WITH US AT OUR CORPORATE HEADQUARTERS
AND TO SUE US IN TEXAS THAN IN YOUR HOME STATE.
2.
THE FRANCHISE AND DEVELOPMENT AGREEMENTS STATE THAT TEXAS LAW
GOVERNS THE AGREEMENT, AND THIS LAW MAY NOT PROVIDE THE SAME
PROTECTIONS AND BENEFITS AS LOCAL LAW. YOU MAY WANT TO COMPARE
THESE LAWS. STATE FRANCHISE REGISTRATION AND RELATIONSHIP LAWS
OFTEN PROVIDE THAT CHOICE OF LAW PROVISIONS ARE VOID OR SUPERSEDED
TO THE EXTENT THAT THE CHOICE OF A DIFFERENT STATE'S LAW WOULD DENY
A FRANCHISEE THE PROTECTIONS IT WOULD BE ENTITLED TO UNDER LOCAL
LAW.
YOU SHOULD INVESTIGATE WHETHER YOUR PURCHASE OF THE
FRANCHISE FALLS UNDER THE JURISDICTION OF A STATE REGISTRATION OR
RELATIONSHIP LAW.
3.
THERE MAY BE OTHER RISKS CONCERNING THESE FRANCHISES.
We use the services of one or more franchise brokers or referral sources (including our existing
developers and franchisees) to assist us in selling our franchise. A franchise broker or referral
source represents us, not you. We pay this person a fee for selling our franchise or referring you
to us. You should be sure to do your own investigation of franchise.
See the following state eflective date summary page for state effective dates.
DALO 1:11S60S1.91194789.3
079684.0103
CICI ENTERPRISES, LP
STATE EFFECTIVE DATE SUMMARY PAGE
The following states require that the Franchise Disclosure Documeni be registered or filed with the
state, or be exempt from registration: Califomia, Hawaii, Illinois, Indiana, Maryland, Michigan,
Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington and
Wisconsin.
This Franchise Disclosure Document is registered, on file or exempt from registrafion in the
following states having franchise registration and disclosure laws, with the following effective
dates:
California
Effective Date: March 25,3011;
Illinois
Effective Date: March 28, 2011
Indiana
Effective Date: March 25, 301126.^1112
Maryland
Effective Date: Anril 6. 3011
Michigan
Effective Date: March 25,2011;
Minnesota
Effective Date: March 39, 2011_
.2012
New York
Effective Date:
.2m
North Dakota
Effective Date: March 38, 2011^
South Dakota
Effective Date: March 38, 301L
Virginia
Effecfive Date: April 8. 3011
Wisconsin
Effective Date: March 38, 3011
DALOl :4453200rH19?i3fill
079684.0103
.2012
.2012
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A T R A N S F E R O F OWNERSHIP O F A F R A N C i n S E .
SUBDIVISION D O E S NOT P R E V E N T A FRANCHISOR F R O M FXERCTSTNG A R I G H T O F
FTRST R E F I J S A L T O P U R C H A S E T H E F R A N C H I S E . GOOD C A U S E SHAl
IS NOT L I M I T E D T O :
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T H E F A C T T H A T T H E PROPOSED T R A N S F E R E E TS A COT
>R OR SUBFRANCHISOR.
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T H E UNWTLLTNGNESS O F T H E PROPOSED
WRITING TO COMPLV WITH A L L L A W F U L OBLIG.
TRANSFEREE TO
T O P A Y ANV SUMS OWING T O T H E F R A
FRANCmSK AQREEMENT KXISTTNfi AT THK
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A P R O V I S I O N T H A T REOUTOES T H E F R A N C H I S E E T O R E S E L L T O T H E
FRANCmSOR ITEMS THAT ARK NOT UNIQUEEY JDENTiriEP WITH
T O A FRANCHISOR A R I G H T O F FTOST R E F U S A L T O P U R C H A S E T H E ASSETS O F A
-HF. SAME. T E R M S AND CONDITIONS AS A BONA F I D E THTOD P A R T Y
P U R C H A S E T H O S E ASSETS. NOR DOES THIS SUBDIVISION
P R O H I B I T A PROVISION T H A T GRANTS T H E FRANCHISOR T H E RT<
T H E ASSETS O F A F R A N C H I S E F O R T H E M A R K E T OR API
E HAS BREACHED T H E LAWl
TFNT AND HAS F A H . E D T O C U R E T H E B R E A C H IN T H E MANNER
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PERMTTS T l
I N D r a E C T L V C O N V E Y . ASSIGN. OR O T H E R W I S E T R A N S F E R F
F I T L F H J . C O N T R A C T U A L O B L I G A T I O N S T O T H E F R A N C H I S E E UNLESS
THE FACT THAT
S N O T COT
TENT B Y T H E A T T O R T
DALO 1:11S60S4.Q1194789.3
079684.0103
PROVISTON
TFRTNG ON F H . E Wl
T. APPROVAL. R E C O M M E N D A T I O N . OR
CICI'S P I Z Z A FRANCHISE DISCLOSURE DOCUMENT
TABLE OF CONTENTS
Item
Page
ITEM 1
THE FRANCHISOR AND ANY PARENTS, PREDECESSORS, AND AFFILIATES
3
ITEM 2
BUSINESS EXPERIENCE
7
ITEM 3
LITIGATION
8
ITEM 4
BANKRUPTCY
10
ITEM 5
INITIAL FEES
10
ITEM 6
OTHER FEES
14
ITEM 7
ESTIMATED INITIAL INVESTMENT
212fi
ITEM 8
RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES
2625
ITEM 9
FRANCHISEE'S OBLIGATIONS
312fl
ITEM 10
FEMANCING
3312
ITEM 11
FRANCHISOR'S OBLIGATIONS
35M
ITEM 12
TERRITORY
45^4
ITEM 13
TRADEMARKS
4811
ITEM 14
PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION
50^2
ITEM 15
OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE
LICENSED BUSINESS
ITEM 16
RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL
S2il
ITEM 17
RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION
5451
ITEM 18
PUBLIC FIGURES
64fi2
ITEM 19
FINANCIAL PERFORMANCE REPRESENTATIONS
60fil
ITEM 20
OUTLETS AND FRANCHISEE INFORMATION
?4M
ITEM 21
FINANCIAL STATEMENTS
8322
DAIJ)I:I194789.3
079684.Q103- i -
ITEM 22
CONTRACTS
832S
ITEM 23
RECEIPTS
832S
EXHIBITS
A
-
FINANCIAL STATEMENTS
B
B-1
B-2
-
DEVELOPMENT AGREEMENT AND STATE AMENDMENTS
CICI'S TO GO ADDENDUM TO DEVELOPMENT AGREEMENT
INCENTIVE PROGRAM AMENDMENTS TO DEVELOPMENT AGREEMENT
C
C-l
C-2
C-3
-
FRANCHISE AGREEMENT AND STATE AMENDMENTS
CICrS TO GO ADDENDUM TO FRANCHISE AGREEMENT
INCENTIVE PROGRAM AMENDMENTS TO FRANCHISE AGREEMENT
INVESTMENT PROGRAM AMENDMENT TO FRANCHISE AGREEMENT
D
D-1
-
LIST OF FRANCHISED CICPS PIZZA RESTAURANTS
LIST OF FRANCHISED CICI'S TO GO UNITS
E
-
E-1
-
LIST OF CICI'S PIZZA RESTAURANT FRANCHISEES WHO HAVE LEFT THE SYSTEM
IN TFIE LAST FISCAL YEAR ENDING DECEMBER 36^^0*025.^211
LIST OF CICI'S TO GO UNIT FRANCHISEES WHO FL\VE LEFT THE SYSTEM IN THE
LAST FISCAL YEAR ENDING DECEMBER UrmQZ^x2Dll
F
-
WORK EVALUATION AGREEMENT
G
-
POWERS
m
-
CONFIDENTIALITY AGREEMENT (MANUALS)
Jl
-
JMC EQUIPMENT FINANCING DOCUMENTS (PROMISSORY NOTE, GUARANTY AND
SECURITY AGREEMENT)
KJ
-
FORM OF GENERAL RELEASE
tK
-
GIFT CARD PROGRAM CONSENT FOR ACH DEBITS AND CREDITS
ML
-
GUIDELINES FOR INVESTMENT PROGRAM
OE—ATTORNEY—(FOR—LEASES,—TELEPHONE,—TAXES—ANDASSIGNMENT OF LEASE
ATTACHMENTS
I
II III -
LIST OF STATE ADMINISTRATORS
AGENTS FOR SERVICE OF PROCESS
STATE ADDENDA TO THE DISCLOSURE DOCUMENT
DAL01:I194789.3
0796S4 0in.3 - i i -
ITEMl
THE FRANCHISOR AND ANY PARENTS, PREDECESSORS, AND AFFILIATES
The Franchisor and any Parents. Predecessors, and AfTiliates
The Franchisor is CiCi Enterprises, LP, referred to in this disclosure document as "CiCi's,"
"we," "us" or "our." To simpliiy the language in this disclosure document, we refer to the person
interested in buying the franchise as "you" or "your". If you are a corporation, limited liability company
or partnership, certain provisions of the Franchise and Development Agreements will also apply to your
owners. These will be addressed in this disclosure document where appropriate.
We were originally formed as a Texas corporation named CiCi Enterprises, Inc. ("CEI") on
December 13, 1984. We were converted from a Texas corporation to a Delaware limited partnership in a
statutory conversion on September 22, 2003 as a part of a management buyout (the "Conversion"). Our
sole general partner is CiCi GP, LLC, which is a Delaware limited liability company formed on August
25, 2003 ("General Partner"). All partnership interests are held by Awesome Acquisition Company
("AAC"). Our General Partner and AAC have the same principal place of business as we do.
We maintain our principal place of business at 1080 W. Bethel Road, Coppell, Texas 75019. We
do business under the service marks "CiCi's" and "CiCi's To Go" and other marks we may develop (the
"Marks"). Our agents for service of process in the states that require franchise registration are listed in
Attachment II.
We operate and sell franchises for CiCi's Pizza Restaurants that offer value-priced pizza,
desserts and other Italian foods under the trademark "CiCi's". The Restaurants feature an "All You'd
Like to Eat" buffet and offer dine-in, catering, and carry-out services. The Restaurants do not currently
offer delivery services and you may not provide delivery without our written consent.
CEI opened the first CiCi's Pizza Restaurant in Dallas, Texas in approximately March 1985 and
began offering franchises in May 1988. Since the Conversion, we have continued to offer franchises of
the type previously offered by CEI.
We also operate and sell franchises for CiCi's To Go Units that offer value-priced pizza, desserts
and related Italian foods for carry-out under the trademark "CiCi's To Go". . The Units also offer
catering, but currently have no dine-in or delivery service. You may not provide delivery services
without our written consent.
Currently, we own and operate 1 CiCi's To Go Unit located in Irving, Texas, which we opened
in October 2004. We began offering franchises for CiCi's To Go Units as of January 2006.
We are not engaged in any other business and have never offered franchises for any lines of
business other than those discussed above.
References to a "Facility" or to "Facilities" in this disclosure document include both CiCi's Pizza
Restaurants and CiCi's To Go Units, unless otherwise stated.
Our affiliate, CiCi Services, LLC ("CiCi Services"), issues CiCi's gift cards and maintains the
central account for funds attributable to activated gift cards. CiCi Services shares our principal business
address. It does not offer, and has never offered, franchises in any line of business.
DALO 1:11S60S4.911947«9.3
079684.0103
- 3-
Our affiliate, JMC Restaurant Distribution, LP ("JMC"), provides food products, equipment and
other items to our company-owned and franchised Facilities. (See Items 5, 7 and 8.) JMC's principal
business address is 1080 W. Bethel Road, Coppell, Texas 75019. JMC does not offer, and has never
offered, franchises in any line of business.
Except as described above, we have no parents, predecessors or affiliates required to be disclosed
in this Item I .
The Franchise
We offer franchises for CiCi's Pizza Restaurants and CiCi's To Go Units that operate under the
CiCi's System. The System includes exterior and interior design, decor, color scheme and fumishings;
special recipes and menu items; uniform standards for operations; quality and uniformity of products and
services; procedures for inventory, management and financial control; training and assistance; and
advertising and promotional programs. We may change any of these items in our discretion.
We offer CiCi's FiTza Restaurant franchises and CiCi's To Go Unit franchises to individuals and
entities that meet our qualification requirements.
If your franchise is for a CiCi's Pizza Restaurant, you will sign our Franchise Agreement. If your
franchise is for a CiCi's To Go Unit, you will sign the Franchise Agreement and the CiCi's To Go
Addendum to Franchise Agreement, which adapts certain terms of the Franchise Agreement for CiCi's
To Go Units. Our current standard form of Franchise Agreement and CiCi's To Go Addendum to
Franchise Agreement are included in this disclosure document as Exhibits C and C-L
The Franchise Agreement gives you the right to establish and operate either 1 Restaurant or 1
CiCi's To Go Unit at a specified location. In the Franchise Agreement, we identify some parties as your
"Principals." Ifyou are an individual and are married, your spouse will be a Principal. If you are not an
individual, your Principals include all of your officers and directors (including the officers and directors
of your general partner, if applicable) whom we designate as your Principals, everyone who holds an
ownership interest in you and in any entity that directly or indirectly controls you, and any other person
or entity you control, that coritrols you, or that is under common control with you.
We, you, and those of your Principals we designate as your Controlling Principals will sign the
Franchise Agreement. In most instances we will designate your principal equity owners and executive
officers as Controlling Principals. By signing the Franchise Agreement, your Controlling Principals
agree to be individually bound by certain obligations in the Franchise Agreement (including covenants
conceming confldentiality and non-competition) and to personally guarantee your perfonnance under the
Franchise Agreement. If you have a commonly controlled afflliate that operates a CiCi's Pizza Restaurant
or CiCi's To Go Unit, we may also require you and your affiliate to guaranty each other's performance.
You must appoint one of your Controlling Principals who meets our requirements and whom we
approve as your Managing Principal. Your Managing Principal is the main individual responsible for
your business. You must also appoint a person whom we approve and who meets our requirements to
directly oversee the operations of the franchised Facility. We call this person an Operator. He or she may,
but need not be, the same person as your Managing Principal. (See Items 11 and 15.)
We also offer qualified persons or entities the right to enter into a development agreement (the
"Development Agreemenf) to develop 1 or more Restaurants or Units within a specifically described
geographic territory (the "Development Area"). (See Item 12.) If you wish to develop CiCi's Pizza
Restaurants, you will sign our Development Agreement. If you wish to develop CiCi's To Go Units, you
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must sign the Development Agreement and the CiCi's To Go Addendum to our Development Agreement,
which adapts certain terms of the Development Agreement for CiCi's To Go Units. Our current standard
form of Development Agreement and the CiCi's To Go Addendum to Development Agreement are
included in this disclosure document as Exhibits B and B-1 respectively.
A Development Agreement will contemplate the development of either CiCi's Pizza Restaurants
or CiCi's To Go Units, but not both. Your development of CiCi's To Go Units will not satisfy any
development obligations that you have for CiCi's Pizza Restaurants and vice versa. The person or entity
executing the Development Agreement is the "Developer." The Development Agreement contains
concepts like "Principals," "Controlling Principals," and "Managing Principal" that are similar to those
in the Franchise Agreement. The Developer's Controlling Principals must personally guarantee the
Developer's obligations under the Development Agreement and must guarantee the obligations of the
Franchisee under each Franchise Agreement executed under the Development Agreement. If a
Developer has a commonly controlled affiliate, we may also require you and your afflliate to guaranty
each other's performance.
The Development Area will be determined before executing the Development Agreement and
will be described in Attachment D to the Development Agreement. The size of the Development Area
will vary depending upon local market conditions and the number of Facilities to be developed. (See Item
12.) You must develop the number of CiCi's Pizza Restaurants or CiCi's To Go Units contemplated by
the Development Agreement in the Development Area according to a development schedule and must
enter into a separate Franchise Agreement for each Facility established. The Franchise Agreement for
each Facility developed under the Development Agreement will be the form of Franchise Agreement that
we are then offering to new franchisees, except that the initial franchise fees will be as provided in the
Development Agreement.
For a limited time, we are offering qualified developers a "Development Incentive Program," the
terms of which differ depending on whether you are signing a new Development Agreement or have an
existing Development Agreement with us and on the number of Restaurants to be developed under the
Development Agreement. If you meet our qualifications and are approved to participate in the program,
you may qualify for reduced initial franchise fees and/or reduced royalty rates for a limited period of time
ifyou open your Restaurant(s) on or before certain scheduled deadlines. (See Items 5, 6, and 7.) The
Development Incentive Program does not apply to relocations, transfers, non-traditional developments,
CiCi's To Go Units, or any intemational developments. The program is also limited to certain
geographic markets (currently, New York, Pennsylvania, Florida, Georgia, Wisconsin, Illinois, Indiana,
Nevada, Utah, Colorado, Arizona, and the Los Angeles, San Diego, Bakersfield, and Santa Barbara-Santa
Maria-San Luis Obispo Designated Market Areas).
For a limited time and subject to the maximum available program - amount of
$5.000.00.5.000.000. we are also offering an "Investment Program" in select markets to qualified new
muhi-unit Developers who agree to develop 6 or more new Restaurants over an agreed-upon period not
to exceed 5 years. I f you wish to participate and we approve you as qualified, we or one of our
subsidiaries or afflliates will make an equity investment of up to $100,000 in each of the entities formed
to operate each Restaurant. We wili receive a non-voting ownership interest in each entity proportionate
to our equity investment. Our ownership interest will also be given preference to the interests of other
equity owners upon sale or dissolution. (See Items 10, 17, and 20.) The Investment Program does not
apply to relocations, transfers, non-traditional developments, CiCi's To Go Units, or any intemational
developments. The program is also limited to certain geographic markets (currently, Utah and select
markets in Southem Califomia and South Florida). You are ineligible to participate in this program if
you participate in the Development Incentive Program.
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We anticipate offering franchises for non-traditional locations, such as airports, colleges,
universities, military or other govemmental facilities, office or in-plant food service facilities, or within
an existing "big box" retail site such as a shopping mall, supermarket, mass merchandiser, grocery store,
or other fast-food type operations such as food courts and other venues operated by a master
concessionaire or contract food service provider, or other large retail venues ("Non-Traditional
Locations"). Franchises granted for Non-Traditional Locations will be established by the execution of a
Franchise Agreement that is modified by an addendum reflecting the terms that apply to Non-Traditional
Locations. We also anticipate offering franchises intemationally. Intemational agreements will differ
from the agreements included in this disclosure document.
In this disclosure document, the terms "Principals", "Controlling Principals" and "Managing
Principal" include those persons having similar obligations identified in both the Development
Agreement and Franchise Agreement, and the terms "you" and "your" also include the developer under
the Development Agreement, unless we have noted otherwise. Any reference to the "Development
Agreemenf or "Franchise Agreemenf includes, for CiCi's To Go Units, the related form of CiCi's To
Go Addendum and any reference to the "Agreements" means the Development Agreement and the
Franchise Agreement, as applicable.
The terms of Franchise Agreements and Development Agreements we have previously offered
may differ from the terms of the Franchise Agreement and Development Agreement offered by this
disclosure document.
Competition
The market for food services, including the pizza segment of that market, is well-established and
highly competitive. There is active price competition among food service businesses, as well as
competition for management personnel and for suitable and attractive commercial real estate sites. You
must expect to compete with many other businesses offering comparably priced food and beverages.
Competitors may be locally-owned or large regional or national chains. The food services business is
also affected by changes in consumer taste, demographics, traffic patterns and economic conditions. We
believe our competitive position will be enhanced by our operational format and we intend to pursue
controlled expansion in select markets.
Industry Specific Regulation
The food services industry is heavily regulated. Many of the laws, rules and regulations that
apply to business generally, such as the Americans With Disabilities Act, Federal Wage and Hour Laws
and the Occupational Safety and Health Act, also apply to food services businesses. However, other
laws, mles and regulations have particular applicability to food services businesses. The U.S. Food and
Dmg Administration, the U.S. Department of Agriculture and state and local health departments
administer and enforce laws and regulations that govem food preparation and service and restaurant
sanitary conditions. State and local agencies inspect food services businesses to ensure that they comply
with these laws and regulations.
The federal Clean Air Act and various implementing state laws require certain state and local
areas to meet national air quality standards limiting emissions of ozone, carbon monoxide and particulate
matters, including caps on omissions from commercial food preparation. Some areas have also adopted
or are considering proposals that would regulate indoor air quality and restrict smoking. Some
jurisdictions also require the posting of nutritional information and calories.
You should consider these laws and regulations when evaluafing your purchase of a franchise.
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ITEM 2
BUSINESS EXPERIENCE
Chief Executive Officer: Michael R. Shumsky
Mr. Shumskyjoined CiCi's as our Chief Executive Officer effective Septemberr46 2009. Before
joining us, Mr. Shumsky served as Chief Executive Officer of La Madeleine Restaurant Inc. in Dallas,
Texas, fi-om January 2008 to September 2009. From May 1999 to May 2008, Mr. Shumsky served as
Chief Executive Officer and Chairman of Johnny Rockets Inc. in Lake Forrest, California. Mr. Shumsky
was between positions from June 2007 to December 2007.
Manager. Chief Strategy Officer and Chief Financial Officer: J. Forbes Anderson
Effective January-4^ 2010, Mr. Anderson serves as our Chief Strategy OfficerT in addition to his
position as Chief Financial Officer, which he resumed on September 2011. Mr. Anderson
previouslv served as Chief Financial Officer from September 2003 to .lanuarv 2010. Since
September 2003, he has also served as a Manager of our General Partner. From September 3003 to
January' 1^ 3010, Mr. Anderson scre ed as our Senior Vice President and Chief Financial Officer.
Mr. Anderson served as Director, Vice President and Chief Financial Officer of CEI from October 1996
until September 2003.
Ghicf-Financial Officon TimTAIba;
Effective Januor>' 1, 3010, Mr. Alba series as our Chief Financial Officer.—From
September 3003 to January 1, 3010 Mr. Alba scrs^cd as our Vice President and Corporate
Controller. Mr. Alba scr^'cd as our Corporate Controller from Januar)^ 1998 through September
Manager: Robert A. Kulick
Mr. Kulick has served as a Manager of our General Partner since September 2003. He was one
ofthe Directors of CEI from May 1996 until September 2003. Mr. Kulick has also served with our
afflliate JMC or its predecessor from March 1992, becoming its President in January 2000.
Chief Development Officer: William M. Spae
Since August 30, 2010, Mr. Spae has served as our Chief Development Officer. From September
2005 to December 2009, Mr. Spae served as CEO of Eatdrink, LLC, a multi-unit franchisee of Taco
Bueno restaurants in Texarkana, Texas. Mr. Spae served as CEO of Dallas, Texas based Palm Beach
Tan, Inc. from May 2004 until April 2005. From July 2000 until May 2004, Mr. Spae served in various
executive capacities at several brands of the Metromedia Restaurant Group located in Piano, Texas,
including as President of Bennigan's Grill and Tavem, President and Chief Operafing Officer of Steak &
Ale, and as Senior Vice President of Operations for Ponderosa and Bonanza Steakhouses.
Chief Marketing Officer: Nancy L. Hampton
Since September 7, 2010, Ms. Hampton has served as our Chief Marketing Officer. From August
2009 to September 2010, Ms. Hampton served as the owner and President of Folio Co, a brand
consultancy company based in Piano, Texas. Previously, Ms. Hampton worked with Brinker
Intemational, Inc. in Dallas, Texas from 1987 to August 2009 in various marketing management
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positions, most recently as Vice President o f Brand Strategy for Romano's Macaroni Grill (from April
2005 to August 2009).
Senior Vice President of Brai
Excellence.
M r . Smith was promoted ^ft ^^f}ior Vice President of Brand
November 30. 2011. M r . Smith served as our Vice President
ir Vice President of Operations from .Tanuarv 2007 to
us in September 1999. serving first as a District Manager, and a
'cr before hcin^ promoted to Director of Operations in Sc|
Effective January 1. 2012. M r . Goodman was promoted from Dii
President of Brand Excellence. M r . Goodman served as Director of Brand Excellent
2007 to December 31. 201L Frnm .Taniiarv 2006 throuph Mav 2007 M r . Goodman
It Rita's Water Tee as Vice President of Operations and Training and was between
positions from M a v 2007 to November 2007 when he joined CiCi's.
Vice President p f Construction: Mark D. Kiefer
Mr. Kiefer has served as our Vice President of Construction since September 2003. He served as
CEI's Vice President o f Construction from January 2001 until September 2003. From June 2000 until
January 2001 he served as Director of Constmction for Posado's Cafe in Euless, Texas.
Vice President o f Franchise Development: Raymond Bruce Evans I I
Since January 18, 2011, Mr. Evans has served as our Vice President of Franchise Development.
He served as Vice President of Franchise Development for Wingstop Restaurants, Inc. in Dallas, Texas
from June 2007 until August 2010. From January 2001 to June 2007, Mr. Evans worked at Wingstop in
the Franchise Recruitment and Development area, and as Director of Franchising for Wingstop.
Vice President of
BFOI
llcncei Kyle Smith
Effective January' 1, 3010, M r . Smith began serving as our Vice President of Brand
ExccllGncc. He scr^^cd as our Vice President of Operations from January 3007 to January 1^ 3010.
M r . Smith joined us in September 1999, s c n i n g first as a District Manager, and a Regional
Manager before being promoted to Director of Operations in September 3003.
Vice President of Franchise Services: Steve Hawter
Since January 1, 2010, Mr. Hawter has served as our Vice President of Franchise Services. Mr.
Hawter served as Vice president of Training from January 2007 to January 1, 2010. Mr. Hawter served
as our Director o f Training from July 2003 through December 2006. Mr. Hawter served as a District
Manager for CEI from November 2000 until June 2003 and was based in Atlanta, Georgia.
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ITEM 3
LITIGATION
Pending Litigation
None.
Past Litigation
Duality Pizza Partners of SA. LLC v. CiCi Enterprises. LP (Case No. 08-10758) was filed on
September 3, 2008, in the 14th Judicial District Court, Dallas County Texas. Plaintiff, which currently
operates one franchised CiCi's Pizza Restaurant, brought suit alleging, among other things, fraud,
negligent misrepresentation, deceptive trade practices and tortious interference in connection with the
selection of a site for Plaintiffs proposed second CiCi's Pizza Restaurant franchise to be opened
pursuant to Plaintiffs development obligations under a development agreement with us. Plaintiff sought
a declaratory judgment and actual, consequential and punitive damages as well as attomeys' fees. We
filed a counterclaim against Plaintiff and a third-party claim against Plaintiffs guarantor seeking a
declaratory judgment that we acted in accordance with the development agreement with respect to site
selection. We also sought our attorney's fees and court costs. On August 5, 2010, the parties reached a
confidential settlement of this matter and agreed to dismiss all claims and to execute mutual releases.
Under the terms of the settlement, the Development Agreement was terminated, CiCi's regained the
territory and retained the development fee, and paid Plaintiff $217,000 to help defray its attorney's fees.
In re: Neuro Diagnostics. Inc: CiCi Enterprises. LP v. Neuro Diagnostics. Inc.. d/b/a Roswell
Pizza Buffet f/k/a Danny's Pizza: and Ahmad Khosravinezhad: (Case No. 08-83949; Adversary
Proceeding No. 08-9062) was filed on December 11, 2008 in the United States Bankruptcy Court for the
Northem District of Georgia, Atlanta Division. We brought suit against a former franchisee in Roswell,
Georgia, and its guarantor alleging, among other things, trademark violations/unfair competition,
trademark dilution, misappropriation of trade secret and proprietary information, numerous breaches of
contract and of covenants not to compete, and conversion in connection with their continued operation of
the restaurant following our termination of the franchise agreement. We sought money damages for
amounts owed under the franchise agreement and for injunctive relief to enforce post-termination
obligations. This case resulted in the permanent closure of the restaurant and was dismissed following the
restaurant's closure.
Texas Capital Ventures. LLC: J. Mark Griffin and Scott Griffin v. CiCi Enterprises. LP: JMC
Restaurant Distribution. LP: and CIT Small Business Lending Corp. (Case No. 2008-CI-13204) was filed
on August 18, 2008, in the 131st Judicial District Court, Bexar County Texas. The plaintiffs are a former
CiCi's franchisee and its principals, whose franchise agreement was terminated by us in May 2008
following franchisee's abandonment of its CiCi's To Go Unit. Following our demand for payment of
damages under the franchise agreement, the plaintiffs brought this suit alleging fraud, violation of
antitmst law, deceptive trade practices and breach of contract in connection with the selection of a site
for plaintiffs' CiCi's To Go Unit franchise and the purchase and sale of equipment to be used in the
CiCi's To Go Unit. We settled this matter on March 27, 2009 through a mutual dismissal and release of
claims and without paying any amount to the plaintiffs.
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CiCi Enterprises. LP v. Donley L. Despain. M.D.S. Pizza Company Pizza Company^ L.L.C.
Plaza Pizza. Inc. and DelaDes. LLC (Case No. 04-5784) filed on June 23, 2004 in the 44th Judicial
District Court, Dallas County Texas. We brought suit against our franchisees in San Antonio, Texas, and
Albuquerque and Santa Fe, New Mexico, and their guarantor seeking a declaratory judgment that certain
disputed acts either were or were not in breach of the agreements. We further sought money damages for
amounts owed under the New Mexico agreements and for injunctive relief to enforce post-termination
obligations. Defendants asserted counterclaims alleging breach of contract, tortious interference with
contract, antitrust, and misrepresentation. Defendants sought damages of at least $6 million. We filed a
comprehensive motion for summary judgment on all claims presented in this matter, however, before the
hearing on this motion, Donley Despain filed for bankruptcy in the United States Bankmptcy Court for
the Westem District of Texas (Case No. 06-51554) on August 17, 2006. This case was removed to the
bankmptcy court and proceeded as an Adversary Proceeding (Adv. No. 07-5036). We timely filed a
proof of claim in the bankmptcy in the amount of $1,373,311.13. On October 9, 2007, the parties
reached a settlement and agreed to dismiss all claims and to execute mutual releases. Our proof of claim
was not included in the release and was allowed in the bankruptcy case as an unsecured claim. As a part
of the settlement, we agreed to pay the sum of $45,000 to the bankruptcy trustee.
Minhas Bidiwala and Nazleen Bidiwala. husband and wife, and Saraj Bidiwala v. CiCi
Enterprises. Inc.: Case No. 3:03-CV-2360-G; in the United States District Court Northern District of
Texas Dallas Division. On August 6, 2003, plaintiffs brought suit in the United States District Court
Western District of Oklahoma alleging discrimination and fraud and misrepresentation in the sale of a
franchise. Plaintiffs sought damages in excess of $1 million. Trial was set for June 6, 2005. On June 3,
2005, we settled without admitting to any of the allegations made by the plaintiffs. In consideration for
the releases that we obtained under the settlement, we paid the plaintiffs $25,000 for their out-of-pocket
costs and attomeys' fees related to the claims made by the plaintiffs.
Actions Commenced Against Franchisees During the Last Fiscal YcarFranchisor ^yiitiqted
Litigation During the Last Fiscal Year
During our 2010 fiscal year, wc initiated 3 lawsuits against former franchisees:
CiCi Enterprises, LP v. Wendell K. Jilcs, Donald Staples, AZZIPOl, Inc., and KJC Foods
L L C (Case No. 10 11196) was filed on October 37, 3010, in the 398th Judicial District Court,
Dftllas-GountyrTcxas. Wc brought suit against two former franchisees in Carrollton, Georgia and
Newnan^-Georgia,—their-guarantor and business partner alleging trademark infringement andunfair compctition»-trademark-dilution," misappropriation of trade secrets, breach of contract,
injunctive rclicf^-and-dcclaratory-judgment in connection with their continued operation of-thcrcstaurants following our-tcrminatiein>f^he franchise-agreements. Wc are seeking money damagesfor amounts owed under the franchise agreements and for injunctive relief to enforce post
termination obligations.—Wc arc also sccldng attorney's fees and court costs.—Wc have been
granted a default judgment including a declaratory judgment against all defendants in this matter.
CiCi Enterprises^ LP v. Wendell Kcit
Is, L L C (Case No. 10 11548) was
filed on November 5, 2010, in the 398th Judicial Dist
y, Texas. Wc brought
suit against a former franchisee in Aust
-ond-its-guarantor alleging trademark
infringement and unfair competition, trndcmi
m,-misappropriation of trade secrets,
their continued
breach of contract, injunctive relief, and
operation ofthe restaurant following our termination of the franchise agreement. We arc sccldng
money damages for amounts owed under the franchise agreement and for injunctive relief to
ist termination obligations. Wc arc also sccldng attorney's fees and court costs. Wc have
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been granted a default judgment including a declarator)' judgment and permanent injunction
against all defendants in this matter.
None.
Other than the above actions, no litigation is required to be disclosed in this Item.
Califomia residents, see the Califomia Addendum to this disclosure document for additional
disclosures required by Califomia law.
ITEM 4
BANKRUPTCY
No bankruptcy is required to be disclosed in this Item.
ITEMS
INITIAL FEES
Initial Franchise Fee — CiCi's Pizza Restaurants: You must pay us an initial franchise fee when you
sign the Franchise Agreement for a CiCi's Pizza Restaurant. For your first Restaurant, the initial
franchise fee is $30,000. If you or a related entity establish additional Restaurants and are not in default
under any agreements with our afflliates or us, then the initial franchise fee is $25,000. A related entity
is one that shares a common managing principal, approved by us under our then-current policies
(including execution of a conflicts waiver letter) to serve as the managing principal for multiple
franchisees.
Under the Development Incentive Program:
The initial franchise fee is $20,000 per Restaurant if you and CiCi's sign a new Development
Agreement for I or 2 Restaurants before September 1, 30142012 and you agree to open your 1st
Restaurant on or before September 1, 20122013 and your 2nd Restaurant, if applicable, on or
before September 1. 3013.Junc 1. 2014. You will receive a $10.000 refund of the inifial
for each Restaurant vou open before December 30. 2012.
Iso makes vou eligible for the reduced rovaltv rate described
The initial franchise fee is $15,000 per Restaurant if you and CiCi's sign a Development
Agreement for 3 to 5 Restaurants before September 1, 2ft4-L2012. and you agree to open your 1st
and 2nd Restaurants on or before September 1, 2042i2fill* and your 3rd, 4th, and 5th
Restaurants, as applicable, on or before September 1, 304^^2014. You will receive a $10.000
described in Mm 6,
MCi's Pizza multi-unit Developer and open Restaurants in 2012 in
>er vou are scheduled to open in 2012. vou will receive a $10.000 refund
of the initial franchise fee vou paid for each Restaurant in excess of tho?
development schedule that vou actually open in 2012. Participation in this proPi
makes vou eligible for the reduced rovaltv rate described in Item 6.
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To participate in the Development Incentive Program, you must apply for participation, meet our
criteria, and receive our approval, which approval we may withhold in our sole discretion. Among
others, our criteria for participation include financial and operational qualifications and, i f you are an
existing CiCi's Pizza developer or franchisee, being in "Good Standing." "Good Standing" means
that you are not in default of any o f your agreements with us or our affiliates and you have
substantially and timely complied with all the terms and conditions of those agreements.
Initial Franchise Fee - CiCi's To Go Unit: The initial franchise fee is $15,000 per To Go Unit,
regardless of the number of CiCi's To Go Units you contract to develop or open. I f you sign a Franchise
Agreement for a CiCi's To Go Unit, but not a Development Agreement for one or more CiCi's To Go
Units, your payment of the CiCi's To Go Unit franchise fee is due at the time you sign the Franchise
Agreement. See provisions below under "Development Fee — CiCi's To Go Units" for an explanation of
how development fees for CiCi's To Go Units will be credited against your franchise fees for CiCi's To
Go Units.
VctFrnnCiCi's Patriot Program: We are a member of the International Franchise Association ("IFA")
and participate in IFA's VetFran Program. We have developed a Patriot ^ f p g r a m which provides
special financial incentives to qualified veterans. Under the VetFran Program we
votorans a 50% discount offPatriot Program. CiCi's will waive the initial franchise fee^.
50% reduction in rovaltv fees for the first vear ol
•in the Certified Franchise Executive certification through IFA
•OQO has been rebated back to vou. vou will receive a
20% rebate of vour rovaltv navments.
Development Fee - CiCi's Pizza Restaurants. I f you sign a Development Agreement for one or more
Restaurants, you must pay a development fee equal to the total of 100% o f the initial franchise fee for the
first Restaurant to be developed and 40% of the initial franchise fee for each succeeding Restaurant to be
developed. The pro rata portion of the development fee allocable to each Restaurant will be credited
against the initial franchise fee due for that Restaurant. The development fee is calculated the same for
all franchisees entering into Development Agreements for CiCi's Pizza Restaurants under this offering,
but the actual dollar amount paid will vary depending on the number of Restaurants you agree to develop.
Under certain circumstances and considering relevant factors (including the size and location of the
Development Area and the economic conditions o f the market), we may negotiate the amount of the
development fee, but we have no obligation to do so.
Development Fee - CiCi's To Go Units. I f you sign a Development Agreement for one or more CiCi's
To Go Units, you must pay a development fee equal to the total of 100% of the initial franchise fee for
the first CiCi's To Go Unit to be developed and 40% o f the initial franchise fee for each succeeding
CiCi's To Go Unit to be developed. Payment of your development fee is due at the time you sign the
Development Agreement. The pro rata portion of the development fee allocable to each CiCi's To Go
Unit will be credited against the initial franchise fee due for that CiCi's To Go Unit. The development
fee is calculated the same for all franchisees entering into Development Agreements for CiCi's To Go
Units under this offering. However, under certain circumstances and considering relevant factors
(including the size and location of the Development Area and the economic condifions of the market), we
may negotiate the amount o f the development fee, but we have no obligation to do so.
Initial Inventory: Before you begin operafions, and while you operate a Facility, you must purchase and
use certain special recipe food products, like our cheeses, sauces, meats and flour. We have developed,
or have had these special recipe products developed, especially for the CiCi's System. Because o f t h e
confidential and proprietary nature of these special recipe products and because of their importance to the
CiCi's System, you must purchase them only from us or from a supplier we designate. Curtently, JMC is
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the designated supplier of these products. Your initial inventory cost of these products will vary
depending on the type of Facility you are establishing, your anticipated sales, the next scheduled delivery
date and other factors. For its fiscal year ending December 36. 3010.25. 2011. JMC received payments
from CiCi's Pizza Restaurant franchisees ranging from approximately $44^36912.461 to $44^85315.407
and payments from CiCi's To Go Unit franchisees in the amount of $4^86?5.952 for an inifial 7 to 10 day
supply of these items. (See Item 8.)
You must also purchase certain stock inventory items to use in the Facility from a supplier we
approve. These items include sugar, napkins, condiments and related items. Currently, JMC makes these
items available at a cost of approximately $2^4422.564 per Restaurant for an initial 7 to 10 day supply
and approximately $M441a2flL per CiCi's To Go Unit for an initial 7 to 10 day supply.
Payments for all food products and other initial inventory purchased from JMC is drafted 9 days
prior to the Restaurant's opening date.
Initial Equipment. Furniture. Fixtures. Supplies and Decor Items: CiCi's Pizza Restaurant
franchisees (but not CiCi's To Go Unit franchisees) must purchase an approved Coke fountain drink
machine that meets our specifications (approximately $4=2044.200 excluding installation costs of
S2Q0Qup to $2.000 paid to Coke U.S.A.). JMC is an authorized supplier of this required Coke machine.
CiCi's Pizza Restaurant franchisees (but not CiCi's To Go Unit franchisees) must purchase and
use only the buffet components that have been custom designed and built for CiCi's Pizza Restaurants.
JMC is currently our only approved supplier of these buffet components. Each CiCi's Pizza Restaurant
requires a 12 piece buffet components package, for a total current cost of approximately
$8i445=8.474.91. JMC also supplies other kitchen equipment, fumiture, fixtures, supplies and decor
items required for CiCi's Pizza Restaurants and CiCi's To Go Units. These requirements are
substantially the same for each CiCi's Pizza Restaurant or CiCi's To Go Unit, as applicable, although the
requirements differ substantially from a Restaurant to a CiCi's To Go Unit and there may be some
differences based on the size and configuration of the Facility, as well as on local health, environmental
or other standards. For its fiscal year ending December 26. 2010.25. 2011. JMC received payments from
CiCi's Pizza Restaurant franchisees ranging from approximately $127i699134.219.62 to
$139.695154.900 per Restaurant for the buffet components and standard kitchen equipment, fumiture,
fixtures, and decor items and payments from CiCi's To Go Unit franchisees ranging from approximately
$7*5660^2*115 to $91ii9921»fi6i for standard kitchen equipment, fumiture, fixtures, and decor items.
See Item 10.
Opening Assistance: We do not charge an additional fee for providing opening assistance, but for your
second Facility, as well as any other additional Facilities you establish, you may have to reimburse us for
any expenses our representatives incur in providing opening assistance. We cannot provide an estimate
of these expenses due to their highly variable nature.
Site Evaluation: Upon your request, we provide 1 on-site evaluation of the proposed site for your
Facility at no additional charge, but you must reimburse us for our representatives' expenses. If
additional on-site evaluafions are required, we may charge you a fee for each additional on-site
evaluation (the "Additional Site Evaluation Fee") in addition to requiring you to reimburse us for our
expenses. Currently, you must reimburse us for airfare, plus $100 per day for transportation and $100
per day for lodging, if we do not approve the site or if we approve the site but you fail to open a Facility
at that site. Under our current policy, you do not have to pay the Additional Site Evaluation Fee for
additional on-site evaluations.
DAL01:HS€OS4^11HZ82.a
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Construction Site Inspection Fee: You may have to pay a reasonable fee for on-site inspections during
constmction of the Facility and pay or reimburse us for our representatives' expenses. Currently, you
must pay us $100 per day for those inspections and reimburse us for airfare, plus $100 per day for
transportation and $100 per day for lodging.
In addition, all existing Facilities that are being
transferred must receive an on-site inspection prior to the sale, during which we review the items that we
require to be reimaged. Currently, the construction site inspection fee for transferring Facilities is $300
for one Facility and $600 for multiple Facilities. You must also reimburse us for airfare , plus $100 per
day for transportation and $100 per day for lodging.
Training Fee: We do not charge a fee for initial training provided for yourfirstRestaurant, but we have
the right to charge a reasonable training fee for initial training for the second Restaurant, as well as any
other addifional Restaurant that you establish. (For a discussion of initial training for CiCi's To Go
Units, see Item 11.)
CiCi's Notes Applications Software Enterprise Application: All franchisees must pay us an initial
license fee for our CiCi's Notes Applications Enterprise Application Software that enables you to
view our Manuals and obtain amendments and updates of the Manuals from us electronically as well as
report your sales infonnation to us electronically. The current initial license fee is $24^216. Each
Facility must use this softwarcijMycicis.nefe—Currently, we provide 1 portal license for each
Managing Principal for the mycicis.net communications website at no additional chorgc. If you
wish to purchase additional portal licenses for use by your Operators or Controlling Principals, you must
pay us an tftitial-additiftp^l license fee of $340216 for each additional license.
Lease Costs: We must approve the lease or contract to purchase your Facility location before you sign
it. I f we incur legal fees in reviewing these documents, you must pay or reimburse us for our reasonable
attomeys' fees. In some circumstances, we may hold the lease for the location you select for the Facility
and may assign the lease to you. (See Item 11 and Exhibit HQ.) If we do, you must reimburse us for any
out-of-pocket costs we have incurred in securing the lease, such as our legal fees and any required lease
deposits.
Other Information:
The initial fees described in this Item 5 are non-refundable unless your Operator fails to
satisfactorily complete our initial management training program, or if we determine, in our reasonable
business judgment, that he or she cannot satisfactorily complete the program. In that case, we can
terminate the Franchise Agreement or Development Agreement if you fail to cure the defauh within the
applicable cure period. I f we terminate the Franchise Agreement or Development Agreement for this
reason, we will refund one-half of your initial franchise fee or development fee, as applicable.
We may negotiate the amount of certain fees, including the initial franchise fee and the
development fee, in our sole discretion. In determining whether an adjustment is warranted, we consider
such factors as the size and experience of the franchisee, whether we have previously dealt with the
franchisee, the impact of market forces in a given location, and other relevant circumstances. We may
also offer loyalty programs for existing and/or new franchisees that may include reductions or waivers of
certain fees.
DALOI :4456054^11242S2a
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ITEM 6
OTHER FEES
TypeofFee('X^>
Royalty Fee^
Amount
Due Date
Remarks
The Base Royalty
Rate is currently 4%
ofthe first $28,850 of
weekly Net Sales;
Wednesday of each week
for the preceding week
See Note 2 for-the-definition of Net
Sales. You must-pay-theelectronic funds-transferTl
franchised
average rovaltv fc
5% of the incremental
weekly Net Sales
from $28,851 to
$33,650;
tiered rovaltv formula. See Item 19.
-to-incr-ease—the
We-reset
Base Royalty Rate to 5% at
written-noticc to -you.-If-wepcrcentage tiers will be increased by
5.5% ofthe
incremental weekly
Net Sales from
$33,651 to $38,450;
and
tjtt4erlf vou are a new franchisee who is
Incentive Programs
6% of the
incremental weekly
Net Sales in excess of
$38,450
(fl)4f-you are an existing Developer and
you open a Restaurant-on-or-bef<
1, 2012 and 90 days before the
date onrequir^cj by your—euHprent
development schedule, your Royalty Rate
will—be-2% for 6 months following
(b)—if—yeu—and—we—sign—a—newDevelopment—Agreement for 1-3beforc September 1, 3011,
Ity Rate will be 3% for 1 year
»€—opening—of your—1stRestaurant—if—it- opens on or before
2-and-2% for 1 year
following—the—opening—of your—3ndRcstaurant if on or before
September 1, 3013; and
(c) if you and we sign a-DevelopmentAgreement for 3-5 Rcsi
September L 3011—youF-R<
will be 3% for 1 year following—theopening—of—your—1st—and—3«dRestaurants-if-they-open on or before
September 1, 2012, and 2% for 1 year
following the opcning-of-your 3rd, 4th,
and Sth Restaurants, as applicable if
they open on or before September—1^
3043^
DALOl :1I560.S4.91194789.3
079684.0103
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Type o f Fee<'>P*
Amount
Due Date
Remarks
I f - y o u -open-a-qualifying—Restauranta f t c r the-applicable-deadlinej-or-if-yourcquest and -wc -grant-you-an-openingdate extension, you wi
for the royalty reduction.
for that Restaurant's first
istaurants in
2012 in excess of the number vou are
required to open, vou will pav a 2%
rovaltv for each Restaurant's r^fst vear
of operation.
Advertising Fund
Restaurant
The greater o f $2,300
or 3% of Net Sales
Fifth business day
following the end of each
accounting period
The greater o f $1,000
or 3% of Net Sales
CiCi's To Go Unit
Veterans who participate in CiCi's
Patriot Program
receive a 50%
reduction in rovaltv fees for the first
vear
of their
first
jlflfcration.
There are 3 accounting periods in each
calendar quarter. The first accounting
period in each quarter is 5 weeks, and the
remaining 2 accounting periods in the
quarter are 4 weeks each. You must pay .
the Advertising Fund contribution by
electronic funds transfer. During the 4th
quarter of each calendar year, we may, in
our discretion, notify you o f an increase in
the flat dollar amount component of the
Advertising Fund contribution (that is, the
$2,300 for Restaurants and the $1,000 for
CiCi's To Go Units) to be effective as o f
January of the following calendar year
based on the percentage change in the
Standard Quotations and Data resource
(SQAD) or any comparable national,
regional, or market media index we
designate, for most recently ended 12monlh period from October 1 through
September 30. We will also notify you of
any change in the media index during the
4th quarter of the year for the following
year.
Local Advertising
Currently, in your
discretion
N/A
Upon written notice from us, you must
spend up to 2% of Net Sales each month
on Local Advertising. This amount is in
addition to your Advertising Fund
obligation.
Cooperative
Advertising
Currently, none
N/A
We have the right to establish advertising
cooperatives. I f we establish a cooperative
DALO 1:11S6051.911947893
079684.0103
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Type of Feet'*^^^
Advertising &
Promotional Materials
Amount
Due Date
Reasonable cost
When billed
$ ^ ^ annually
When billed
Remarks
in your area, you must participate and
contribute to the cooperative an amount
equal to any required local advertising
expenditure. We will credh the amount
you must contribute to the cooperative
against your local advertising obligation
amount.
If you request, JMC or we will provide you
banners, ad slicks and similar materials
that we have developed for use in
advertising the Restaurant. (See Item 8)
The CiCi's NotesF.nterpri.se ApplicationO U l l W U l V ClldUlC^ y u u l U (^UllUULl L C I l a l l l
SoftwareEnterprise
Fee
Administrative Fee
activities electronically. (See Items 5 and
11.)
Maximum - $5,000
per document
When billed
Renewal Fee
25% of our then
current initial
franchise fee for a
CiCi's Pizza
Restaurant or To Go
Unit, as applicable,
plus reimbursement of
our reasonable costs
and expenses
On renewal
Interest
Highest rate allowed
by applicable law
On demand
Training for
Replacement or
Successor Personnel
Reasonable fee, plus
expenses
If applicable, before
training
Additional Training
Reasonable fee, plus
expenses
Before training or when
billed, at our discretion
DALO 1 :llS60j;i.91194789.3
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If you ask us to amend the Franchise or
Development Agreement or consent to,
prepare or review any other documentation
for any transaction for which no specific
fee is imposed, you must pay us an
administrative fee.
See Item 17.
We may charge you interest on all overdue
amounts under both the Franchise and
Development Agreements.
We have the right to charge a reasonable
fee to train any replacement or successor
Managing Principal or Manager. Under
our current policy we charge $2,500, plus
$100 per day for each additional day of
training that we determine is necessary, for
Managing Principals and $250 for
Managers. If our trainers have to travel to
provide the training, you must also pay for
our trainers' airfare, plus $ 100 per day for
transportation and $100 per day for
lodging. SeeNote lA.
Your Managing Principal, Operator,
Managers and other Facility personnel may
have to attend additional training
programs. If we do, we have the right to
charge a fee for additional training. The
current fee is $ 100 per person per day.
Type ofFee('«3)
Amount
Due Date
Remarks
plus expenses. If our trainers must travel
to provide the training, you must also pay
for our trainers' airfare, plus $ 100 per day
for transportation and $ 100 per day for
lodging. See Notel A.
If you ask, or if we believe it is
appropriate, we will (subject to
availability) provide trained
representatives to conduct on-site remedial
training at your Facility. If we do, we have
the right to charge a fee for remedial
training. The current fee is $100 per
person per day, plus expenses. If our
trainers have to travel to provide the
training, you must also pay for our
trainers' airfare, plus $100 per day for
transportation and $ 100 per day for
lodging. SeeNote I A.
On-site Remedial
Training
Reasonable fee, plus
expenses
Before training or when
billed, at our discretion
Transfer Fee
$5,000, plus any
greater amount
necessary to
reimburse us for our
reasonable
out-of-pocket costs
and expenses m
reviewing the transfer
application
Submitted with transfer
application or, in our
discretion, paid at closing
If an individual or partnership franchisee
transfers its rights to a corporation
controlled by the same interest holders, the
fee is limited to our reasonable
out-of-pocket costs and expenses
(including applicable legal and accounting
fees) to review the application. Similar
transfer fees are charged under both the
Franchise and Development Agreements.
SeeNote lA.
Securities Offering
Fee
$3,000 or any greater
amount necessary to
reimburse us for our
reasonable costs and
expenses in reviewing
the proposed
securities offering
When billed
We must give our consent to any private
offering of your securities. A public
offering of your securities is not permitted.
(See Item 17.) The Securities Offering Fee
is the same amount under both the
Franchise and Development Agreements.
Inspection Fee
A reasonable fee
based on our expenses
On demand
If a quality assurance inspection reveals
deficiencies you fail to correct, we may
(but need not) correct them for you and
charge a fee for our expenses in taking the
corrective action (including, without
limitation, any necessary re-inspection). In
addition to our expenses to take corrective
action, the inspection fee also currently
includes our representatives' airfare, plus
$ 100 per day for transportation and $ 100
per day for lodging. See Note 1 A.
Testing Fee
Cost of inspection, if
applicable, and cost of
test
When billed
You (or your supplier) may have to pay an
independent laboratory or us for the cost of
a test on samples ofyour products and
supplies if we have not previously
approved the supplier of the item or if the
sample fails to conform to our
DALO 1:11S6051.91194789.3
079684.0103
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Type of Fee*'^*
Amount
Due Date
Indemnification
Varies according to
loss
On demand
Audit Fee
Cost of audit
When billed
Insurance Fee
A reasonable amount
based on our expenses
When billed
Operations Manual
Replacement Fee
$100
When billed
Insufficient Funds Fee
$20
On demand
Enforcement Costs
Will vary
As incurred
Post-Termination/
Post-Expiration Deidentification Costs
A reasonable fee
based on our expenses
As incurred
Liquidated
Damages*^*
A lump sum amount
equal to the weekly
average Net Sales for
the 52 weeks before
termination (or if the
Facility has not been
operating for 52
weeks, the number of
weeks of actual
operation) times the
corresponding
Royalty Fee (as
defmed) based on the
average Net Sales for
the 52 weeks before
termination, times the
Weekly
DALO 1:1156051.91194789.3
079684.0103
Remarks
specifications. You must also pay the
costs of inspection and testing (including
our administrative costs attributable to
both) under our supplier approval
procedures. (See Item 8.)
You must indemnify us when certain of
your actions, or those of others (such as
your Controlling Principal), result in loss
to us. In addition, you must indemnify us
for any losses we incur from your or your
Managing Principal's acts or omissions
during our work evaluation or management
training programs.
Payable only if we find, after an audit, that
you have understated any amount owed to
us by more than 3%.
If you fail to maintain the required
insurance, we have the right, but not the
obligation, to obtain it for you. If we do,
we will charge you a fee, plus the cost of
the insurance.
We provide one set of Manuals at no
charge.
If a payment is rejected because you have
insufficient funds to make the payment, we
charge a service fee of $20, which includes
the bank charge. We may draft your
account for this fee.
You must pay our costs of enforcement
(including attorneys' fees) if you do not
comply with the Franchise or Development
Agreement.
If you fail to de-identify after the franchise
terminates or expires, we may make the
necessary changes at your expense.
Unless otherwise provided in the CiCi's
To Go Addendum to Franchise
Agreement, you must pay liquidated
damages if the Franchise Agreement is
terminated.
Liquidated Damages are paid weekly and
begin from the earlier of the termination
date or the date that you ceased to operate
the Restaurant, if different. They continue
until the earlier of (i) the opening of a
replacement CiCi's Pizza restaurant in the
market that was previously served or (ii)
the original expiration date of the
Franchise Agreement
- 19-
Type of Fee*'^^'
Data Collection Fee
Myeicis;net Portolr;^
RenewalEee f
Amount
lesser of 104 weeks
(2 years) or the
number of weeks
remaining in the term
of the Agreement,
times 75%.
Currently, $25 per
week, but we may
increase this fee up to
$50 per week
tSSSaniiuallyrlot
each-^license- .
purehased :
Due Date
Remarks
When billed
If you fail to submit to us when due any
required infonnation or report, including
sales information. Net Sales reports,
certificates of insurance and financial
statements, we may, after first providing
notice and a reasonable opportunity to cure
(not more than 10 days), assess a Data
Collection Fee, which we may draft by
electronic fund transfer from your
authorized bank account.
When billed
If-an-individuHl-is-thelMariagihg^;.;,,
Principal-for-multiple franchises, that
person-still-rcceives only;.!, frtie license.}
Miilti-unit-I>evelo|
additiontti free licei
I^eili
a
wtjl
• • e a j ' l
Additional licenses may 'bc[
Mystery Shopper Fee
Approxunately $750
annually
When billed
Gift Cards
$.50 per card
(100/box)
When billed
POS Annual
Maintenance Fee
Approximately
Investment
Monitoring Fee
$250
You are required to purchase CiCi's gift
cards from our designated third party
supplier and sell and redeem them.
You must use the XPIENT POS system
$2,570 to $3,500
Monthly
If you participate in the Investment
Program, you must pay us a monthly
monitoring fee of $250 for each
participating Restaurant. (See Items 1 and
m
You must oav for our approved
and S200 an hour
' *5
DALO 1:4456Q54.91194789.3
079684.0103
- 20-
attornev to conduct a com|
ofvnuriease
amcndiucaLorxcacwaU:
Notes:
(1)
Except as noted in the preceding chart, all fees and expenses described in this Item 6 are
non-refundable, are imposed by, and are payable to us. The amounts given may be subject to increases
based on changes in market conditions, our cost of providing services and future policy changes.
Currently, we have no plans to increase payments over which we have control. To our knowledge, none
of the other costs listed above are refundable, although exact terms will be established by the suppliers of
those goods and services. We may negotiate the amount of certain fees in our sole discretion. In
detennining whether an adjustment is warranted, we consider such factors as the size and experience of
the franchisee, whether we have previously dealt with the franchisee, the impact of market forces in a
given location, and other relevant circumstances.
(2)
"Net Sales" means the total selling price of all services and products and all income of
every other kind and nature related to sales at or from the Facility (including income related to delivery
operations if such delivery operations are authorized by us), whether for cash or credit and regardless of
collection in the case of credit. Net Sales excludes the following:
(a)
Receipts from the operation of any public telephone installed in the Facility, the
sale of tobacco products or products from vending machines located at the Facility, except for any
amount representing your share of the revenues (While your share of the revenues generated from
vending machines are included in the definition of Net Sales, it is our current policy not to collect
royalties on such revenue. We reserve the right to change this policy at any time in the future at our sole
discretion);
(b)
Sums representing sales taxes collected directiy from customers, based on
present or future laws of federal, state or local governments, collected by you in the operation of the
Facility, and any other tax, excise or duty which is levied or assessed against you by any federal, state,
municipal or local authority, based on sales of specific merchandise sold at or from the Facility, if the
taxes are actually transmitted to the appropriate taxing authority;
(c)
Tips or gratuities paid directly by Facility customers to your employees or paid
to you and then tumed over to your employees;
(d)
Retums to shippers or manufacturers; and
(e)
Proceeds from isolated sales of trade fixtures not constituting any part of your
products and services offered for resale at the Facility nor having any material effect on the ongoing
operation of the Facility required under the Franchise Agreement.
We may authorize you to exclude certain other items from Net Sales. Any exclusion may be
revoked or withdrawn at any time in writing by us.
The following are included within the definition of "Net Sales":
(a)
The full value of meals fumished to your employees as an incident to their
employment except that the value of any discounts you extend to your employees may be credited against
Net Sales during the week in which the meals were furnished for the purpose of determining the amount
of Net Sales; and
DALO 1 :llS60ji4.91194789.3
079684.0103
- 21 -
(b)
The retail value of all products sold when coupons, gift certificates, gift cards or
vouchers are redeemed; but you may exclude from Net Sales the retail price of the coupons, gift
certificates, gift cards or vouchers at the time of purchase for the purpose of determining the amount of
Net Sales upon which the fees are due.
In the future you may have to report your Net Sales to a third party we designate whose software
programs will help us evaluate sales trends and analyze certain costs. If we do so, you may have to pay a
fee.
(3)
We may offer loyalty programs for existing and/or new franchisees that may include
reductions or waivers of certain fees.
ITEM 7
ESTIMATED INITIAL INVESTMENT
YOUR ESTIMATED INITIAL INVESTMENT
FOR A CICI'S PIZZA RESTAURANT
Type of expenditure
Actual or
Estimated
Amount
(Low)
Actual or
Estimated
Amount
(High)
Method of
Payment
When Due
Franchise Fee
(Note 1)
$15,000
$30,000
(1)
(0
Leasehold
Improvements
(Note 2)
$200,000
$340,000
As
anranged
As invoiced
Landlord/
Independent Contractors
$0
$10,000
As
arranged
As assessed
Certain Local Authorities
$142,370
S146.219
snrooo
Lump sum
or
negotiable
As invoiced
Independent Vendors/JMC
Signage
(Note 5)
$7,500
$25,000
As invoiced
Independent Vendors
Insurance
(Note 6)
$3,500
$6,000
Lump sum
or
negofiable
As
arranged
As invoiced
Independent Carrier
Business Licenses
(Note 7)
$1,000
$5,000
As
arranged
As invoiced
Independent Vendors
Lump sum
or
negotiable
Vendor's Terms/
as mcurred
Independent Vendors/JMC
Cash
As incurred
Independent Vendors
Cash
As needed
Independent Vendor/
Employees
Impact Fees
(Note 3)
Equipment and
Fixtures
(Note 4)
Opening Inventory/
Supplies
(Note 8)
Promotional
Expenses (Note 9)
$5,000
Q.
$7,000
Training Costs
(Note 10)
$11,500
$20,500
DALO 1:1IS60S1.91194789.3
079684.0103
- 22-
To Whom
Payment
Is To Be Made
Us
Type of expenditure
Actual or
Estimated
Amount
(Low)
Actual or
Estunated
Amount
(High)
Deposits and other PreOpening Costs
(Note 11)
Catering Vehicle (Note
12)
$8,500
$34,000
As
arranged
As invoiced
Independent Vendors
$0
$5,000
As
arranged
As arranged
Independent Vendor
Insulated Catering Bags
(Note 13)
$250
$1,000
As
arranged
As invoiced
Independent Vendor
$25,000
$45,000
$446^4^
703
$714,912m
580
Additional Funds
(3 months)
(Note 14)
TOTALS
(Note 15)
Method of
Payment
When Due
To Whom
Payment
Is To Be Made
YOUR ESTIMATED INITIAL INVESTMENT
FOR A C I C r S TO GO UNIT
Cost or
Expense
Actual or
Estimated
Amount
(Low)
Actual or
Estimated
Amount
(High)
Method of
Payment
When Due
Franchise Fee
(Note I)
$15,000
$15,000
(1)
(1)
Leasehold
Improvements
(Note 2)
Impact Fees
(Note 3)
$75,000
$125,000
As arranged
As invoiced
Landlord/
Independent Contractors
$0
$5,000
As arranged
As assessed
Certain Local Authorities
As invoiced
Independent Vendors/JMC
$W8^21*Q
Lump sum
or
negotiable
As invoiced
Independent Vendors
As invoiced
Independent Carrier
As invoiced
Independent Vendors
Equipment,
and Fixtures
(Note 4)
Fumiture
Signage
(Note 5)
$3,000
$6,000
Insurance
(Note 6)
$2,000
$5,000
Lump sum
or
negotiable
As arranged
Business Licenses
(Note 7)
$1,000
$3,000
As arranged
DALOl.Um54Sm^M^
079684.0103
- 23-
To Whom
Payment
Is To Be Made
Us
Cost or
Expense
Actual or
Estimated
Amount
(Low)
Actual or
Estunated
Amount
(High)
Opening Inventory/
Supplies
(Note 8)
$M^2d55
$8.4^9.453
Promotional
Expenses (Note 9)
$4,000
Training Costs
(Note 10)
Method of
Payment
When Due
To Whom
Payment
Is To Be Made
Lump sum
or
negotiable
Vendor's Terms/
as incurred
Independent Vendors/JMC
$4,500
Cash
As incurred at
signing
Independent Vendors
$2,500
$5,000
Cash
As needed
Independent Vendor/
Emplovees
Deposits and other PreOpening Costs
(Note 11)
$7,500
$16,000
As arranged
As invoiced
Independent Vendors
Catering Vehicle (Note
12)
$0
$5,000
As arranged
As arranged
Independent Vendor
Insulated Catering Bags
(Note 13)
$250
$1,000
As arranged
As invoiced
Independent Vendor
$10,000
$15,000
$321,756^
818
$332,3743fl^
Additional Funds
(3 months)
(Note 14)
TOTALS
(Note 15)
m
Notes to the 2 preceding charts:
(1)
The low end of the range for the initial franchise fee for a CiCi's Pizza Restaurant is
based on highest level of participation in the Development Incentive Program. The totals in the preceding
charts assume this is your first Facility. The allocable portion of the development fee is credited against
the initial franchise fee for each Facility opened under a Development Agreement. The amount of the
development fee will vary depending on the number of CiCi's Facilities you agree to develop, but the
development fee is calculated the same for all franchisees entering into a Development Agreement for
CiCi's Pizza Restaurants or CiCi's To Go Units. The development fee and initial franchise fee are further
described in Item 5, including circumstances under which we may refund a portion of the inifial fee.
(2)
CiCi's Facilities are typically located in commercially zoned shopping areas. Due to the
cost of land acquisition and new constmction, the premises are normally leased. Accordingly, these
amounts assume that you will lease the premises for the Facility and do not include costs of land
acquisition and construction of a building. If you purchase land and construct the Facility, the initial cost
would be significantly greater than these estimates. However, due to the highly variable nature of these
costs, we cannot provide an estimate of the cost to acquire land and constmct a new building. The
estimates provided for Restaurants and Units, respectively, are based on the cost of adapting our
prototypical architectural plans for the finish-out of a CiCi's Pizza Restaurant containing approximately
4,000 square feet and a CiCi's To Go Unit containing approximately 900 square feet. The leasehold
improvement ranges will be affected by various factors like the location of the Facility and local market
conditions; The estimates assume that the landlord will provide connections to adequate electrical, gas,
water and sewage service. Your actual costs may or may not include site preparation, demising walls.
DALOLHSet
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and utility extensions, depending on the arrangements you negotiate with your landlord. If your landlord
contributes to the cost of finish-out, total leasehold improvement costs will be reduced. The average
our best estimate based on commercial leasing and finish-out rates that we have experienced. These
estimates may vary substantially based on your negotiations with your landlord; as well as on local
construction costs and other conditions. The preceding totals exclude certain cost reimbursements. We
provide one on-site evaluation of the proposed site for your Facility at no additional charge, but you must
reimburse us for our representatives' expenses. I f additional on-site evaluations are required, we may
charge you the Additional Site Evaluation Fee in addition to requiring you to reimburse us for our
expenses. You must reimburse us for airfare, plus $100 per day for transportation and $100 per day for
lodging, if we do not approve the site or if we approve the site but you fail to open a Facility at that site.
Under our current policy, you do not have to pay the Additional Site Evaluation Fee for additional on-site
evaluations. In addition, we may make on-site inspecfions during the constmction of the Facility as we
deem reasonably necessary to evaluate progress of the construction, and you must pay a reasonable fee
for such on-site inspections and to pay or reimburse us for our representatives' expenses. Currently, you
must pay us $100 per day for those inspections and reimburse us for airfare, plus $100 per day for
transportation and $100 per day for lodging. In the event of non-sufficient funds, a $20 service charge
will be drafted, as well as the original amount.
(3)
The impact fees in some areas may substantially exceed $10,000 for a CiCi's Pizza
Restaurant and $5,000 for a CiCi's To Go Unit. Impact fees are assessed by certain jurisdictions based
on a predetermined formula established by the jurisdiction. Impact fees are generally based on the
expected impact of the Facility on the infrastmcture around the Facility, including traffic infrastmcture
and water and sewer systems.
(4)
The amounts for CiCi's Pizza Restaurants include the cost of the fumiture, fixtures,
equipment, including two ovens, a Coke beverage dispenser. Coke beverage installation (paid directly to
Coke U.S.A.), decor items required for the Restaurant, and the cost of the XPIENTCiCi's Approved
POS System, including the initial annual fee, training and installation. The amounts for CiCi's To Go
Units include the cost of the fumiture,fixtures,equipment, including two ovens (this estimate is based on
new equipment only), and decor items, as well as the XPIENTCiCi's Approved POS System, the initial
annual fee, training and installation. We currently require the XPIENTCiCi's Approved POS System
for new CiCi's Pizza Restaurants and To Go Units. (See Itemltems 8 and 11.) Current franchisees may
continue to use their current POS Systems, but they must convert to the XPIENTCiCi^s Approved POS
System upon renewal or transfer, and we may offer incentives for current franchisees to voluntarily
convert to the XPIENTCiCi's Approved POS System prior to renewal or transfer. For both CiCi's
Pizza Restaurants and CiCi's To Go Units, the figures include the cost of a personal computer with a
platform and software that satisfies our curtent operating specifications, and the $344)216 initial license
arrangements that, if concluded, mav reduce total equipment costs bv approximatelv S52Q0.
(5)
These amounts represent your cost for interior and exterior signage. The cost of signage
may vary significantly depending on the size of the signage, number of signs, the location of the Facility
and market conditions.
(6)
This amount represents an estimate of your annual insurance premiums. You must
obtain the insurance coverage described in the Franchise Agreement. CiCi Enterprises, LP must be
named as an additional insured on these policies. Your cost of insurance may vary depending on the
insurer, the location of the Facility, the value of the equipment and improvements, and your claims
history.
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(7)
This amount represents estimated health and various operating licenses required at the
local, regional, or state level.
(8)
We estimate that this range will cover the cost of the initial small wares package
including pans, utensils and dishes. This estimate also includes the cost of food, beverages, condiments
and supplies for approximately the first 7 to 10 days of operations.
(9)
You must carry out a grand opening promotion for the Facility in compliance with our
written specifications. The grand opening promotion will begin shortly after the Facility opens for
business. We must approve all advertising items, methods and media you use for your grand opening
promotion.
(10)
These fees include the costs of recruiting and training your key employees. We provide
initial training to your initial Managing Principal, Operator, General Manager and 2 Assistant Managers
for your first Facility at no additional charge. I f this is vour first Restaurant, vou are required to
Training Restaurant/Facilitv. Therefore, these amounts include only your out-of-pocket costs for the
training of these people. You will be responsible for all expenses you or your employees incur in the
initial training program, like travel, lodging, meals and wages. These costs will vary depending upon
your selection of salary levels, lodging and dining facilities, mode and distance of transportation. Wages
for the Managing Principal and Operator, while in training, are not included. We have the right to charge
a reasonable training fee for the second Facility, as well as any other additional Facilities you establish.
We do not charge an additional fee for providing opening assistance, but for your second Restaurant or
Unit, as well as any other additional Restaurant or Unit you establish, you may have to reimburse us for
any expenses our representatives incur in providing opening assistance. Exisfing CiCi's Pizza Restaurant
franchisees or certified managers who have completed our initial training program do not have to
complete any additional initial training (and do not incur the related initial training costs) to establish a
CiCi's To Go Unit (See Item 11).
(11)
These estimates include the costs of legal fees and architectural and/or engineering plans
as well as the costs of prepaid rent, a lease deposit, and utility deposits.
(12)
If you choose to provide catering services, you may either use your personal vehicle to
provide those services or purchase or lease a used vehicle. We do not curtently require you to offer
catering services or to purchase or lease any vehicle.
(13)
If you choose to provide catering services, you must use insulated bags to transport food
items to the catering site. We estimate that each bag will cost approximately $50 and you will need
between 5 and 20 bags, depending on the extent of your catering services.
(14)
In addition to the initial franchise fee and other initial costs, you will need additional
funds to operate your Facility during the start-up phase of the business. These funds will be used, among
other things, to train your crew, compensate for higher than normal food and labor costs during the
start-up phase and provide general working capital. These amounts do not include any estimates for debt
service and related closing costs or for payment of a Managing Principal's or Operator's salary during
pre-opening. We estimate the start-up phase to be 3 months from the date the Facility opens for business.
You may also have to pay the royalty, advertising and other related fees described in Item 6 of this
disclosure document. These figures are estimates, and we cannot assure you that you will not have
additional expenses starting the Facility. Your actual costs will depend on factors like your management
skills, experience and business acumen; local economic conditions; the local market for the Facility's
services and products; the prevailing wage rate; competition; and sales. You should calculate your
DALO 1:11S60S4.91194789.3
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estimated expenses for these items based on the anticipated costs in your market and consider whether
you will need additional cash reserves.
(15)
We relied on our experience in the industry to compile these estimates. (See Item 1.)
You should review these figures carefully with your business advisor.
Except as specifically stated above, the amounts given may be subject to increases based on
changes in market conditions, our cost of providing services and future policy changes. At the present
time, we have no plans to increase payments over which we have control. Except as specifically stated
above, all payments made to us or JMC are non-refundable. The terms of your agreements with
independent suppliers will determine the refimdability of those payments. Except as disclosed in Item
10, neither we nor any of our afflliates offer any financing for your initial franchise fee or any portion of
your initial investment.
ITEMS
RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES
Required Purchases
You generally have no obligation to purchase or lease from us, or from our affiliates, any of the
products, services, supplies, fixtures, equipment, inventory or real estate used in establishing or operating
the Facility. However, there are some exceptions, as follows:
Special Recipe Products: We have developed, or have had developed, for use in the Facilities
certain products that are prepared from highly confidential secret recipes. These products include, but
are not limited to, our cheese, sauces, toppings, meats and flour. We may also develop other products
like this in the future. Because the quality and uniformity of these products are so important to the
System, you must use only our special recipe products and must purchase all of your requirements of
these products from us or a supplier we designate. Currently, our affiliate, JMC, is the designated
supplier of these items. (See Items 5 and 7.) JMC may suspend delivery of these items if you are in
default of the Franchise Agreement. We estimate the cost of these special recipe products to be
approximately 1% of your total cost to establish a Restaurant and approximately 451^% of your total cost
to operate a Restaurant and approximately 1% of your total cost to establish a CiCi's To Go Unit and
approximately 2i22°/o of your total cost to operate a CiCi's To Go Unit.
Custom Equipment: CiCi's Pizza Restaurants must use certain buffet components that have
been custom designed and built for our System. To preserve the design and to ensure the quality and
uniformity of production of this equipment, CiCi's Pizza Restaurant franchisees must purchase the
buffet components from a supplier we designate. Curtently, JMC is our only approved supplier for this
item. (See Items 5 and 7.) We estimate the cost of these items to be approximately 1% to 2% of the total
cost to establish a CiCi's Pizza Restaurant.
Gift Cards: CiCi's has implemented a Gift Card Program and you must participate. You must
purchase the cards from our approved supplier and must sell the cards to guests, and redeem those cards
submitted by guests. Currently, our approved third-party supplier of gift cards is Datasource.
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Merchandise W i t h Logos or Marks: We have the right to make available to you for resale in
the Facility merchandise identifying the System. This may include such items as pre-packaged food
products and CiCi's memorabilia, like T-shirts, cups and mugs. I f we make this type of merchandise
available, you may have to purchase it from us or from a supplier we designate in amounts necessary to
meet your customer demand. The amount of these purchases is expected to be insignificant in relation to
all your purchases and leases for the establishment and operation of the Facility.
CiCi's Notes Applications Soft>varci You—must install and—maintain CiCi's Notes
Applications Soft^varc in each Facility' to enable you to obtain electronic updates of our Manuals
and to report your sales electronically. You must obtain the software from us for a fee. (Sec Items
5» 6, and 7.)-The-fee for tho CiCi's Notes Applications Software is insignificant-in-r-elation-to-allyour purchases and leases for the establishment and operation of the Facility. The cost of these
additional licenses is insignificant in relation your purchases and leases for the establishment and
ODCration ofthe Facility-Enterprise Application: All franchisees must pav us an initial license fee
for our CiCi's Enternrise Annlication software that enables vou to view our Manuals and obtain
amendments and undates of the Manuals from us electronicallv as well as renort vour sales
information to us electronically. The current initial license fee is S216. Each Facilitv must use this
software. If vou wish to purchase additional portal licenses for use bv vour 0 |
Controlling Principals, vou must pav u
for each additional license.
Mycicis.net;
Mycicis.net is—the official—and—required communication site for all
communications between us and you.—You will receive an email account as part of the portal
Iieense.--All communications-to-you will be sent to this email account. We-provide-1 portal-liccnscfor-mycicis.inct at no additional-chafgej-but you must purchase any additional portaHicenses-fromus and pay for renewals.
Purchases According to Specifications and/or f r o m Approved Suppliers: In addition to the
purchases described above, and to ensure that the quality o f the products and services you offer under our
Marks is consistent with those we offer, you must purchase or lease certain items based on our
specifications and/or from suppliers we approve. Our standards and specifications are in our Manuals
and other written materials, which we can and do revise.
Point of Sale System: You must purchase, install, and use a CiCi's Approved POS Systemsupplied by XPIENT Solutions^ our designated supplier. ^ This requirement includes a minimum of 2
registers, terminals biometrics, thermal printers, report printers, cash draws, point of sale software, gift
card software, credit card software, inventory modules, schedule modules, and menu maintenance
software. You must also purchase a license for the computer software used to run the POS system.
Currentlv. XPIENT Solutions is th^Qjn only approved supplicrPOS Svstem for new and renewing
franchisees (current franchisees may continue operating using their oxisting point of sale systems)^
althoug'h we mav approve nther POS svstems in the future. Current franchisees may continue to use
their current POS Systems, but they must convert to the XPIENTCiCi's Approved POS System upon
renewal or transfer, and we may offer incentives for current fi-anchisees to voluntarily convert to the
XPIENTCiCi's Approved POS System prior to renewal or transfer.
Soft Drinks: You may only offer and sell at the Facility the brands o f soft drinks that we
approve. JMC is an approved supplier o f the Coke beverage dispensing machines required for CiCi's
Pizza Restaurants.
Equipment. Furniture. Fixtures. Supplies. Inventory and Related Items: You must purchase
or lease and install at the Facility all fixtures, fumishings, equipment (including computer hardware and
software), decor items, signs, delivery vehicles and related items that we require. A l l of these items must
DALOI :H56054^J
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conform to our standards and specifications. You must also maintain in sufficient supply and use and
sell only the food and beverage items, ingredients, products, materials, supplies and paper goods that
conform to our standards and specifications. You must obtain all of these items and other products you
use or offer for sale at the Facility (except vehicles and fresh produce) only from suppliers we approve.
Our afflliate, JMC, is currently the only approved supplier of stock inventory items, fumiture, fixtures,
equipment, supplies and decor items used in the Facility. (See Items 5 and 7.) We estimate the cost of
these items to be approximately-^ 28% to 372fi% of the total cost to establish a CiCi's Pizza Restaurant
and approximatelv-28 34% of the cost of operation at a CiCi's Pizza Restaurant. We estimate the cost of
these items to be apprQximatelv-36 33% to 4641% of the total cost to establish a CiCi's To Go Unit and
approximate I v-M 40% of the cost of operation at a CiCi's To Go Unit.
Vehicles: We do not curtently authorize or permit you to offer delivery services or to purchase
or lease any delivery vehicle but you may, at your option, offer catering services. If we authorize
delivery services in the future or you elect to provide catering services, any vehicle you use to deliver
Facility products and services must meet our standards for appearance and must have the ability to satisfy
the requirements imposed on you under the Franchise Agreement. We reserve the right to require you to
place the signs and other decor items we require on the vehicle and keep it clean and in good working
order at all times. You cannot use anyone to operate the vehicle who is under 18 years old or who does
not have a valid driver's license in the state where you provide services. Each vehicle operator must
comply with all laws, regulations and rules of the road and use due care and caution in operating and
maintaining the vehicle.
Site Selection and Construction: You must locate a site for the Facility that satisfies our site
selection requirements. You must engage a licensed commercial real estate broker approved by us in
connection with the selection and acquisition of a site for the Facility. You must also obtain our approval
of the site before you acquire it and our approval of any contract of sale or lease, for the Facility's
premises before you sign it. We will not approve any lease unless you and the landlord sign an
addendum to the lease that provides substantially the same terms contained in Attachment E to the
Development Agreement or Schedule 1 of Attachment B to the Franchise Agreement. Anv proposed
lease, as well as anv modification, amendment or renewal of the lease, must he reviewed for
compliance with our standards bv an attornev approved bv us. You are responsible for the cost of
the lease compliance review.
You must obtain, at your own expense, all necessary architectural, engineering, design and
constmction services and must adapt our prototypical architectural and design plans as needed for the
constmction of the Facility. We have the right to review your plans, and we will use commercially
reasonable efforts to either approve or reject the plans in a timely manner. If we determine that the plans
are not consistent with System standards, we may prohibit the implementation of such plans. Any
objections we make will also include a reasonably detailed list of changes that you must make for the
plans to be acceptable. I f we reject the plans, you must submit revised plans, and we will use
commercially reasonable efforts to either approve or reject the revised plans within 15 days after we
receive the revised plans. You may only use plans that we have approved in writing, and our silence will
not be deemed to be approval of the plans.
You must use a contractor approved by us or submit for our approval a contractor who must also
demonstrate an ability to comply with our standards and meet our then-current requirements. At the
present time, the contractors must have significant experience building similar restaurant projects and
must submit an AIA 305 Contractor's Qualification Statement to us for approval. Before you sign an
agreement with a contractor, you must give us any informafion about the contractor that we may
reasonably request from you. We will either approve or disapprove your proposed contractor within 15
days after we receive all of the information we have asked for.
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Insurance: Before the Facility opens for business, you must secure the insurance coverages
required in the Franchise Agreement. These coverages include the following:
(1)
Commercial General Liability Insurance, including broad form contractual
Iiabilit}^ broad form property' damogC) personal injury, advertising injury, completed operations,
products liability and fire damage coverage, in the amount of One Million Dollars CSl.OOO.OQQcnmbincd single limit, fire damage limit of SSO.OOO.^ per occurrence limit with a Two Million
Dollar (X2.000.000^ jxeneral afr^repate and a Twn Million Dollar rX2.0fl0.000^ nrnduct aggregate
limit: fire legal liabilitv of Fiftv Thousand Dollars (^SSO.OOO^. and a premises medical limit of
contain a Primary and
Sa.jWO.Two Thnnsand Five Hundred Dollars (?i;2.500^. This nc
vision in favor of the A<
(2)
" A l l Risks" coverage for the full cost of replacement of the FacilitvRejit^m-^nt
premises and all other property in which we may have an interest with no coinsurance clause for the
promigf»i
W r ronnmm<^nH Pnvrrngn n f lOOV^ n f tho r n p l n r o m p n t cost f o r tho F a c i l i t v ^ n d husincss
income insurance in an amount sufficient to cover v o u r continuing obligations to us i n the
event o f a covered loss.
(3)
Automobile liability coverage, including coverage of owned, non-owned and
hired vehicles, with coverage in amounts not less than One Million Dollars fSI.OOO.OOO) combined
single limit.
(4)
An "umbrella" policy providing excess coverage of the Automobile Liabilitv.
General I>iabilitv aqd Emplovers Liabilitv policies with limits of not less than $l,000,OOO.Qn£.
(5)
Worker's compensation insurance to provide statutory coverage in the applicable
state^ and Employers Liability Coverage with limits of $500,000/$500,000/$500,000 or, i f pennissible
under applicable law, any legally appropriate altemative i f supported by third party coverage issued
by g carrier reasonably acceptable to us. i f vou ( l i maintain ^n excess indei
tlover's liabilitv and/or a medical/disabilitv oolicv coverii
accidents, which policv or policies must be written bv a responsible carrier meeting
our requirements and contain such coverage amounts as vou and we mutuallv agree unon and fii^
mutually a^ree is aonropriatc. Such policies shall also include a waiver of subrogation in favor of
(6)
QtherSpcl^ otl^^r ihsuranccj as may be required by the landlord of the premises
and by the state or locality in which the Facilitt'Restaurant is located and operated.
In addition, if we authorize you to sell beer and/or wine and you elect to do so, you must comply
with applicable law and must obtain any addifional insurance we require in connection withrelated to
the offer and sale of beer and/or wine.
You must obtain coverage from responsible carriers rated " A V I I " or better by the A . M . Best
Company, Inc. and who are reasonably acceptable to us. You must keep this coverage in effect during
the term of the Franchise Agreement. You may elect reasonable deductibles. All of the policies must
name CiCi Enterprises, LP, our affiliates and the officers, directors, shareholders, partners, agents,
representatives, independent contractors, scn'unts and employees of each of them, as additional
insureds and must include a waiver of subrogation in favor of all those parties. Policies must provide the
additional insureds a 30-day advance notice in the event o f policy cancellation.
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Advertising and Promotional Materials: All advertising and promotional materials, signs,
decorations, paper goods, menus, forms, and stationery that you use in the Facility or on any Facility
catering or delivery vehicle (if authorized), and other items we designate, must bear our Marks in the
form, color, location and manner as required by us. In addition, you must conduct all your advertising
and promotion in any medium in a dignified manner. The advertising and promotional materials you use
must conform to our standards and requirements in the Manuals and our other writings. You must get
our approval before you use any advertising and promotional materials and plans, if we have not prepared
them or approved them during the 12-month period before you propose to use them. We and/or JMC
may provide advertising and promotional materials to you for use in local advertising.
Supplier Approval Procedure
Except for the items listed above under "Required Purchases" (which you must purchase
from us or a source we designate), and except for vehicles and the fresh produce you use at the Facility
(which you may purchase from any source as long as the item meets our standards and specifications),
you must obtain all food and beverage items, ingredients, supplies, materials, fixtures, fumishings,
exterior signage, equipment (including computer hardware and software) and other products you use or
offer for sale at the Facility only from suppliers we approve. These suppliers are those who demonstrate,
to our continuing reasonable satisfaction, their ability to meet our standards and specifications. All
suppliers we approve must have adequate quality controls and the capacity to supply your needs promptly
and reliably over an extended period of time. We have to approve any supplier in writing before you
make any purchases from that supplier. Our grant or denial of approval to use a particular supplier is
based in part on our determination of whether the supplier and its products meet or exceed our strict
specifications and standards for reliability. I f you wish to purchase, lease or use any items from a
supplier we have not approved (including any altemative supplier to JMC), you must submit a written
request for approval, or must ask the supplier to do so. You must permit our representatives to inspect the
supplier's facilities, and that samples from the supplier be delivered to us or to an independent laboratory
for testing. You or the supplier must pay the cost of the inspection and the cost of the test. (See Item 6.)
This procedure does not obligate us to approve any particular supplier. However, we will notify you
within 15 days after we complete our inspection and evaluation process of our approval or disapproval of
any proposed supplier. We reserve the right to re-inspect the facilities and products of any approved
supplier and to revoke our approval if the supplier fails to continue to meet our standards. We
lesignate as the exclusive source fi
e the number of a|
ourselves, anj^jij: affiliate^ or a single third
party supplier or distributor.^
item. Wgmay
mav receive pavments. fees, commissions or
wc and/or our affiliates
ments from
Our affiliate, JMC, supplies certain products and services to our franchisees. Some of our
officers have an indirect ownership interest in JMC as a result of their ownership interest in our and
JMC's common parent company. Otherwise, none of our officers owns an interest in any privately-held
suppliers, or a material interest in any publicly-held suppliers, to the franchise system. From time to
time, our officers may own non-material interests in publicly-held companies that may be suppliers to our
franchise system.
Purchasing Arrangements
As of the date of this disclosure document, you do not have to participate in any purchasing or
distribution cooperative. However, we and JMC do negotiate purchase artangements, including price and
other terms, with certain suppliers on behalf of the System. In doing so, we seek to promote the overall
DALO 1:1156054.911947893
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interests of our franchise network and our interests as the franchisor. It is our and JMC's policy,
whenever possible, to take any rebate offered by these suppliers as a reduction in the cost of the product.
This reduction in cost is then passed through to everyone who purchases under the artangement In some
circumstances (like when we have a limited purchasing history with the supplier) it is not possible to
negotiate the "up front" reduction in cost. In those cases, we and JMC may receive rebates based on
purchases by our franchisees. Most of these rebates are directed to the CiCi's advertising fund. (See
Item I I . ) We and JMC may retain other rebates to compensate us for our efforts in negotiating and
administering these purchasing programs.
Under certain beverage supply arrangements, rebates are paid to us based on the amount of
purchases made by company-owned and franchised restaurants. You must participate in these
arrangements. Some of these rebates are directed to the advertising fund, with a lesser amount rebated to
franchisees. During our 2M02Mi fiscal year, we received business development/marketing fund rebates
based on franchisee and company-owned Facility purchases from 1 beverage supplier totaling
£9.674.799.8.620.138. Of that amount $8>749.864 S8.018.318 was added to the advertising fund
described in Item 11 and spent for production and placement of advertising for the System, and $899^935601.820 was rebated to franchisees.
We also received business development/marketing fund rebates
based on franchisee and company-owned Facility purchase from a second beverage supplier totaling$2.105.461. S2.054.870. of which the entire amount was added to the advertising fund described in Item
II.
For our 20102Mi fiscal year, we had total revenues of $34.459.450. S32.418.198. An
insubstantial amount of our revenue (not exceeding $10,000 or 0.02%) was from franchisee purchases of
advertising and promotional materials from us. Our affiliate, JMC, had S148.190.371 $147.917.298 in
revenues from purchases by our franchisees in fiscal 2MO^2011. JMC's revenue information was
determined from JMC's records.
When deciding whether to grant new franchises, we consider many factors, including compliance
with the requirements described in this Item 8.
ITEM 9
FRANCHISEE'S OBLIGATIONS
This table lists your principal obligations under the Franchise Agreement, Development
Agreement and other agreements. (See note (1)) It will help you find more detailed information
about your obligations in these agreements and in other items ofthis disclosure document.
Obligation
a. Site selection and acquisition/lease
Section in Agreement
Disclosure Document
item
Site Selection Addendum to Franchise
Agreement; Section VLC. of
Development Agreement
Sections V., VI., VII. and XII. of
Franchise Agreement
Items 8 and 11
c. Site development and other
pre-opening requirements
Sections II., VI. and XII. of Franchise
Agreement
Items 1,8 and 11
d. Initial and ongoing training
Sections V. and VI. of Franchise
Agreement; Paragraph 3 of CiCi's To Go
Addendum to Franchise Agreement;
Items 6 and 11
b. Pre-opening purchases/leases
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Items 5, 6, 7, 8, 9 and
11
Obligation
e. Opening
f
Fees
g. Compliance with standards and
policies/Operating Manual
h. Trademarks and proprietary
information
Section in Agreement
Work Evaluation Agreement
Sections IL and VI. of Franchise
Agreement
Sections IV., V., VIL, VIII., X., XL, XII.,
XIV., XVIII., and XIX. of Franchise
Agreement; Sections 11., II!., V., VI., and
VIII. of Development Agreement;;
Paragraph D to the Site Selection
Addendum to the Franchise Agreement;
Paragraph 5 of CiCi's To Go Addendum
to Franchise Agreement
Sections IL, IIL, V., VL, VIL, VIIL, IX.,
X., XL and XII. of Franchise Agreement;
Sections IL, IIL, V., VI. of Development
Agreement
Sections IX. and X. and Attachment D of
Franchise Agreement; Section IX. and
Attachment A to Development
Agreement; Paragraphs 7 and 8 of CiCi's
To Go Addendum to Franchise
Agreement; Paragraph 6 of CiCi's To Go
Addendum to Development Agreement;
Paragraph 2 of Work Evaluation
Agreement
Disclosure Document
item
Items 7 and 11
Items 5,6,8,11
Items 8, 11, 14 and 16
Items 11, 13 and 14
Secfions VIL, VIILA. and VIILH. of
Franchise Agreement; Paragraph 4 of
CiCi's To Go Addendum to Franchise
Agreement
Section VII. of Franchise Agreement
Items 8 and 16
Section III. of Development Agreement
Item 12
Section V l l . of Franchise Agreement
Item 8
m. Maintenance, appearance and
remodeling requirements
n. Insurance
Sections II. and VII. of Franchise
Agreement
Section XII. of Franchise Agreement
Items 8, 11, 16 and 17
0. Advertising
Section VIII. of Franchise Agreement;
Paragraph 5 of CiCi's To Go Addendum
to Franchise Agreement
Sections IX., XIIL, XIV., and XV. of
Franchise Agreement; Sections VIII. and
XL of the Development Agreement;;
Paragraph 3 of Work Evaluation
Agreement; Section 8 of the Services
Agreement
Section VI., VIL, X. and XIV., of
Franchise Agreement; Sections VI. and
VIII. of Development Agreement
Sections IV., VII. and XI. of Franchise
Agreement; Section IL of the
i.
Restrictions on products/services
offered
j.
Warranty and customer service
requirements
k. Territorial development and sales
quotas
I. Ongoing product/service purchases
p. Indemnification
q. Owner's
participation/management/staffing
r.
Records and reports^'*
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Item 8
Items 7 and 8
Items 6, 8 and 11
Item 6
Items 1, 11 and 15
Item 6
Obligation
s. Inspections and audits
t.
Transfer
u. Renewal (or Extension of Rights)
v. Post-termination obligations
w. Noncompetition covenants
X. Dispute resolution
Section in Agreement
Development Agreement
Sections II., V., VIL and XL of Franchise
Agreement; Paragraph D to the Site
Addendum to the Franchise Agreement
Section XIV. of Franchise Agreement;
Section VIII. of Development Agreement
Section III. of Franchise Agreement;
Section III. of Development Agreement
Section XVIII. of Franchise Agreement;
Section VII. of Development Agreement
Section X. and Attachment D. of
Franchise Agreement; Section IX. and
Attachment A. of Development
Agreement
Section XIX. of Franchise Agreement;
Section XII. of Development Agreement
Paragraph 4 of Work Evaluation
Agreement
Disclosure Document
item
Items 6, 8 and 11
Items 6 and 17
Items 6 and 17
Items 6 and 17
Item 17
Items 6 and 17
(1)
You must submit to us monthly financial statements in the "PLUS" system format using
our electronic "PLUS" system.
ITEM 10
FINANCING
Investment Program
For a limited time and up to a maximum program amount of $5,000,000, we offer qualified
multi-unit Developers that meet our criteria an opportunity to obtain from us or one ofour subsidiaries or
affiliates cash equity investments in your Restaurants. Our offer of equity investments described in this
section is optional.
We offer an "Investment Program," in which we offer to invest in Restaurants developed by
qualified multi-unit Developers that agree to develop 6 or more new Restaurants over an agreed-upon
time period not to exceed 5 years. If you choose to participate and we approve you as qualified, we or
one of our subsidiaries or afflliates will provide up to $100,000 of equity investment per Restaurant The
investment that we will make in each Restaurant will entitle us to receive non-voting membership
interests (equity) in each limited liability company or non-voting stock (equity) in each corporation that
owns each Restaurant (including the franchise, Restaurant's equipment, and all other Restaurant assets).
Our membership interests or stock will entitle us to receive a preferential retum of our funds on the
occurtcnce of a sale (of the Restaurant, the entity that owns the Restaurant or all ownership interests in
that entity) or dissolution of the entity that owns the Restaurant (each, a "liquidation evenf).
You are under no obligation to accept any equity investment from us, and we retain, in our sole
discretion, the right to make our own decision to go into business with you or any other person or group
of people to open Restaurants. Our approval of you as a developer or franchisee and our willingness to
enter into a Development or Franchise Agreement with you is independent of, and cannot be constmed
as, a decision by us to become your co-investor in any Restaurants.
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Our guidelines for making equity investments like those described in this Item are listed in
Exhibit M to this Franchise Disclosure Document. Among other things we will invest only if you provide
at least $125,000 in equity and only with developers that own a current non-competitive business, operate
that business with high operating standards; have a strong balance sheet and credit; have sufficient access
to capital; and have an existing infrastructure to support growth.
Ifyou decide to participate and are accepted into the Investment Program, both you and we will
become members of a limited liability company or shareholders of a corporation which will own the
Restaurants. You and we will each sign an operating agreement or shareholders agreement that defines
each party's mutual rights and responsibilities. Subject to the requirements of the operating agreement or
shareholders' agreement to operate consistent with the standards outlined in the Manuals, you will have
great discretion in the operation of your Restaurants. We will not interfere in the daily operation of the
Restaurants and you cannot expect us to provide you with any assistance in the operation of your
Restaurants.
Our $100,000 equity investment in each Restaurant will be provided when each Restaurant
begins construction; funding installments will be based on the need to fund the construction as evidenced
by supporting documentation. You must pay us a $250 monthly investment monitoring fee. You are not
required to buy out our investment or pay any interest or finance charges on our investment. However, if
you buy out our equity investment at cost ($100,000) within the first 3 years after the investment is fully
funded, we will waive the $250 monthly monitoring fee that you would otherwise be required to pay for
the next Restaurant you develop under this program.
The investment that we will make in each Restaurant is 100% equity. You will not be required
to guarantee any portion of the amount of equity investment that we will make in each Restaurant. We
will not guarantee any loan or lease for any Restaurant or other debt incurred by the company you and we
form to operate the Restaurants. However, any such loan or lease must be acceptable to us.
The Investment Program does not apply to relocations, transfers, non-tradifional developments,
CiCi's To Go Units, or any intemational developments. The program is limited to certain geographic
markets, currently Utah and select markets in Southem Califomia and South Florida. Certain wellqualified applicants may be approved to participate in the program in multiple markets.
Your participation in the Investment Program does not require you to waive defenses or other
legal rights or bar you from asserting a defense against us for our equity investments. We have no
practice or intent to sell, assign, or discount to a third party all or part of the equity investments.
If you require additional funds, you must obtain any financing on your own or fund the cost of
your Restaurants from intemally-generated funds.
JMC Financing of Initial Equipment
Our affiliate, JMC, will consider fmancing your purchase of the initial equipment package if you
qualify on the following terms.
Item Financed:
Initial equipment packaged when purchased through JMC
Source of Financing:
JMC
Down Payment:
50% ofthe total equipment package cost is required.
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Amount Financed
Purchase price of the equipment minus the down payment
Term:
Earlier of 8 to 10 weeks after order is placed or prior to opening
Interest Rate:
If paid when due, 0% (unless you request and we agree to extend the standard
term, in which case we may charge interest); 18% per annum or the highest legal
rate if you fail to pay when due
Monthly Payment:
Varies, based on the amount financed
Prepay Penalty:
None
Security Required:
of
Collateral interest in the equipment purchased and proceeds; personal guaranty
franchisee owner
Liability upon Default: Acceleration of debt; payment of default interest, late charge and collection
expenses, including attorneys' fees, foreclosure of liens and security interests
Loss of Legal Right
on Default:
Notice of default is not waived; waive notice of demand for payment, diligence
in filing suit, protest, notice of protest, notice of intent to accelerate, notice of
acceleration, presentment for payment and notice of dishonor
Also see the Promissory Note, Guaranty and Security Agreement attached to this disclosure document as
Exhibit Jl. JMC has no practice or intent to sell, assign, or discount to a third party all or any part of the
financing arrangement.
Except for the above, we do not offer direct or indirect financing, and we do not guarantee your
notes, leases or other obligations.
ITEM 11
FRANCfflSOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING
Except as listed below, we are not required to provide you with any assistance.
Pre-Opening Obligations: Before you open your Facility we will:
1.
Give you the site selection assistance we deem advisable. (Site Selection Addendum to
Franchise Agreement; Development Agreement, Section V.A.)
You must select a site for the Facility in the Designated Area described in the Franchise
Agreement. If the Franchise Agreement is signed under a Development Agreement, the Designated Area
will correspond to the Development Area. We must approve your proposed site. We will give you the
site selection counseling and assistance that we think is advisable. You must engage a licensed real
estate broker approved by us in connection with the selection and acquisition of a site for your Facility.
You may have to, at your expense, evaluate the demographics of the market area (including the
population and income level of residents in the market area), size and other physical attributes of the
location, proximity to residential neighborhoods and proximity to shopping centers, entertainment
facilities and other businesses that attract consumers and generate traffic. Your failure to present an
acceptable site may be a material default under the Franchise Agreement or Development Agreement, as
applicable, for which the Franchise or Development Agreement may be terminated.
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We will also make an on-site evaluation of your proposed site. (See Items 5 and 7.) Before we
make any on-site evaluation, you must: (i) give us a description of the site, including evidence that the
site satisfies our site selection requirements including a letter of intent or other evidence that confirms
your favorable prospects for obtaining the site and (ii) following our preliminary approval, you must also
give us a copy of the proposed purchase agreement or lease, as applicable, and all other information and
materials that we may reasonably require. All such information must be submitted in the form and
delivered in the manner we'specify. We will respond to the request for site approval in a timely manner
after we receive this information, prepared in the required format. We will have no obligation to act on a
request for site approval until we have received all required materials delivered in the format and manner
we require. You must acquire the site for the Facility, at your expense, within 90 days after we approve
it. You must obtain our approval of any purchase or lease contract before you sign it and pay reasonable
attomeys' fees we may incur to review them. We may approve or disapprove your proposed site as the
location for the Facility in our sole discretion. (See Items 5 and 8.) A lease will not be approved unless it
gives you the right to occupy the premises for the term of the Franchise Agreement-a«d, includes an
addendum which contains covenants in substantially the same form as those contained in Attachment E
to the Development Agreement or Schedule 1 to the Site Selection Addendum to the Franchise
Agreement, as applicable^, and satisfies our lease compliance review. You are responsible for the
costs ofthe lease compliaq^:e review. If you are occupying a location owned by a related party, you and
the owner must enter into a formal lease containing arms-length terms. You cannot relocate the Facility,
nor renew or amend the lease unless you first get our written consent.
In order to preserve a site, we may at times have leased a locafion in the Designated Area before
beginning discussions with you regarding the franchise. In that circumstance, we may offer you the
opportunity to evaluate the location and if you select it as the location for the Facility, we will assign the
lease to you using a lease assignment in substantially the same form as the Assignment of Lease attached
as Exhibit i ^ f i to this disclosure document At the time we assign the lease, you must reimburse us for
any expenses we incurred to secure the location. (See Item 5.)
Neither our approval of a site or our assignment of a lease to you is a representation, promise,
wartanty or guaranty that the Facility operated at that location will be profitable or successful.
2.
Provide the on-site evaluations we believe are necessary for site approval.
Selection Addendum to Franchise Agreement; Development Agreement, Section V.B.)
(Site
3.
Loan you a set of prototypical architectural and design plans and specifications for a
CiCi's Pizza Restaurant or CiCi's To Go Unit, as applicable. You must adapt these plans at your
expense for constmction of the Facility. (Franchise Agreement, Section V.A.)
4.
Provide you access to 1 set of the Manuals. We have the right to revise the contents of
the Manuals at any time. (Franchise Agreement, Secfion V.B.; Development Agreement, Section V.D.)
5.
Provide advertising and promotional materials we develop for local advertising at a
reasonable cost to you. We have the right to review and approve all advertising and promotional
materials that you propose to use. (Franchise Agreement, Section V.E.)
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6.
Provide you a list of approved suppliers. (Franchise Agreement, Section V.H.)
7.
Provide an initial training program for your Managing Principal, Operator and Managers.
(Franchise Agreement, Secfions V.I. and VI.F.(l).; Development Agreement, Section V.C., CiCi's To Go
Addendum to the Franchise Agreement, Secfion 3.)
8.
At our discretion, provide on-site opening assistance at the Facility.
Agreement, Sections V.J. and VI.F.(3).)
(Franchise
Typical Length of Time Before You Open Your Restaurant
We estimate that it will be approximately 150 to 380 days for a CiCi's Pizza Restaurant and 120
to 210 days for a CiCi's To-Go Unit from the time you sign the Franchise Agreement to the
commencement of the Facility's operations. This time may be shorter or longer depending on the time
needed to obtain an approved site; to obtain financing; to obtain the permits and licenses for the
constmction and operation of the Facility; to complete construction or remodeling as it may be affected
by weather conditions, shortages, delivery schedules and other similar factors; to complete the interior
and exterior ofthe Facility, including decorating, purchasing and installing fixtures, equipment and signs,
and landscaping; and to complete preparation for operating the Facility, including purchasing inventory
and supplies. Unless we give you a written extension, you must open the Facility and begin business
within (i) 120 days after you sign the Franchise Agreement if the Franchise Agreement is signed pursuant
to a Development Agreement or (ii) 380 days after you sign the Franchise Agreement if there is no
Development Agreement.
Continuing Obligations: During the operation of your Facility, we will:
1.
Visit the Facility and evaluate its products and services at times we reasonably
determine. (Franchise Agreement, Section V.D.)
2.
Provide advertising and promotional materials we develop for local advertising at a
reasonable cost to you. We have the right to review and approve all advertising and promotional
materials that you propose to use. (Franchise Agreement, Section V.E.)
3.
Give you advice and written materials on the techniques of managing and operating the
Facility, including new developments and improvements in restaurant equipment, food products,
packaging and preparafion. (Franchise Agreement, Secfion V.F.)
4.
At our discretion, at various fimes, make available to you for resale to your customers
certain merchandise idenfifying the System, like pre-packaged food products and CiCi's memorabilia, at
a reasonable cost to you. We also may make available to you certain restaurant equipment and decor
items at a reasonable cost. (Franchise Agreement, Section V.G.)
5.
Provide additional training programs, seminars and other related activities, which your
Managing Principal, Operator, General Manager, Assistant Managers and other Facility personnel may
have to attend. (Franchise Agreement, Sections V.I. and VI.F.(2)).
6.
At your reasonable request or as we find appropriate, provide certain on-site remedial
training for your Facility personnel (Franchise Agreement, Sections V.I. and VI.F(4)).
7.
Administer the CiCi's advertising Fund. (Franchise Agreement, Section VIII.C.)
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Advertising: We have established an advertising fund ("Fund") to advertise the CiCi's brand and
System on a regional or national basis. Each CiCi's Pizza Restaurant must contribute the greater of
$2,300 or 3% of Net Sales to the Fund each accounfing period, and each To Go Unit must contribute the
greater of $1,000 or 3% of Net Sales to the Fund each accounting period. On an annual basis, we may, in
our discretion, increase the flat dollar amount component of the Advertising Fund contribution (that is,
the $2,300 for Restaurants and the $1,000 for CiCi's To Go Units) based on the percentage change in the
Standard Quotations and Data resource (SQAD) or any comparable national, regional, or market media
index we designate for the preceding year. (See Item 6)
You must make your contribution by electronic funds transfer on the fifth business day following
the end of each accounting period for that accounting period. There are 3 accounting periods in each
calendar quarter. The first accounting period in each quarter is 5 weeks, and the remaining 2 accounting
periods in the quarter are 4 weeks each. You also may have to allocate all or part of your Fund
contribution to expenditures for required Local Advertising (if any) or to a Cooperative (described
below) and to reallocate any of those monies to the Fund. It is our policy for company-owned Facilities
to contribute to the Fund on the same basis that our franchisees contribute.
Until December 12, 3008 when AMF was dissolved, Fund contributions were held by
Awesome Marketing Fund, a non-profit corporation ("AMF"). Following the dissolution of AMF,
weWe hold and administer Fund contributions and have sole discretion to approve the creative concepts,
materials and media used in the programs and their placement and allocation. We may use the Fund to
satisfy the costs of maintaining, administering, directing, preparing and placing advertising. This
includes the cost of preparing and conducting television, radio, magazine and newspaper advertising
campaigns; direct mail and outdoor billboard advertising; Website development, digital media and social
media, maintenance and updating; public relations activities; employing advertising and/or public
relations agencies; and personnel and other departmental costs for advertising that we administer, incur
or prepare on behalf of the Fund. We will keep your Fund payments in a separate account and will not
use them to pay any of its general operating expenses, except for reasonable administrative costs and
overhead (if any) that we incur in administering or directing the Fund and advertising programs. We will
operate the Fund solely as a conduit for collecting and spending the advertising contributions described
above.
We will prepare an annual statement of the Fund's operations and will make this statement
available to you on request We are not required to have the Fund statements audited.
Fund contributions that are not spent in the year in which they accme are carried over to
succeeding years. Historically, we have spent virtually all Fund monies in the year in which they were
contributed. Although the Fund is intended to be perpetual, we may terminate the Fund. We will not
terminate the Fund, however, until all Fund monies have been spent for advertising or promotional
purposes or retumed to the contributors, without interest, on the basis of their respective contributions.
The following is a percentage breakdown of the use of the Fund for our 20102011 fiscal year:
Media
Production
942fi%
aifl%
100.0%
100%
The Fund is not required to make any expenditures that are equivalent or proportionate to your
contribution to the Fund or to ensure that any particular franchisee benefits pro rata from the placement
of advertising. Except for advertising funds spent on Website development and maintenance (a portion
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of which may include soliciting the sale of franchises using the Website), no advertising fimds are used
to solicit the sale of franchises.
Our Franchise Advisory Council ("FAC") provides advice to us on various matters, including
advertising. The FAC serves in an advisory capacity only and has no operational or decision-making
power. Currently, the FAC is composed of 6 members, that are appointed by us. Those members serve 2
year terms. At the end of the 2 year term, we appoint new members to serve on the FAC. We retain the
right and power to change this voting artangement as well as all other aspects of the FAC and to dissolve
the FAC at our sole discretion.
In addition to your required Fund contributions, you may curtently spend any amount you think
is appropriate on local advertising for the Facility in your Area of Primary Responsibility described in
Item 12. Although the amounts you spend on local advertising are currently in your discretion, we may
require you, on written notice, to spend up to 2% of monthly Net Sales on local advertising in addition to
your Fund contributions. We can also allocate required local advertising expenditures to a Cooperative
(described below) and may reallocate any required expenditure for local advertising to the Fund. You
must give us an advertising expenditure report to show your compliance with the local advertising
requirement, at the same time as the Net Sales report described in Item 6. However, until we require
local advertising, you must only give us the report when we request it.
Your Fund contributions and local advertising spending are separate obligations. Currently, you
must contribute the greater of $2,300 or 3% of your Net Sales to the Fund (or the greater of $1,000 or 3%
of Net Sales for To Go Units) and you are not required to make any minimum expenditure on local
advertising. However, we have the right to increase the $2,300/$ 1,000 component of your Fund
contribution as set forth in Item 6 and Section VIII.C. of the Franchise Agreement and to require you to
spend up to 2% of Net Sales on local advertising. If we require you to spend up to 2% of Net Sales on
Local Advertising, your total advertising obligation (Local and Fund) may equal 5% of Net Sales.
We can designate any geographic area in which 2 or more CiCi's Pizza Restaurants are located
as a region for purposes of establishing an advertising Cooperative. If we decide to establish a
Cooperative, the members ofthe Cooperative will be all CiCi's Pizza Restaurants in that area, whether
company-owned or franchised. We will determine in advance how each Cooperative will be organized
and govemed and when it must start operation. Each Cooperative will be organized for the exclusive
purposes of administering advertising programs and developing (subject to our. approval) promotional
materials for use by its members in local advertising. I f a Cooperative has been established for a
geographic area where your Restaurant or Unit is located when you sign the Franchise Agreement, or if
any Cooperative is established during the term of your Franchise Agreement, you must sign all
documents we require and become a member of the Cooperative.
We may require you to contribute any required local advertising expenditure to the Cooperative.
If we do, we will apply your payment toward satisfaction of your required local advertising expenditure.
However, if the members of a Cooperative agree (subject to our approval) to make a larger Cooperative
contribution than that required by the Cooperative's goveming documents, then the excess of that larger
contribution over the required amount will not be applied toward your required local advertising
expenditures. You may have to reallocate any Cooperative contribution to the Fund.
If established, all contributions to the Cooperative will be maintained and administered under the
documents goveming the Cooperative. Cooperatives will be operated solely as a conduit for the
collection and expenditure of the Cooperative fees for the purposes described above. No advertising or
promotional plans or materials may be used by the Cooperative or fumished to its members without our
prior approval.
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You must have a grand opening promotion for the Facility under our written specifications. This
promotion will generally begin shortly after the opening of the Facility. We must approve all advertising
items and methods (including the media) that you use for the grand opening promotion. Amounts you
pay for the grand opening promotion will not be credited toward any of your other advertising
obligations.
You must also place a Yellow Pages trademark listing and other business listings we require in
your local market area. You may not apply any amount you pay for the Yellow Pages trademark or other
business listings toward your other advertising requirements.
At our request, you must display at the Restaurant in the places we designate a display, counter
cards, brochures, or other items promoting CiCi's Pizza franchises that we require, but we will provide
these materials to you at no charge.
We must approve all advertising (including Intemet advertising) before you use it if we did not
prepare it or previously approve it within the 12 months preceding its proposed use. You may not
advertise, promote, post or list information relating to the Facility on the Internet (through the creation of
a Website or otherwise). You must comply with our social media policy for franchisees, and we may
change our policy over time.
We advertise the Facilities and the services they offer in various media, including television,
radio, magazines and newspapers, direct mail, digital media and social media, and outdoor billboard
advertising. We curtently use 1 national advertising agency for production and placement of advertising.
Advertising is currently conducted on a national basis, but may in the future be conducted on a regional
and local basis through the Fund, local advertising, and (if established) the Cooperatives.
Electronic Cash Register and Computer Systems
CiCi's Pizza Restaurants and To Go Units must purchase, install, and use a point of sale system
supplied by XPIENT Solutions ftho "XPIENT POS Svstem"^. our dosifnnted vondora CiCi's
Solutions is our onlv CiCi's Approved POS Svstem vendor, although we mav approve others in the
fn^p^-^. You must purchase a license for the computer software used to run the XPIENTCiCi's
Approved POS System. The ^>gBEN¥CiCi's Approved POS System includes hardware (consisting of a
minimum of 2 registers, terminals, biometrics, thermal printers, report printers, cash drawers) and
software (consisting of point-of-sale software, gift card software, credit card software, inventory
modules, scheduling modules, and menu maintenance software). Currently, the cost to obtain the
XPIENTCiCi's Approved POS System and computer is approximately $12,100 to $14,000 plus
engeingl2.000 to $18.000 which includes initial training, maintenance and annual maintenance feesilv $2.570 to $3.500.. The cost for Xfnrmitv. snpport and updates for snbseqnent
$200 a month. We will have independent access to the information that will be
generated or stored in the XPIENTCiCi's Approved POS System, which includes ali transactional data,
summary level data and point of sale reports. There is no contractual limitation on our right to access
this information. Curtent franchisees may continue using their curtent POS systems, but they must
convert to the XPIENTCjCi's Approved POS System upon renewal or transfer, and we may offer
incentives for current franchisees to voluntarily convert to the XPIENTCiCi's Approved POS System
prior to renewal or transfer.
In addition to the XPIENTCiCi's Approved POS System, you must install and maintain an
IBM-compatible computer at the Facility that is capable of running the software that we require and that
operates on a Microsoft Windows XP or higher operating system. You must maintain an intemet
cormection (with email capability). You may use any intemet provider that permits you to connect using
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a high speed intemet service such as DSL or broadband. You must obtain from us and install and
maintain the CiCi's NotesEnterprise Applications Software, which enables you to obtain updates and
amendments to the Manuals and report your sales to us electronically in the format of data that we
require. On notice, you must license from us, or others we designate, any computer software we develop
or acquire for use by CiCi's Pizza Restaurants or CiCi's To Go Units.
You must install any other hardware or software for the operation of the Facility that we may
require in the future, including any enhancements, additions, substitutions, modifications, and upgrades.
Aside from the maintenance provided bv XPIENT Solutions the CiCi's Approved provider.
for which you are required to pay the ongoing annual maintenance fees disclosed above, neither we, or
our afflliates, nor any third parties are required to provide ongoing maintenance, repairs, upgrades, or
updates to your computer system.
Manuals
We will provide you access to our confidential Development Manual and Franchise Operations
Manual after you execute the Development Agreement or Franchise Agreement. Before you sign the
Agreements, you may review a copy of the Manuals after signing a Confldentiality Agreement in the
form attached as Exhibit ^ to this disclosure document. We consider the contents of the Manuals to be
proprietary, and you must treat them as confldential. You may not make any copies of the Manuals.
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Training:
Training for Developer Managing Principals
If you arc applying for a Development Agreement and are new to our system^ your
Managing Principal must attend, and successfully complete to our satisfaction, an initial 1 week
orientation program in Coppell, Texas (near Dallas) to meet with our officers and other
management personnelcertification for Operators and all Managers in a Dallas Corporate Training Restaurant/Facilitv.
Work Evaluation Program for Operators
As a part of our franchise application process, any Operator (who may or may not be the same
person as your Managing Principal) has an opportunity to participate in a CiCi's work evaluation
program so that candidates can get a better idea of what is expected, without compensation, in one ofour
company-owned Restaurants. Attendance for this one day work evaluation program is not mandatory,
but highly suggested so that the Operator may fully understand the expectations of operating a CiCi's
Pizza Restaurant. Before beginning our work evaluation program, you and the participant must sign the
Work Evaluation Agreement attached as Exhibit F to this disclosure document which govems our
relationship during the work evaluation program.
Management Training for Operators
The person serving as your Operator also must participate in, and successfully complete to our
satisfaction, our management training program not later than 300 days after-you-sign-the-Franehise
Agrccmcntbefore the Opening Date of vour Restaurant. If the person vou initially appoint as vour
Operator fails to satisfactorilv complete the management training program, then within 30 davs
after we notify vou. vou must appoint a new Operator to enter the management training program.
In addition to anv initiafives vou make to identify a new Operator, we mav require vou to use a
recruiting service we apnrove to assist vou in identifving a new Operator. Any additional or
replacement Operator you later designate must also satisfactorily complete the initial training program
within a reasonable period of time following his appointment. We evaluate management trainees each
week and may terminate a person's participation in the program at any time. The initial training program
for CiCi's Pizza Restaurants and CiCi's To Go Units differs as discussed below and illustrated in the
following charts. Notes to both charts appear following the second chart. As part of initial training, we
curtently require all Operator candidates to complete a personality/skills assessment, which we wili
evaluate, with other factors, to determine a person's qualifications to serve as an Operator.
Initial Training for Operators- CiCi's Pizza Restaurants
Our management training program for CiCi's Pizza Restaurants ranges from approximately 4 to
12 weeks, depending upon your Operator's previous operating experience. However, completion of the
program is dependent upon satisfactory performance.
Initial training for Operators with no previous management experience in the CiCi's Pizza
network is typically 8 weeks, although we may require an additional 4 weeks of on-the-job experience if
we determine it to be needed. I f your Operator is an existing CiCi's Pizza Restaurant franchisee or
certified manager who has previously completed our initial training program, up to 4 weeks of additional
initial training may be required.
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During the initial phase of the program, trainees must spend approximately 4 weeks in a CiCi's
Pizza Restaurant completing all of the requirements detailed in our management training syllabus.
Successful completion of the syllabus includes, but is not limited to, meeting positive time standards,
proper execution of each role, completion of classroom material and demonstrating a consistent level of
expertise. Following that 4-week period, trainees must attend a 1-week certification process in a CiCi's
corporate training Restaurant. Requirements for certification include passing a written examination with
a score of 95% or better and a passing score while running actual shifts during the fifth week of training,
designated as certification week. In addition, every trainee must complete a one week GM Degree Class
and receive certification. The following table illustrates the initial 6 weeks of management training for
trainees with no previous management experience in CiCi's Pizza Restaurants. After the initial 6-week
phase of the management training program, trainees will work for an additional 2 to 6 weeks at a
company-owned or franchised CiCi's Pizza Restaurant. Two weeks are spent working and participating
in an actual new Restaurant opening.
The subject covered, approximate hours of classroom and on the job training, and other
information about our initial training program for Operators of CiCi's Pizza Restaurants are described
below:
TRAINING PROGRAM
for CiCi's Pizza Restaurants'-^*
(Initial 6 week management training and certification)
(See the notes following the training chart for CiCi's To Go Units, which also apply to this chart)
Subject
Hours of
Classroom
Training
(See Note I)
10
Hours of
On-The-Job
Training
(SeeNote 1)
115
Leadership and Motivation
5
25
Coppell, TX
Reaching Labor Goals
0
10
Coppell, TX
Open/Mid/Closing Checklists,
Weekly/Monthly Cleaning
Chart
3
40
Coppell, TX
Guests First Roadmap
1
55
Coppell, TX
Basic Business Skills
50
0
Coppell, TX
1
10
Coppell, TX
GM Degree Class
33
22
Coppell, TX
TOTAL HOURS: 380
103
277
Station Trainmg and Execution
Certification
Location
(See Note 2)
Coppell, TX
The initial training program for Operators who have previous management experience in the
CiCi's Pizza network is typically 4 weeks. The 4 week program includes the one week GM Degree Class
and certification and 2 weeks of on-the-job experience participating in a new Restaurant opening and 1
week of classroom training.
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Initial Training for Operators - CiCi's To Go Units
Our management training program for CiCi's To Go Units ranges from 0 to 4 weeks, depending
upon your Operator's previous operating experience. However, completion of the program is dependent
upon satisfactory performance.
If your Operator has no previous management experience in the CiCi's Pizza network, our
management training program for CiCi's To Go Units is approximately 4 weeks. During the initial 3
week phase of the program, trainees must spend 2 weeks in a CiCi's Pizza Restaurant or CiCi's To Go
Unit completing all of the requirements detailed in our management training syllabus. Following that 2week period, trainees must attend a 1-week certification process in a CiCi's corporate training
Restaurant. Requirements for certification include passing a written examination with a score of 95% or
better and a passing score while mnning actual shifts during the 1-week certification period. Following
the initial 3 week phase of the managementtraining program, trainees will work for an additional I week
at a company-owned or franchised CiCi's Pizza Restaurant or CiCi's To Go Unit. This time may be
spent working and participating in an actual new Restaurant or CiCi's To Go Unit opening.
The subject covered, approximate hours of classroom and on the job training, and other
information about our initial training program for Operators of CiCi's To Go Units are described below:
TRAINING PROGRAM
for CiCi's To Go Units^i-^)
(Initial 3 week management training and certification)
(See the accompanying notes which follow this chart)
Position Training
Hours of
Classroom
Training
(SeeNote 1)
5
Hours of
On-The-Job
Training
(SeeNote 1)
25
Coppell, Texas
Manager Training
10
30
Coppell, Texas
Business Skills
25
5
Coppell, Texas
Development/
Application
55
10
Coppell, Texas
TOTAL HOURS: 165
95
70
Subject
Location
(See Note 2)
Notes to the 2 preceding charts:
(1)
Our management training program is subject to change without notice to reflect updates
in the materials, methods and manuals and changes in personnel. The subjects taught and the time
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periods allocated for each subject may vary based on the experience of the people being trained. Any
Operator you later designate must also satisfactorily complete the management-training program.
(2)
Our management training program is offered as needed during the year in
Coppell, Texas (near Dallas) or in other locations that we may designate. I f this is vour first
Restaurant, vou will be required to conduct vour training and certification for Operators and all
Managers in a DaHla^ Corporate Training Restaurant/Facilitv. All certifications must be maintained
to open a new Facility. To this end, trainees must actually run shifts at least 1 day during every 30 days.
The materials used in training include the manuals, FIT Workbook, Certification Forms, as well
as other presentation materials, including PowerPoint presentation and required reading handouts. Our
training programs are curtently administered and directed by Steve Hawter, whose experience is listed in
Item 2. Certified restaurant managers and our training managers will assist Mr. Hawter. All training
managers have served as General Managers of company-owned CiCi's Pizza Restaurants and typically
have 1 to 3 years' experience in a CiCi's Pizza Restaurant before joining our training staff. We also
draw upon the substantial experience of our Brand Excellence Managers and other management
personnel in conducting training.
General and Assistant Manager Training
No later than 15 days before a Facility begins operations, your General Manager and 2 Assistant
Managers (together, your "Managers") must have satisfactorily completed the 5 week management and
certification component of our managementtraining program for CiCi's Pizza Restaurants or the 3 week
management and certification component of our management training program for CiCi's To Go Units,
as applicable. Additionally, any Manager you later designate must also complete to our satisfaction the
initial program. Every Restaurant must maintain a General Manager who has completed the GM Degree
training program of one week.
Other Training Information
If the franchise is for your first Facility, we will provide instmctors, training materials and other
training information for the initial management training program at no additional charge. If the franchise
is for your second Facility, we have the right to charge a fee for training, although we do not currently do
so.
We will determine whether your management personnel have satisfactorily completed our initial
management training. I f any of them fail to satisfactorily complete our initial management training
program, you must cure the failure within the permitted time period. We have the right to charge a
reasonable fee for any initial managementtraining we provide to any replacement or successor Managing
Principal, Operator and Manager. (See Item 6.)
Your Managing Principal, Operators, Managers and any other Facility personnel we select may
have to attend additional training programs and seminars we offer. We will provide the instructors and
training materials for all of these programs and seminars. We have the right to charge a reasonable fee
for these additional training programs and seminars. (See Item 6.)
Unless otherwise agreed, you are responsible for all expenses you and your personnel incur for
any training program, whether initial or additional. Expenses may include costs of travel, lodging, meals
and wages. (See Item 7.)
For the Facility opening, we may provide you with on-site opening assistance. We will decide
the number of trained representatives and the period for which we may provide assistance based on our
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assessment of your operational requirements. As a matter of current policy, if the Facility is your first or
second Facility, we will generally provide you with opening assistance for up to 7 days; if the Facility is
your third, or a later Facility, we will not generally provide you with opening assistance. You do not
have to pay any fee for opening assistance, although, for your second Facility, as well as any other
additional Facilities you establish, you may have to reimburse us for any expenses our representatives
incur, like the costs of travel, lodging and meals.
ITEM 12
TERRITORY
We offer Franchise Agreements and Development Agreements for multiple franchises. Under a
Franchise Agreement, we will grant you a Protected Area, which is a defined geographic area
surrounding your Restaurant or Unit within which you will receive certain protections and rights
(discussed more fully below). Under a Development Agreement, we will grant you a Development Area,
which is a larger defined geographic area within which you will have certain rights to develop multiple
Restaurants or Units (discussed more fully below). Your rights and obligafions ih the Development Area
under a Development Agreement are distinct and separate from your rights and obligations in a Protected
Area under a Franchise Agreement. If your Development Agreement expires or is terminated, your only
remaining territorial rights will be those territorial rights in Protected Areas under any then-existing
Franchise Agreements.
Franchise Agreement
The Franchise Agreement gives you the right to operate a CiCi's Pizza Restaurant or CiCi's To
Go Unit at a single location that you select and we approve ("Approved Location"). You must select
your location from within a geographic area that we call your Designated Area and that is described in
Attachment A to the Franchise Agreement. I f you are signing your Franchise Agreement under a
Development Agreement with us, the Designated Area will cortcspond to the Development Area
described in the Development Agreement. The Designated Area is not exclusive or protected for any
purpose, unless it corresponds to a Development Area. In that case, the protections for a Development
Area (described below) will apply.
Once you have selected a location and we have approved it,, we will insert the specific street
address of the Approved Location in Attachment "A". You must operate the Restaurant or Unit only at
your Approved Location. You cannot relocate the Restaurant or Unit unless we first give you our written
consent and you comply with our then-curtent site selection and constmction procedures.
If you comply with the Franchise Agreement and any other agreement you have with us or our
afflliates, then, (i) if the Franchise Agreement is for a CiCi's Pizza Restaurant, we and our affiliates will
not establish or authorize anyone except you to establish a CiCi's Pizza Restaurant in the Protected Area
during the term of the Franchise Agreement, or (ii) if the Franchise Agreement is for a CiCi's To Go
Unit, we and our afflliates will not establish or authorize anyone except you to establish a CiCi's To Go
Unit in the Protected Area during the term of the Franchise Agreement. The Protected Area is a
geographic area identified in Attachment A of the Franchise Agreement. The determination of the actual
size and shape of your Protected Area will be based on several factors, including population density,
income level and the number of households and businesses in the area, but the Protected Area will not
exceed one and one-half miles unless we determine, in our sole discretion, that a larger Protected Area is
wartanted. Ifyou are a Developer, your Protected Area will not extend beyond the boundaries of your
Development Area. You do not need to achieve any particular sales volume or market penetration in
order to maintain your rights in the Protected Area.
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Except for authorized catering services, you may not actively solicit or accept orders from
consumers outside of the Protected Area or Development Area. You must offer and sell all menu items,
products and services we require, using the manner of distribution we expressly authorize. (See Item 16)
We retain all other rights. Among other things, this means we can:
(i)
Establish and operate, and authorize others to establish and operate, CiCi's Pizza
Restaurants or CiCi's To Go Units at any location outside the Protected Area (including locations that
are adjacent or proximate to the Protected Area) and in any Reserved Area whether within or outside the
Protected Area. A "Reserved Area" is any enclosed area of retail sales establishments in excess of
250,000 square feet, food courts, airports, hospitals, cafeterias, commissaries, schools, hotels, office
buildings and stadiums, arenas, ballparks, festivals, fairs, military bases and other mass gathering
locations or events;
(ii)
Establish and operate, and authorize others to establish and operate, restaurants or other
food service establishments under other trade names, service marks and trademarks at any location within
or outside of the Protected Area; and
(iii)
Within and outside the Protected Area, offer and sell, and authorize others to offer and
sell, any similar or dissimilar products and services, under the Marks or under other names or marks,
through any channel or by any method of distribution other than a CiCi's Pizza Restaurant (if the
Franchise Agreement is for the development of CiCi's Pizza Restaurants) or CiCi's To Go Unit (if the
Franchise Agreement is for the development of CiCi's To Go Units), without compensafion to you. This
means, in part, that if your Franchise Agreement is for CiCi's Pizza Restaurants, we may establish, or
authorize others to establish, CiCi's To Go Units in the Protected Area. Similarly, if your Franchise
Agreement is for CiCi's To Go Units, we may establish, or authorize others to establish, CiCi's Pizza
Restaurants in-the Protected Area. Other channels of distribution also may include the Intemet or similar
electronic media, catalog sales, or direct marketing.
We may also offer and sell, and authorize others to offer and sell: (a) collateral products, like
pre-packaged food products, T-shirts and other CiCi's memorabilia, under the Marks at or from any
location or through any channel of distribution; (b) food and beverage services under the Marks at or
through any permanent, temporary or seasonal food service facility or through any channel of distribufion
except a CiCi's Pizza Restaurant (if the Franchise Agreement is for a CiCi's Pizza Restaurant) or CiCi's
To Go Units (if the Franchise Agreement is for a CiCi's To Go Unit) located within the Protected Area,
even if those facilifies provide the products and services offered by a CiCi's Pizza Restaurant or CiCi's
To Go Unit, as applicable; and (c) any products or services (including, without limitation, any food or
beverage services) under any other names and marks at any location or through any channel of
distribution.
You must advertise and promote the System within the Protected Area in accordance with your
local advertising obligations, i f any. You may use the Intemet to advertise only in compliance with the
Franchise Agreement, which requires you to use our website.
Development Agreement:
Under the Development Agreement, we grant you a Development Area. We determine the
Development Area before you sign the Development Agreement based on various market and economic
factors like market demographics, the penetration of CiCi's Pizza Restaurants and/or CiCi's To Go Units
and similar businesses in the market, the availability of appropriate sites and growth trends in the market.
There is no "typical" Development Area. However, the Development Area may be all or a portion of a
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city, a single or multi-county area, or some other geographic area, and will be described in Attachment D
to the Development Agreement before you sign it. The Development Area does not include any
Reserved Area (described below). The Development Agreement will contemplate the development of
either CiCi's Pizza Restaurants or CiCi's To Go Units, but not both. You must develop Restaurants or
Units, as applicable, in the Development Area under the Development Schedule in Section III. of the
Development Agreement. You and we agree to the Development Schedule before signing the
Development Agreement. Your development of CiCi's To Go Units will not satisfy any development
obligations that you have for CiCi's Pizza Restaurants and vice versa.
If you stop operating any Facility during the term of the Development Agreement, you must
develop a replacement Restaurant or Unit, as applicable, within a reasonable time (not to exceed 180
days) after you stop operating the original Facility. If you transfer your interest in a Facility during the
term of the Development Agreement, in compliance with the related Franchise Agreement for the
Facility, the transferred Facility will continue to be counted in determining whether you have complied
with the applicable Development Schedule, unless the transfertcd Facility is no longer operated as a
CiCi's Pizza Restaurant or CiCi's To Go Unit, as applicable. In that case, you must develop a
replacement Restaurant or Unit, as applicable, within a reasonable time (not to exceed 180 days) after the
transferred Facility ceases to be operated as a CiCi's Pizza Restaurant or CiCi's To Go Unit, as
applicable.
If you comply with the Development Agreement and any other agreements that you or your
afflliates have with us or our affiliates, then (i) if the Development Agreement is for the development of
CiCi's Pizza Restaurants, we and our affiliates will not establish, or authorize anyone except you to
establish, a CiCi's Pizza Restaurant in the Development Area during the term of the Development
Agreement and (ii) if the Development Agreement is for the development of CiCi's To Go Units, we and
our afflliates will not establish, or authorize anyone except you to establish, a CiCi's To Go Unit in the
Development Area during the term of the Development Agreement We retain all other rights. Among
other things, this means we can:
(i)
Establish and operate, and authorize others to establish and operate, CiCi's Pizza
Restaurants or CiCi's To Go Units at any location outside the Development Area (including locations
that are adjacent or proximate to the Development Area) and in any Reserved Area whether within or
outside the Development Area. A "Reserved Area" is any enclosed area of retail sales establishments in
excess of 250,000 square feet, food courts, airports, hospitals, cafeterias, commissaries, schools, hotels,
office buildings and stadiums, arenas, ballparks, festivals, fairs, military bases and other mass gathering
locafions or events;
(ii)
Establish and operate, and authorize others to establish and operate, restaurants or other
food service establishments under other trade names, service marks and trademarks at any location within
or outside of the Development Area; and
(iii)
Within and outside the Development Area, offer and sell, and authorize others to offer
and sell, any similar or dissimilar products and services, under the Marks or under other names or marks,
through any channel or by any method of distribution other than a CiCi's Pizza Restaurant (if the
Development Agreement is for the development of CiCi's Pizza Restaurants) or CiCi's To Go Unit (if
the Development Agreement is for the development of CiCi's To Go Units), without compensation to
you. This means, in part, that if your Development Agreement is for CiCi's Pizza Restaurants, we may
establish, or authorize others to establish, CiCi's To Go Units in the Development Area. Similarly, if
your Development Agreement is for CiCi's To Go Units, we may establish, or authorize others to
establish, CiCi's Pizza Restaurants in the Development Area. Other channels of distribution also may
include the Intemet or similar electronic media, catalog sales, or direct marketing.
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We may also offer and sell, and authorize others to offer and sell: (a) collateral products, like
pre-packaged food products, T-shirts and other CiCi's memorabilia, under the Marks at or from any
location or through any channel of distribution; (b) food and beverage services under the Marks at or
through any permanent, temporary or seasonal food service facility or through any channel of distribution
except a CiCi's Pizza Restaurant (if the Development Agreement is for the development of CiCi's Pizza
Restaurants) or CiCi's To Go Units (if the Development Agreement is for the development of CiCi's To
Go Units) located within the Development Area, even if those facilities provide the products and
services offered by a CiCi's Pizza Restaurant or CiCi's To Go Unit, as applicable; and (c) any products
or services (including, without limitation, any food or beverage services) under any other names and
marks at any location or through any channel of distribution.
If you fail to comply with the Development Schedule, or otherwise materially default under
the Development Agreement, then we may (in addition to our other remedies) terminate or modify
your territorial rights, including eliminating your territorial protections so that your Development
Agreement becomes non-exclusive, reduce the area of territorial rights, reduce the number of
Facilities that you may establish, or accelerate the Development Schedule. When the Development
Agreement expires or is terminated, you cannot develop additional Facilities in the Development
Area (but may complete development of and/or operate Facilities under then-existing Franchise
Agreements) and we may develop or authorize others to develop Facilities in the Development
Area and exercise all rights not expressly granted to you under your Franchise Agreements.
Upon termination or expiration of the Development Agreement, your only rights derive from any
then-existing Franchise Agreements, and you will have no rights remaining under the Development
Agreement. Your only territorial protection will be the Protected Areas in your Franchise Agreements.
Rights of First Refusal
Except for development rights, granted under a Development Agreement, we do not grant any
rights of first refusal to obtain additional CiCi's Pizza Restaurant or CiCi's To Go Unit locations. If you
wish to obtain an additional location, you must enter into a new Franchise Agreement for that location.
You cannot establish another CiCi's Pizza Restaurant or CiCi's To Go Unit unless you enter into a
separate Franchise Agreement for that Restaurant or Unit.
, ITEM 13
TRADEMARKS
The Development Agreement does not give you any rights to operate under the Marks. Under
the Franchise Agreement, we grant you a license to operate either a CiCi's Pizza Restaurant or a CiCi's
To Go Unit under the name "CiCi's" or "CiCi's To Go", as applicable, and to use any Marks we
authorize. Our Marks are used to designate CiCi's Pizza Restaurants and CiCi's To Go Units as a source
of restaurant services and to designate the source of numerous retail food products including, but not
limited to, pizzas, cinnamon rolls and brownies.
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The following Marks are registered with the U.S. Patent and Trademark Office ("USPTO"). We
have filed or intend to file at the times required by law all appropriate Affidavits (Sections 8 and 15) for
the Marks listed and renew each of the registrations.
U.S. TRADEMARK
REGISTRATION
NUMBER
REGISTER
REGISTRATION
ISSUE DATE
CiCi's
Principal
9/1/92
1,712,523
CiCi's
Principal
1/28/03
2,680,694
TOMATO Design
Principal
7/15/03
2,736,186
CICI'S TO GO Logo
Principal
6/12/07
3,251,151
CICI'S Logo (Tomato in
Circle)
Principal
9/18/07
3,293,786
CICrS NOW (with Arrow)
Principal
7/1/2008
3,457,868
ClCrS NOW
Principal
1/6/2009
3,457,090
CICI'S FLIPS
Principal
1/6/2009
3,558,785
SODA TOTE
Principal
3/24/2009
3,596,320
CICI'S BUFFET ON THE GO
Principal
12/22/2009
3,727,837
MARK
The service mark "CiCi's" is registered in the state of Texas under Registration Number 051349.
The date of that registration is October 25, 1991.
On November 17, 2004, the state of Florida granted our registration of the service mark "CiCi's
Pizza" in connection with restaurant services, under Registration Number T04000001455.
There is no presently effective determination of the U.S. Patent and Trademark Office, the
trademark trial and appeal board, the trademark administrator of any state or any court, nor any pending
infringement, opposition, or cancellation proceeding, nor any pending litigation involving the Marks
which is relevant to its ownership, use or licensing.
We know of no superior prior rights or infringing use that could materially affect your use of the
Marks. We know of no agreements currently in effect which significantly limit our rights to use or
license the use of the Marks in any manner material to the franchise.
We will indemnify you against all damages for which you are held liable in any proceeding
resulting from your use of any of the Marks, so long as your conduct and the conduct of your Controlling
Principals in the proceeding and in the use of the Marks is in full compliance with the terms of the
Franchise Agreement. Other than this, we are not obligated to protect your rights to use the Marks or to
protect you against claims of infringement or unfair competition.
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You must immediately notify us of any infringement of the Marks or of any challenge to the use
ofany ofthe Marks or claim by any person of any rights in any of the Marks. You and your Controlling
Principals must agree not to communicate with any person other than us and our counsel about any such
infringement, challenge or claim. We have sole discretion to take any action we deem appropriate and
the right to exclusively control any litigation, or Patent and Trademark Office (or other) proceeding,
arising out of any infringement, challenge or claim conceming any of the Marks. You must execute all
instmments and documents and give us any assistance that in our counsel's opinion may be necessary or
advisable to protect and maintain our interests in any such litigation or proceeding or to otherwise protect
and maintain our interest in the Marks.
You may not use any of the Marks as part of your corporate or other name. You must also
follow our instructions for identifying yourself as a franchisee and for filing and maintaining the requisite
trade name or fictitious name registrations. You must execute any documents we or our counsel
determine are necessary to obtain protection for the Marks or to maintain their continued validity and
enforceability. Neither you nor your Controlling Principals may take any action that would prejudice or
interfere with the validity of our rights in the Marks. You may not contest the validity of our interest in
the Marks or assist anyone else to do so.
Your license to use the Marks is non-exclusive, and we have the right, among others:
(1)
to grant other licenses for use of the Marks, in addition to licenses already
granted to existing franchisees;
(2)
to develop and establish other systems using the Marks or other names or marks,
and to grant licenses or franchises without giving you any rights; and
(3)
to engage, directly or indirectly, at wholesale, retail or otherwise, in (a) the
production, distribution, license and/or sale of products and services and (b) the use in connection with
such production, distribution, license, and sale, of the Marks and any and all trademarks, trade names,
service marks and other identifying characteristics that we may develop or use now or in the future.
We reserve the right to substitute different trade names, service marks, trademarks and indicia of
origin for the Marks if the Marks can no longer be used, or if we determine, in our sole discretion, that
the substitution will be beneficial to the System.
ITEM 14
PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION
We do not own any patents that are material to the franchise. We do claim copyright protection
and proprietary rights in the original materials used in the System, including our Manuals, recipes,
bulletins, cortcspondence and communications with our franchisees, training, advertising and
promotional materials, and other written materials relating to the operation of the Restaurant and Unit
and the System. You must treat these materials and other confidential or proprietary information used in
the System ("Proprietary/Confidential Information") confidentially.
You and your Controlling Principals must agree not to communicate or use our
Proprietary/Confidential Information or use our Marks for the benefit of anyone else during and after the
term ofthe Franchise Agreement. You and your Controlling Principals must also agree not to use our
Confidential Infonnation at all after the Franchise Agreement tenninates or expires. You and your
Controlling Principals can give this Confidential Information only to your employees who need it to
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operate the Restaurant. You must have your Operators, Managers and any of your other personnel who
have received or will have access to our Confidential Information, sign similar covenants. (See Item 15.)
Your Principals also must execute these covenants.
If you or your Controlling Principals develop any new concept, process or improvement in the
operation or promotion of a Restaurant or Unit, you must promptly notify us and give us all necessary
information about the new process or improvement, without compensation. You and your Controlling
Principals agree that any of these concepts, processes or improvements will become our property, and we
may use or disclose them to other franchisees, as we determine appropriate.
There is no presently effective determination of the U.S. Copyright Office (Library of Congress)
or any court affecting our copyrights. There is no cunently effective agreement that limits our right to
use and/or license our copyrights. The Franchise Agreement does not obligate us, or otherwise, to
protect any rights you have to use the copyrights. We have no actual knowledge of any infringements
that could materially affect the ownership, use or licensing of the copyrights.
ITEM IS
OBLIGATION TO PARTICIPATE IN THE ACTUAL
OPERATION OF THE LICENSED BUSINESS
Before we sign the Franchise Agreement or any Development Agreement, you must designate
one of your owners as your Managing Principal. Your Managing Principal is the owner who is primarily
responsible for the supervision of the franchised business. We must approve your Managing Principal
and he or she must meet our qualifications and other requirements. If you are an individual, you will be
the Managing Principal. I f you are not an individual, your Managing Principal must maintain a vested
ownership interest in you, which may not be encumbered or subjected to a voting agreement, proxy,
security interest or purchase right or option, unless permitted under the terms of the Agreement.
In addition to exercising general supervisory responsibility for the franchised business, your
Managing Principal will also serve as your Operator under the Franchise Agreement to oversee Facility
operations, unless you designate another person whom we approve to serve as your Operator. You must
appoint an Operator we approve no later than the date the Franchise Agreement is signed. I f vou
have signed a Development Agreement and have not appointed an approved Operator at least 60
davs before the scheduled Franchise Agreement execution date, then we mav require vou to use a
does not have to have an ownership interest in you. However, we must approve any Operator you appoint
and he or she must meet our qualifications and other requirements. I f your Operator is different from
your Managing Principal, your Managing Principal will remain ultimately responsible for the Operator's
performance.
If you are a Developer, your-Managing Principal must complete our-orientation-program-for
Developer managing principals. In addition, your Operator (who may or may not be the same person
as your Managing Principal) must successfully complete our management training program. You must
give your Managing Principal and any Operator sufficient decision-making authority to expedite the
determinations and decisions that are essential to the effective and efficient operation of your business.
Your Operator must devote his or her substantial full time and best efforts to the franchised business.
Neither your Managing Principal nor your Operator may engage in any business activity other than the
development and operation of Facilities under agreements with us, without first obtaining our written
consent.
DALO 1:11S60S4.91I94789.3
079684.0103
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Each Facility must have a General Manager and the number of Assistant Managers we require.
Your General Manager and Assistant Managers must satisfy our educational and business criteria and
must be acceptable to us. The General Manager and Assistant Managers are responsible for the daily
operafion and management of the Facility and must devote their fiill time and best efforts to the business.
They must also satisfy the training requirements in the Franchise Agreement General Managers and
Assistant Managers are not required to have an ownership interest in the franchise unless you own only
one franchised Facility, in which case your Managing Principal may serve as the Facility General
Manager. If someone other than your Managing Principal serves as the Facility's General Manager, your
Managing Principal remains ultimately responsible for the General Manager's performance.
If any of your management personnel cannot continue to serve, or no longer qualifies, you must
promptly notify us and designate and qualify a replacement within a reasonable period of time. Any
replacement must meet the applicable qualifications. Until a replacement is designated, approved and
trained, you must provide for an interim manager of the Facility. We must approve your interim manager
and he or she must conduct the operations of the Facility in compliance with the Franchise Agreement.
Your Controlling Principals, including your Managing Principal, agree to be individually bound
by certain obligations in the Franchise Agreement and any Development Agreement and to personally
guarantee your performance under the Agreements (including, in the case of a Developer the obligations
of the franchisee under each Franchise Agreement executed under the Development Agreement. (See
Item 1.)
Operators who do not have any ownership interest in the Franchisee or Developer are not
required to guarantee your performance under the Franchise Agreement or Development Agreement but
are required to sign Confldentiality and Non-Competition Agreements substantially in the form of
Attachment D to the Franchise Agreement and Attachment B to the Development Agreement. At our
request, your General Manager and Assistant Managers and any other personnel who will have access to
our training also must sign these Confidentiality and Non-competition Agreements. Those of your
Principals who are not signing the Guaranty as Controlling Principals also must execute these covenants.
We have the right, in our sole discretion, to decrease the period of time or geographic scope of the noncompetition covenants or eliminate the non-competition covenant altogether for any person who must
sign an agreement described in this paragraph. (See Item 17).
ITEM 16
RESTRICTIONS ON WHAT THE FRANCfflSEE MAY SELL
All products you use or sell at the Facility must conform to our standards and specifications.
(See Item 8.) These are described in our Manuals and other writings. You must not deviate from our
standards and specifications unless we first give you our written consent. You must also comply with ali
applicable laws and regulations and secure all appropriate govemmental approvals for the Facility.
You must offer and sell all menu items, products and services we require, using the manner and
style of distribution we expressly authorize in writing. Distribution methods for Restaurants curtently
include dine-in, catering, and carry-out, but not delivery. Distribution methods for Units curtently
include carry-out and catering, but not dine-in or delivery. The Franchise Agreement provides that any
change in distribution methods, including the addition of delivery as an approved distribution method,
must be expressly authorized by us in writing, in the Manuals or otherwise. We may terminate your
Franchise Agreement if you fail to comply with this provision. You also agree to comply with the terms
of any distribution program we authorize and to sign any documents we think are necessary to carry out
the program.- You must secure any new or additional equipment, fixtures, supplies, products and
DALO 1:1156051.91194789.3
079684.0103
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materials that we require for you to have in order to offer and sell new menu items or to provide the
Facility's services by altemative means.
You must sell only the menu items, products and services that we have expressly approved in
writing. You must stop selling any menu items, products or services and must cease any method of
distribution that we may disapprove in writing. There are no contractual limitations on our right to
approve or disapprove products or services offered by CiCi's Pizza Restaurants or CiCi's To Go Units.
You must prepare all menu items with our recipes, using the procedures for preparation contained in our
Manuals or other written instructions. You must not use or offer nonconforming items or differing
amounts of any items, unless we first give you our written consent. You must open and operate the
CiCi's To Go Unit and the buffet at CiCi's Pizza Restaurants, as applicable, during the hours we specify
in the Manual or otherwise in writing. Under our policies, you may only install at the Facility video
games meeting our specifications which are leased from and maintained by a third party vendor.
We may ask you to make other improvements to modernize the Facility premises, equipment,
signs, decor, fixtures, fumishings, and other items necessary to operate the Facility and conform them to
our cunent standards and specifications. I f we ask you to, you must make capital improvements or
modificafions to the Facility any time that a majority of the CiCi's Pizza Restaurants or CiCi's To Go
Units, as applicable, that we or our afflliates operate have made the improvements or modifications, or
are exerting their best efforts to make, or any time within 6 months after we give you written notice,
unless you have installed or replaced the item or items that required improvement or modification within
3 years before the date of the notice.
We may periodically give you recommendations or suggestions as to what we believe to be the
optimum selling price for the products and services you offer. Except for any maximum prices we may
establish, you are not bound to adhere to our recommended or suggested prices. We have reserved the
right to establish maximum prices for any given product or service nationwide or within an advertising
market as we determine. You may not exceed any maximum price we establish, but you are free at all
times to charge any price below the maximum price we establish.
You must maintain a competent, conscientious and trained staff to operate the Facility and must
to take the steps necessary to ensure that your employees preserve good customer relations, and comply
with our dress code. All advertising and promotional materials, signs, decorations, and paper goods that
you use in the Facility and on any Facility catering or delivery vehicles must bear our Marks in the form,
color, location and manner we specify. You must redeem all CiCi's gift cards.
We have developed certain products for use in the System that are prepared from highly
confidential recipes and that are our trade secrets. Because of the significance of these products in the
System, it is to our mutual benefit that we closely control the production and distribution of the products.
You must use our secret recipe products. You must purchase all of your requirements for these products
only from us or from a source we designate. (See Item 8.)
We may also make available to you and you may have to purchase from us for resale to your
customers certain merchandise, like pre-packaged food products and CiCi's memorabilia, in amounts
necessary to meet your customer demand.
We do not cunently permit delivery. If we later authorize delivery, any vehicle that you use to
deliver Facility products and services to customers must meet our standards. You must place the signs
and decor items we require on the vehicle and must keep the vehicle clean and in good working order.
You may not allow anyone to operate a motor vehicle used to provide services under the Franchise
Agreement who is under 18 or who does not have a valid driver's license under the laws of the state in
which you provide services. You must require that each of these individuals comply with all laws,
DALO 1 :llS<iOS1.9ll947ft?„}
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regulations and mles ofthe road and to use due care and caution in the operation and maintenance of the
motor vehicle. Except as stated above, we do not set any standards or exercise control over any motor
vehicle that you use.
You may not advertise, promote, post or list information relating to the Facility on the Intemet
(through the creation of a Website or otherwise). You must comply with our social media policy for
franchisees, and we may change our policy over time.
We do not impose any other restrictions in the Franchise Agreement or otherwise on the goods or
services that you may offer or on sell or the customers to whom you may offer or sell.
ITEM 17
RENEWAL, TERMINATION, TRANSFER
AND DISPUTE RESOLUTION
This table lists certain important provisions of the Franchise Agreement and related
agreements. You should read these provisions in the agreements attached to this disclosure
document.
Key:
FA = Franchise Agreement
WEA = Work Evaluation Agreement
FRANCfflSE RELATIONSHIP
This table lists certain important provisions ofthe Franchise Agreement. You should read
these provisions in the Franchise Agreement attached to this disclosure document.
Provision
a.
Length of the franchise
term
Section in franchise or
other agreement
FA - Section III.
WEA- Not applicable
b.
Renewal or extension of
the term
FA - Section III.
WEA- Not applicable
Summary
FA - 10 year initial term*''
WEA- Not applicable
FA - If you satisfy the required pre-conditions to
renewal, you may, at your option, renew your
rights under the Franchise Agreement for one (1)
additional 10-year renewal term.
WEA- Not applicable
c.
Requirements for
franchisee to renew or
extend
FA - Section III.B.
WEA- Not applicable
FA - Your renewal right permits you to remain as
a franchisee after the initial term of your
franchise agreement expires. However, to remain
a franchisee, you must meet all required
conditions to renewal including signing our thencurrent form offranchiseagreement, which may
be materially different than the form attached to
this disclosure document.
Other Conditions: Written notice; upgrade the
Facility to current standards; no default; pay all
money owed to us or our afflliates; have right to
DALO I :«560S4J>11242m
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Provision
Section in franchise or
^^^thei^^jeemen^^
Summary
remain in possession of the premises; pay
renewal fee; sign a general release; and comply
with our then-current qualification and training
requirements.
WEA- Not applicable
d.
Termination by franchisee
FA - Not applicable
WEA- Not applicable
FA - Not applicable
WEA- Not applicable
e.
Termination by franchisor
without cause
FA - Not Applicable
WEA- Not applicable
FA - Not Applicable
WEA- Not applicable
f.
Termination by franchisor
with "cause"
FA-Section XVILA. (1)
Sections III.l. and 2.
WEA- Not applicable
FA - We may terminate on your default.
FA - Sections VILA. (3)
and XVILB.
WEA- Not applicable
FA - Some defaults are non-curable. For other
defaults, you have the number of days to cure as
specified in the Franchise Agreement: 5 days for
failure by you or your affiliates to submit
required reports or pay monies; 7 days if you fail
to procure and maintain required insurance; 24
hours for misuse of the Marks; 24 hours for
failure to have a certified Manager on duty at all
g.
"Cause" defined - curable
defaults
WEA- Not applicable
your initial Operator fails to satisfactorily
complete initialiiiana^Tement training; 30 days
for certain other defaults. The above cure periods
are subject to otherwise applicable state law.
WEA- Not applicable
h.
"Cause" defined - noncurable defaults
DALO 1:1IS6054.91194789.3
079684.0103
FA-Sections XVILA. (2)
and (3)
WEA- Not applicable
- 57-
FA - Insolvency or bankruptcy of Franchisee or a
Guarantor; general assignment for benefit of
creditors; receivership; final judgment remains
outstanding for over 30 days; dissolution;
foreclosure proceedmg; execution of levy or sale
after levy; sell authorized products or services at
an unauthorized location; failure to acquire an
approved location within time required; fail to
constmct or remodel as and when required;
failure to open Restaurant when required;
abandonment or loss of right to the Restaurant
premises; conviction of certain crimes; threat to
public health or safety; failure to timely
proposeappoint a qualified replacement or
successor—Managing Principal of Qp^rator;
failure to have an Onerator successfully
rement training on or before
lening Date: unauthorized
transfer; failure to comply with the
Provision
Section in franchise or
^^othei^greemen^^
Summary
confldentiality and non-compefition covenants;
failure to transfer upon death or permanent
disability; false records or submission of false
reports; breach of any covenants or false
representations; faii to propose a qualified
replacement or successor General Manager or
Assistant Manager; or repeated defaults whether
or not cured. It is also a non-curable default if I
of your Controlling Principals violates certain of
the described provisions like those relating to
criminal convictions, transfer, and compliance
with covenants.
WEA- Not applicable
i.
Franchisee's obligations on
termination/non-renewal
FA - Section XVIII;
Investment Program
Amendment
WEA- Not applicable
FA - Stop operating the Restaurant and using the
Marks and System; de-idenfify the business;
remove signs; cancel assumed names; refrain
from using any imitations of the Marks in other
businesses; pay all amounts due; retum all
Manuals, software, and other proprietary
materials;
comply
with confidentiality
requirements; at our option sell to us at your cost
all of your advertising and sales promotion
materials bearing the Marks; and at our option,
sell or assign to us your rights in the Restaurant
premises and the equipment, telephone numbers,
fixtures and other assets used in the business, pay
liquidated damages. If you participate in the
Investment Program, we will receive a
liquidation preference on dissolution of the entity
that holds the franchise.
WEA- Not applicable
j.
Assignment of confract by
franchisor
FA - Section XIV.A.
WEA- Not applicable
FA - We may transfer our rights without
restriction.
WEA- Not applicable
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Provision
1.
Franchisor approval of
fransfer by franchisee
Section in franchise or
other agreement
FA-Section XIV.B.(l)
WEA- Not applicable
Summary
FA - We must consent and you must meet
conditions before fransferring.
WEA- Not applicable
m. Conditions for franchisor
approval of transfer
FA-Section XIV.B. (1);
Investment Program
Amendment
WEA- Not applicable
FA - Pay all amounts due our afflliates or us; not
be in default; execute a general release; remain
liable for pre-fransfer obligations; and pay a
transfer fee. Transferee must meet our criteria;
upgrade the Restaurant to then-current standards;
attend training; and execute a current Franchise
Agreement. If you participate in the Investment
Program, (i) your owners may not sell any
ownership interests in you unless our interests are
also sold, and (ii) following a sale of the business
all proceeds must be distributed in accordance
with our liquidation preference.
WEA- Not applicable
n.
Franchisor's right of first
refusal to acquire
franchisee's business
FA - Section XIV.D.
WEA- Not applicable
FA - On 30 days written notice, we have the
opfion to purchase an interest being fransferred
on the same terms and conditions offered by a
third party.
WEA- Not applicable
o.
Franchisor's option to
purchase franchisee's
business
FA - Sections XIV.D.,
XIV.E.,
Consent
to
Option, and Secfions
XVIII.J. and XVIII.K.
WEA- Not applicable
FA - We have the option to purchase, or to
designate a purchaser for, the interest of any
individual franchisee or the interest of any
Principal of a corporate, limited liability
company or partnership franchisee upon the
death or permanent disability of the individual
franchisee or the Managing Principal of the
corporate or partnership franchisee. Your
spouse (if you arc- an individual) or your
Principals and their-respective-spouses (ifyou
are a corporation,4imited4iability company orpartnership) must-sign-eonsent-to-tlie option
desc-fibed above.
WEA- Not applicable
p.
Death or disability of
franchisee
FA - Section XIV.E.
WEA- Not applicable
FA - If you or a Controlling Principal is a natural
person, on death or permanent disability,
disfributee must be approved by us, or interest
must be transferred to someone approved by us
within 12 months after death or 6 months after
notice of permanent disability.
Provision
Section in franchise or
^^thei^agreemen^^
Summary
WEA- Not applicable
Non-competition
covenants during the term
of the franchise
FA-Section X.C.(l)
WEA- Not applicable
FA - Except for Facilities you operate under
Franchise Agreements with us, you and your
Controlling Principals may not have an interest in
a similar business including a business-thatoffcrs or scllsthat derives more than fiftv
nercent mVt>^ of its revenue from selling
pizza (including fresh, frozen or unbaked pizza)end-other-Italian foods using the distribution
methods (including dine-in, carry-out or catering)
authorized by us or any business that functions as
a commissary supplying such a business.
WEA- Not applicable
Non-competition
covenants after the
franchise is terminated or
expires
FA - Secfion X.C. (2)
WEA- Not applicable
FA - For a period of 2 years you may not divert
any of your business or customers to a
competitor or have an interest in a similar
business including-a—business that offers or
sellsthat derives more than fiftv percent
f5Q%^ of its revenue from sellinP pizza
(including fresh, frozen or unbaked pizza)-aiidother—Italian—foods using the distribution
methods (including dme-in, carry-out or catering)
we authorize or any business that functions as a
commissary to such a business which is located
at the Approved Location of the Facility, or
within the Protected Area, or if the Franchise
Agreement is signed under a development
agreement, within the development territory, or
within a 2^X0. mile radius of the Approved
Location, the Protected Area, the development
temtory (if applicable), or any CiCi's brand food
service facility in existence or under
constmction.
WEA- Not applicable
Modificafion of the
agreement
FA - Sections X.A. (5)
and XIX.B.
WEA- Not applicable
FA - Except for changes we can make
unilaterally, changes must be made by mutual
agreement. You must comply with the Manuals
as amended.
WEA - Not applicable
t.
Integration/merger clause
DALO1:44560544H 194789.3
079684.0103
FA - Section XIX.B.
WEA- Not applicable
- 60-
FA: Only the terms of the Franchise Agreement
and other related written agreements are binding
(subject to applicable state law). No other
representations or promises will be enforceable.
We may not disclaim representations made in the
disclosure document.
Provision
Section in franchise or
other agreement
Summary
WEA- Not applicable
u.
Dispute resolution by
arbitration or mediation
FA - Sections XIX.G., H.
L, J. and K.
WEA- Not applicable
FA - Claims, confroversies or disputes arising out
of or relating to the Franchise Agreement must
be mediated, except for actions we bring for
monies owed, injunctive or other equitable relief,
or relief relating to real property. We have the
right to create a dispute resolution program. If
we do, you agree to comply with the program.
WEA- Not applicable
V. Choice of forum
FA - Section XIX.H.
WEA - Paragraph 4
FA & WEA - Subject to applicable state law,
mediation at our corporate headquarters, except
actions for monies owed, injunctive relief, or
relief related to real property, the Marks or
confidentiality information. Subject to applicable
state law venue for all proceedings arising out of
the Franchise Agreement is the state, county or
judicial district in Texas where our principal
place of business is located, unless otherwise
brought by us.
FA - In addition to the provisions noted in this
chart, the Franchise Agreement contains a
number of provisions that may affect your legal
rights, including a waiver of jury trial and waiver
of punitive or exemplary damages.
See
Franchise Agreement Section XIX.L. We
recommend that you carefully review all of these
provisions, and the entire contract with a lawyer.
w. Choice of law
FA - Section XIX.H.
WEA - Paragraph 4
FA & WEA - Texas law, except for Texas
conflict of law, or as otherwise required by
applicable state law.
Note:
(1)
Under our cunent policy, we may extend the term of the franchise to meet the
requirements o f a lender or landlord i f you take over a closed location or for certain transfers and
relocations.
FRANCHISE RELATIONSHIP
This table lists certain important provisions of the Development Agreement. You should
read these provisions in the Development Agreement attached to this disclosure document.
Provision
a.
Length of the franchise
DALOld
079684.0103
Section in franchise or
other agreement
Section IV.
- 61 -
Summary
Term continues until you have completed your
Provision
Section in franchise or
other agreement
term
Summary
development obligations in accordance with the
Development Schedule.
b.
Renewal or extension
of the term
Section III.B.
We may extend the term of the Development
Agreement to allow you to develop a
replacement Restaurant
c.
Requirements for
Developer to renew or
extend
Sections III.B. (2), and III.B.
(3).
If the extension is to permit you to develop a
replacement Restaurant you must develop the
replacement.
d.
Termination by
Developer
Not Applicable
Not Applicable
e.
Termination by
Franchisor without
cause
Termination by
Franchisor with "cause"
Not Applicable
Not Applicable
Sections VILA. - D.
Following certain defaults, we may terminate the
Agreement, or we may modify your territorial
rights, alter your Development Schedule, or
terminate or modify the Development Incentive
Program (if applicable), rather than tenminate the
Agreement.
"Cause" defmed curable defaults
Sections VIl.B. and VII. C.
An uncured default under any franchise
agreement (F.A.) or any other development
agreement is also a default under the
Development Agreement. Some defaults are
non-curable. You have the number of days to
cure a curable Franchise Agreement default as
specified in the Franchise Agreement: 5 days for
failure by you or your afflliates to submit
required reports or pay monies; 7 days if you fail
to procure and maintain required insurance; 24
hours for misuse of the Marks; 24 hours for
failure to have a certified Manager on duty at all
f.
g.
titnpc"
lllIlCo,
QQ
TTTf
fifiyy
UU y 3
if
n
vrtiii*
Ttrtti
ivT f i n f i o i n f r P>*>>*j^t*%rt 1
I V l U l l a V l l l g — i ^ l ' liltMrttlr-
fails to-satisfactorily complete-initial training;
30 days for certain other defaults. The above
cure periods are subject to otherwise applicable
state law.
h.
"Cause" defined - noncurable defaults
DALO 1:1
079684.0103
Sections VILA, and B.
- 62-
Includes: insolvency or bankruptcy of Developer
or a Guarantor; general assignment for benefit of
creditors; final judgment remains unsatisfied for
over 30 days; failure to comply with the
Development Schedule; conviction of certain
crimes; unauthorized transfer; failure to timely
designate an approved Operator or any-
Provision
Section in franchise or
other agreement
Summary
Manaf ing-Partner-serving -as-anvour Operator
fails to timely complete our management
training; Developer seeks to fransfer any
Franchise Agreement (and/or the related
Restaurant) before completing the Development
Schedule (but you and we may mutually agree to
a new Development Agreement for the remaining
locations).
i.
Developer's obligations
on termination/
non-renewal
Sections VII.D. and VILE
Stop developing Restaurants (or, on partial
termination of territorial or development rights,
continue to develop only in accordance with any
modified Development Schedule); comply with
all
applicable confidentiality and noncompetition covenants.
j.
Assignment of contract
by Franchisor
Section VIILA.
We may transfer our rights without restriction.
k.
"Transfer" by
Developer -defmed
Sections VIII.B. and C.
Except for estate planning purposes, you must
not transfer: any direct or indirect interest in you,
the Development Agreement; or the assets of the
business without our consent
1.
Franchisor approval of
transfer by Developer
Section VIII.B.(l)
We must consent and you must meet conditions
before transferring.
m. Conditions for
Franchisor approval of
transfer
Section VIII.B.(l);
Investment Program
Amendment
Pay all amounts due us and our affiliates; not be
in default; execute a general release; remain
liable for pre-fransfer obligations; pay a fransfer
fee; and if we require, demonsfrate substantial
performance of your development obligations.
Transferee must meet our criteria; assume posttransfer obligations; execute our then-standard
Agreement; and attend training.
n.
Franchisor's right of
first refusal to acquire
Developer's business
Section VIII.D.
Within 30 days after notice, we have the option
to purchase thefransferredinterest on the same
terms and conditions offered by a third party.
0.
Franchisor's option to
purchase franchisee's
business
Not applicable
Not applicable
p.
Death or disability of
Developer
Secfion VIII.E.
If you or a Confrolling Principal are a natural
person, on death or permanent disability,
disfributee must be approved by us, or interest
DALO 1 1156051.91194789?
079684.0103
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Provision
Section in franchise or
^^^^^thei^greemen^^
Summary
must be transferred to someone approved by us
within 12 months after death or 6 months after
notice of permanent disability.
q. Non-competition
covenants during the
term ofthe
Development
Agreement
Section IX.C.(l)
Except for Facilities you operate under Franchise
Agreements with us, you may not have an
interest in a similar business including—abusiness -that-offers or- sells-pizza]
(including fresh, frozen or
unbaked pizza)-and other Italian foods using
the distribution methods (including dine-in,
carry-out or catering) we authorize or any
business that functions as a commissary for such
a business in the U.S. or anywhere else we have
used, registered or sought to register the Marks
or where we operate or license others.
Non-competition
covenants after the
Development
Agreement is
terminated or expires
Section IX.C.(2)
For 2 years you may not divert any of your
business or customers to a competitor or have an
interest in any business that is, similar to the
franchised-busincss including a business that
offers-or • sells pizza;
(50%^ of its revenue from selli
(including fresh, frozen or unbaked pizza)-a«dothcr Italian foods using the distribution
methods (including dine-in, carry-out or catering)
we authorize or any business that funcfions as a
commissary for such a business at the Approved
Location of any Facility established under the
Development Agreement, within the Protected
Area of any such Facility, within the
Development Area, or within a 2Q}f) mile radius
of the Approved Location or Protected Area of
any Facility established under the Development
Agreement the Development Area or any CiCi's
brand food service facility in existence or under
construction.
s.
Modification of the
agreement
Sections IX.G. and XII.
Except for changes we can make unilaterally,
changes must be made by mutual agreement.
t.
Integration/merger
clause
Section XII.B.
Only the terms of the Agreement and other
related written agreements are binding (subject to
applicable state law). No other representations or
promises will be enforceable.
u.
Dispute resolution by
arbifration or mediation
Sections XII.G., H., I., J., K.,
L. and M.
Claims, confroversies or disputes arising out of
or relatioj^ to the Development Agreement must
DALO 1 :J4S60S4,91194789.3
079684.0103
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Provision
Section in franchise or
^^thei^greemeirt^^
Summary
be mediated, except for actions we bring for
monies owed, injunctive or other equitable relief,
or relief relating to real property.
V.
Choice of forum
Section XII.H.
Subject to applicable state law, mediation at our
corporate headquarters, except actions for
monies owed, injunctive relief, or relief related to
real property, the Marks or confldentiality
information. Venue for all proceedings arising
out of the Development Agreement is the state,
county or judicial district in Texas where our
principal place of business is located, unless
otherwise brought by us.
In addition to the provisions noted in this chart,
the Development Agreement contains a number
of provisions that may affect your legal rights,
including a waiver of jury trial and waiver of
punitive or exemplary damages.
See
Development Agreement Section XII.L. We
recommend that you carefully review all of these
provisions, and the entire confract with a lawyer.
w. Choice of law
Section XII.H.
Texas law, except for Texas conflict of law, or as
otherwise required by applicable state law.
A provision in the Franchise Agreement or Development Agreement which states that the
agreement terminates upon your bankruptcy may not be enforceable under Title 11, USC Section 101.
APPLICABLE STATE L A W M A Y REQUIRE ADDITIONAL DISCLOSURES RELATED TO
THE INFORMATION I N THIS DISCLOSURE DOCUMENT. THESE ADDITIONAL DISCLOSURES,
IF A N Y , APPEAR I N A N ADDENDUM. CALIFORNIA RESIDENTS, SEE THE CALIFORNIA
ADDENDUM TO THIS DISCLOSURE DOCUMENT FOR ADDITIONAL DISCLOSURES
REQUIRED BY CALIFORNIA LAW.
I T E M 18
PUBLIC FIGURES
We do not use any public figures to promote the franchise.
DALOLHSW
079684.0103
'"94789.3
- 65-
I T E M 19
F I N A N C I A L PERFORMANCE REPRESENTATIONS
The FTC's Franchise Rule permits a franchisor to provide information about the actual or
potential financial performance of its franchised and/or franchisor-owned outlets, i f there is a reasonable
basis for the information, and the information is included in the disclosure document Financial
performance information that differs from that included in Item 19 may be given only i f ( I ) a franchisor
provides the actual records o f an existing outlet you are considering buying; or (2) a franchisor
supplements the information provided in this Item 19, for example, by providing information about
performance at a particular location or under particular circumstances.
CICI'S P I Z Z A RESTAURANTS
I.
ANALYSIS OF AVERAGE SALES AND CERTAIN AVERAGE COSTS AND EXPENSES
FOR COMPANY-OWNED CICI'S P I Z Z A RESTAURANTS
Part I of this Financial Performance Representation analyzes average sales and certain average
costs and expenses for company-owned CiCi's Pizza Restaurants. To Go Units are not included.
BASES AND ASSUMPTIONS
The analysis was based on the operating results of the 6 company-owned CiCi's Pizza
Restaurants in the Dallas/Ft. Worth, Texas ("DEW") market that were open and operating for at least 18
months before December 26. 2010.25. 2011. and in operation during the entire period of our fiscal year
ended December 26.^0^025. 2011 ("Sample Restaurants")'.
These are all o f the company-owned Restaurants in the DFW market. These Restaurants offer
substantially the same products and services that your Restaurant will offer. Each of the Sample
Restaurants used a uniform accounting system, and the data was prepared on a basis consistent with
generally accepted accounting principles during the applicable period. Th^ San^plp Restaurants in the
Hiph categorv averaged 19.6 vears in operation. The information has not been audited.
The Sample Restaurants were divided into 3 categories starting with the highest sales
volume and ending with-the-lowest. The High category represents-annual-gross-sales in exeess-of$1,000,000; the Medium category represents annual gross sales ranging bct^vccn $700,000 nnd
$1,000)000; and the Low category represents annual gross sales bolow $700,000. The Sample
Restaurants in the High category averaged 21.3 years in operation and the Sample Restaurants in
the Medium category averaged 13.1 years in operation. None of the Sample Restaurants were in
the Low-category.
[TABLES 1 AND 2 APPEAR O N T H E F O L L O W I N G PAGE]
' Wc presently intend to discontinue There is one companv-owned operations in the Orlando. Florida
ond-Las Vegas, Nevada markets. Our-CMt-fr-om-these-markets will allow-us-to consolidate our-eom
pany owned operations at our corporate base in the D F W market and open the Florida and
Nevada markets to further franchise expansion. Accordingly, data for those company owned
Restaurants arc presented scparatelvrestaurant in Florida. This Restaurant Is located outside the DFW
id to sell it. Accordingiv. it is excluded from the sample restaurant information in the
itanrant had sales nfS;782.2m
DALOl J
079684.0103
- 66-
TABLE 1
Average sales for Sample Restaurants-^
Fiscal Year SOlO^Mi (unaudited)
MemuM
I'^-i •••
' NO. OF Rl-STAURANTS
RANGE (IN SALES):
4
06
". ' • ^' ,
HIGH
LOW
AVERAGE:
..^ y ;
' -S1i340i258
\ $1,098,294
.$4^10,-«62
.
1
- -S959»S1^ S942r344S950,939 •- \
NMrS1.3S4.085
N/A,S1f0fl6^37
NM.SL149.795
High catcgor)'! 2 (50%) attained or exceeded average sales; Medium category; 1 (501
Restaurants f33%1 attained or exceeded average sales.
DALOl :HS60S4J>ii2£Zm
079684.0103
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TABLE 2
Average sales, costs, and expenses for the Sample Restaurants
Fiscal Year 204«2fiil (unaudited)*')
,~S! . i .
7 t j i T t _ ' ^ j:Fy
1
AVERAGE SALES* W
100"'
w
xi.j.in.R.
i'-N/A
AVERAGE COSTS AND
EXPENSES
^^-•is.- .a/.,-.
Food and Paper'-'*
''yi
•7%
'"•'•wy:--
S217.99; '148r'',
Team Labor^^'
no/.':'
'¥"98t'i.:
4%'
•SM5j8,
• 30 .
:S123,79
Management*''
Taxes and Benefits**'
11 . ^ 1 '
9.3
%
Advertising*^'
^(S31>361
'-as:' "V '*
($339)86
l/fl
WA$208.108
^N/A
CONTROLLABLE PROFIT*""
Occupancy*"'
WA£4L22a
9.4
'
NM.$ 112.241
8
S38;5ii
WA'-
448
N/A$7SS»62S
N/ASIO8.777
' s:?-7:finn
Videos/Other Income*^'
- I
m i
^5
i4i
-•••a- r
$4M96
Operating Expenses*'''
RESTAURANT EBITDA**'^'
N/ASMLm
3. / o J
$8445^0
GROSS MARGIN
NM.$1.149.79S
($13^12
WA$28ai9
L4
24.
: 99.
9%
.$W2i8^
WAS309.603
N/A
;$246t76 ^: • 20;
.4%
44.
• 33 ' ^-^ 4 %
WA$215d25
High-category! 2
1
2 Restaurants (33%^ attained or exceeded average sales, and 3 Restaurants (50%) attained
or exceeded average sales, and 2 (50%) attained or exceeded average Restaurant EBITDA; Medium
category! 1 (50%) attained or exceeded average sales, and 1 (50%) attained or exceeded average
Restaurant EBITDA.
[Notes to Table 2 begin
lowing page]
h Average sales^ costs, and expenses for the Las Vegas/Orlando Markets appear on the following
Notes to Table 2
(1)
Methodology. The arithmetic mean average of gross sales for each of the 3 categories was
calculated along with the mean average costs and expenses. The average costs were then compared to
the average sales and expressed as a percentage of the sales figure. Our fiscal year is based on 52 or 53
weeks, rather than the full calendar year, and ends on the last Sunday of the calendar year. The year
2ai«2flll ended on December 26r4ft4«25. 2011 and was a 52-week year.
DALO 1 :llS60S4.911947«9.:t
079684.0103
- 68-
(2)
Average Sales. The sales figures set forth above represent all food and beverage sales for
on-premises and carry-out consumption.
Las Vegns/OrlaiHio Mnrkets: Table 1 Average Sales for fiseftl Year 2010 funBudited^
HIGH
'
'
LOW
'
'
M>-OK-RW51 AbRAN4*
RANGE (IN-SALESH
iiir.:jj
51,085.971.
\
- $817,651
LOW
V1ML
$615,917
1W
;*l,085i9^
Mtdium categoryi 1 (33%) allamed or exceeded average sales; Low-category:-l-(50%)-altainetl-Qr-eKceeded-average sales.The-Reslaur-ftnl-in the High category has been open for-2-yeftrSj-the-R<sttturants in the Medium category averaged 5.4 years
in-eperation, and-the-Restauranls-in the Low category averaged 4;l-years in operation.- Each of-these Restaurants-used arinftiiTF-fh11
rinlifHhl<*• m*niUi- I ni^-infflg'rnflfififi I m ^ nfti" •ipi*n-timiii"pn
IIIGIMI^
•AVKRAGLSALf^'**
•C • .
r.nw-J5i
MEDIl'M
""inn ftPA
V5L085.971 ,
'•
^t
-
^ inn
" ---i... • •
AVfeRAGlO C 0 S 1 ^ T 4 N 1 » - ., •
EXPENSES
f ^
i
$331,017
39.6^1'^
-
uru*f v4 ' M R
:G«OS.STAIARGIN .
i' nt4iim-l
'41 lid 11'^'^
'
" '
.
' ^\
• MaHagemeftt^
'' '
• ..• a'
" ^
•
i y
-l-ftx«s-aiMl-Benefits***-
:
> , .
• OpeFBtingTExnenses*''' ,-' .
AdvwttstefiW^
*' ^
S761)9S1
• 70.1%
69 1%
$315,972
f • 19.9% ' '
I9J1%
.
1
" SS7.951
-Videos/Olher-Iiiconie'**
CON IROL LAW^E-PROfjT*"^
t i l ^71
t l lS 4^7 '"
•43.8%_^ ' • ' h i , 1 2 1 r-
fi.TPyl'' J
• 47-1.
rO
($104031
-3.7-%
-> $293J9i
' 39i6%
UA%
1 A I -. 1 ^
-
'
19 5%'
• '-ir,,
14 4%"
i-'-' 'tl*l.i111 '••*." " 6.3%
$40,808
- ' 8 6% "
S93t891
"-nr. "••
^
• •'5i2i;38i :
/
$11L378 -> "l0i2% •-
•
' 30.2% '
»_
t - : • •
i i;4%
' 14:6%
• 1.5% •"
$27^931 ^< , • 3.7% -'
($A*65> ,
^, 7 no/„
$135,575
"16.7%
\
r
.
($7,117)
.'i/' • •
J 2%
'
^,
• $144,078
'I-, -
- fSiHi.n06t
RESTAURANT-EBITDA*W
.$172^018 ' 1SJ8%
-&6%
Medtum-cBtegoryi-i-(33%)-attained-or exceeded average-sales-and 2 (67%) attained or exceeded average Restaurant
FRITH A
Low categoryi 1 (50%)-attained or exceeded-average sales, and 1 (50%) attained-or exceeded average Restaurant EBITDA.|Notes to the preceding-Table 2 appear-above and on-the following-page}
DALOl :44560S4^ii242S2^
079684.0103
- 69-
(3)
Gross Margin. Gross margin is average sales less the cost of sales which inciudes beverage cost,
food cost, and cost of paper products. We or JMC negotiate contracts for quantity and price for both
beverages and certain food products to take advantage of volume discounts. We purchase a substantial
portion of our food products from JMC. This supplier is generally available to franchisees. However,
certain items must be purchased locally, like fresh produce. The price of the products you purchase from
JMC or other suppliers may vary according to the location of the Restaurant, delivery costs, the amount
of mark-up imposed, and other factors, all of which may differ from our historical experience.
(4) Team Labor. Hourly wages (including vacation) for food preparation and service employees. The
amount of hourly labor necessary to operate a CiCi's Pizza Restaurant will vary from Restaurant to
Restaurant, but should vary consistently with the sales volume ofthe Restaurant. Hourly wages may vary
significantly by geographic location, the supply of and demand on the local labor pool, state and federally
mandated minimum wage laws.
(5) Management. Management costs include payroll expenses for 2 to 3 restaurant managers and
quarterly bonuses for meeting performance objectives. The number of managers will vary based on sales
volume and your requirements may differ from those of a Company-owned Restaurant. We typically
require a franchisee (or its Operator) with a single franchised Restaurant to initially operate the
Restaurant as General Manager with 1 or 2 Assistant Managers.
(6) Taxes and Benefits. Unemployment taxes, FICA, employee injury insurance or workers
compensation where required, and the paid portion of group health benefits and retirement benefits for
managers are included in this category. Through economies of scale we may be able to obtain and/or
provide those benefits at a cost less than that available to you. Further, benefit costs may vary
substantially depending on the geographic location of the Restaurant and the level of benefits (i.e.,
medical insurance, retirement plans, vacation and non-management bonuses) provided by you.
(7) Operating Expenses. Operating expenses include the cost of utilities, repair, maintenance,
smallwares (including dishware, utensils, pans and glasses), laundry and cleaning services and
dishwasher supplies. Utilities include electricity, gas, water and telephone costs for the operation of the
Restaurant. The pro rata share of common area utility costs are included under rent and lease payments.
These costs are subject to local market conditions and may vary depending on the geographic location of
the Restaurant.
(8)
Advertising. The advertising spending level of Company-owned Restaurants is equivalent to a
franchisee's per-month contribution for marketing the CiCi's brand.
(9)
Videos/Other Income. This figure represents the company's portion of the revenue eamed from
video games, rack machines ($0.25 for stickers, toys, etc.) and other amusement equipment. We do not
own any of this equipment and provide space in retum for a percentage of the income.
(10)
Controllable Profit. This is the net profit which is controlled by restaurant management.
(11)
Occupancy. Occupancy costs include rent and lease costs, common area maintenance expenses,
tax and insurance due the landlord, our property and casualty insurance and property taxes. Rent and
lease costs include the base rent and percentage rent. Common area maintenance costs typically include
franchisee's pro rata charges for parking lot maintenance, lighting, real estate taxes, tenant improvement
allowance credits, taxes on the common areas and costs of maintaining the common areas. Rental costs
will vary as a result of space requirements and local market conditions. Other occupancy costs include
personal property taxes, other real estate taxes not included in rent and lease and other operating licenses
required by state and local agencies. You should investigate property taxes in the area in which you plan
to locate a CiCi's Pizza Restaurant.
DALO 1:11S60S1.91194789.3
079684.0103
- 70 -
(12)
Restaurant EBITDA. Restaurant EBITDA is eamings before interest, taxes, depreciation and
amortization.
Sales realized and costs and expenses incurred will vary from Restaurant to Restaurant. The
sales, costs and expenses of your Restaurant will be directly affected by many factors, such as the
Restaurant's size, geographic location, and competition in the marketplace; the presence of other CiCi's
Pizza Restaurants; the quality of management and service at the Restaurant; contractual relationships
with lessors and vendors; the extent to which you finance the construction and operation of the
Restaurant; your legal, accounting, real estate and other professional fees; federal, state and local income,
gross profits or other taxes; discretionary expenditures; accounting methods used and certain benefits and
economies of scale that we may derive as a result of operating Restaurants on a consolidated basis.
Part I does not include any estimates of the federal income tax that would be ,payable on the net
income from a Restaurant or state or local net income or gross profits taxes that may be applicable to the
particular jurisdiction in which a Restaurant is located. Each franchisee should consult with its tax
adviser regarding the impact that federal, state and local taxes will have on the amounts shown.
Certain fees which you must pay to us under the Franchise Agreement (see Items 5 and 6) and
other differences between the expenses of a franchised Restaurant and a company-owned Restaurant are
not reflected in the table. These include initial franchise fees, ongoing royalties and any interest expense
you would incur if you finance any of the initial investment for the Restaurant. You should, therefore,
use this information only as a reference to conduct your own analysis.
This analysis is based on certain historical data of the Sample Restaurants and should not be
considered to be a projection of the actual or potential sales, costs, income or profits that you will realize.
The individual financial results of any franchised Restaurant are likely to differ from the information
described above, and your success will depend largely on your ability.
n,
SYSTEMWIDE GROSS SALES
Part I I of this Financial Performance Representation analyzes average system-wide Restaurant
sales. To Go Units are not included.
BASES AND ASSUMPTIONS
The sales numbers reported below are based on the reported sales of the §§^540 company-owned
and franchised CiCi's Pizza Restaurants open and operating for at least 18 months before December 26^204^25. 2011 and in operation during the entire period of our fiscal year ended December 26, 2010.25.
2011. Of the SSS540 Restaurants, 544530 are franchised and 4^10 are Company-owned.
We compiled these figures from the individual Restaurants' actual reported gross sales. We have
not audited or otherwise verified the information. The franchised Restaurants are substantially similar to
the company-owned Restaurants.
The average gross sales of the ^^540 CiCi's Pizza Restaurants for the fiscal year ended
December 26^-201025. 2011 was $9Qfe66?.895.408. The highest sales level of any of the 5 5 ^ ^
Restaurants was $2310^34.2.205,372. and the lowest was £421.774.376.618.
[CONTINUED ON THE FOLLOWING PAGE]
DALO 1:11S6051.91194789.3
079684.0103
- 71 -
The 55^540 Restaurants were divided into 3 categories, starting with the highest sales volume
and ending with the lowest. The High category represents annual gross sales in excess of $1,000,000; the
Medium category represents annual gross sales ranging between $700,000 and $1,000,000; and the Low
category represents annual gross sales below $700,000. The ranges of sales and averages within the High,
Medium, and Low categories are listed below:
DALOl :«56054.91194789.3
079684.0103
- 72 -
VOLUME
HIGH
NO. OF UNITS
m^(29%)
MEDIUM
LOW
•yon
4^
m
(51%)
OVERALL AVG.
f4«%)f20%)
540
(100%)
S699.730S699.992
-
$4a4^mS376.618
-
RANGE (IN SALES)
HIGH
S2.310.221S2.205
S99fc??5S999.84
J32
1
LOW
S1.000.879S 1.002
.060
SgOO.^S700.27
1
AVERAGE*
$1.197.553SL197
S835^t«6S836.65
S906.667S895.408
3QX
of the Restaurants in the High category: 65 (38%) attained or exceeded ffjgh
.average sales; 133 (48%^ of the Restaurants in the Medium category: 133 (47%) attained or
exceeded Medium categorv average sales; Low catcgor}^ 59 (58%) nf the Restaurants in the Low
.attained or exceeded Low categorv average sales: 238 f43%^ of total Restaurants included
average sales.
Data from these Restaurants should not be considered as predictive of the average or probable
sales that should or would be realized by you. We do not represent that you can expect to attain similar
results.
Sales of your Restaurant will be directly affected by a number of factors, like the brand
recognition of CiCi's Pizza Restaurants in the market, competition in the market, the quality of
management and service at the Restaurant, your pricing decisions and other factors.
Some Restaurants have sold this amount. Your individual results may differ. There is no
assurance that you'll sell as much.
We have written substantiation in our possession to support the information appearing in this
Item 19 and such substantiation will be made available to you on reasonable request.
Other than the preceding financial performance representation, CiCi Enterprises, LP does not
make any financial performance representations. We also do not authorize our employees or
representatives to make any such representations either orally or in writing. I f you are purchasing an
existing outlet, however, we may provide you with the actual records of that outlet. If you receive any
other financial performance information or projections of your future income, you should report it to the
franchisor's management by contacting Lori Bolin, 1080 W. Bethel Road, Coppell, Texas 75019, (972)
745-4200, the Federal Trade Commission, and the appropriate state regulatory agencies.
DALO 1:11S6054.9I194789.3
079684.0103
- 73 -
ITEM 20
OUTLETS AND FRANCfflSEE INFORMATION
Table 1
System-wide Outlet Summary
(CICrS PIZZA RESTAURANTS & CICPS TO GO UNITS)
For years 2008-20102009-2011 (Note 1)
Column 1
Column 2
Column 3
Column 4
Column 5
Outlet Type
Year
Outlets at the
Start of the Year
Outlets at the
End ofthe Year
Net Change
(Note 1)
:^Kranchised
%
' €>^
xrwo
-^^^ ^
^ -•
WM- '6^^:'^yfy^•
5
:Gii$i'sy_ipa';^
y?^' y"
yi'^
$^MyV!?:::-:(§^
'•'RStaiirahts*^^; ""^^
611
598
Franchised
2009
CiCi's Pizza
572
2010
598
Restaurants(Notc 2)
r20082fill:;^:^^
-••5-^ft^-'J.^-^:.
i^yi^:^:'%^'^^'HZ4yy^
10
11
Franchised
2009
CiCi's To Go
11
9
2010
Units
Company Owned
CiCi's Pizza
Restaurants
-13
-26
y-
-.M3:<^yyyy^;.
+1
-2
2m \
Q
30082009
241S
4815
-3
20092010
4815
4512
-3'
20402Mi ,
Company Owned
CiCi's To Go
Units
••v'''^ t'^;- i^i3^':
'
t
J O
42M
'
2OQ82009
2
20092010
1
'
*
21
0=1
I
-ifl
1
0
"1
:Total:Oullels^'- ''- 2008.
^ . .
..
Total Outlets
2009
2010
''
, '^A;^ 644 v
1 •
641
625 ,
-16
625
594
-31
2QII
-
522- ' /
Notes:
DAL01:4456(
079684.0103
;
- 74-
s
^^
(1)
All numbers are as of fiscal year end for the referenced years, as applicable.
(2)
In the future, wc may own interests in certain Franchised CiCi's Pizza Restaurants under
the Investment Program. (Sec Items 1 and 10.)
Table No. 2A
Transfers of Outlets from Franchisees to New Owners (other than the Franchisor)
(CICI'S PIZZA RESTAURANTS)
For years 2008 .20102009-2011 (Note 1)
Column 1
State
~M\ah?LmaS^m'^ry^:^J\yyyiMf^
Alabama
Column 2
Column 3
Year
Number of Transfers
,2008#"'l'ii::-.':1' 'f^^t^iM^t^^'^
2009
2010
0
2
20il
Arkansas
Florida>
' •
Florida
Georgia
Indiana
01
200820112
20092fllfl
2040
^ '200 S "
- \ 200920J1
2O4O2005'
^ ^^
^ y
^ = •
A
20082009
20092010
^20402041
20082002
2010
m^'mymm
Maryland
^- .
20082009
...'••;•>..•,! •.-.".i.
.•.••••••.1.
DAL01:11S6Q54.9J
079684.0103
- 75-
0
4
.'
-i«
- ft^ ' 0
. - '-^ ^ - 0^ ^
1
'-^
.. ••'
'
v
0
0
'2010
2009201 f • '
2040
" '
- '-^
:
0^1
-2011
2010
•:2008
' V
120092011
'?nin
•-"
20082002
. 0^'
•-
4ft'.^L.;0
' ^
, ^ y ^.
Kansas
irtW.T
^•
3ft
7.t\XSi •
Kentucky
'^
0^
- . 'V.
" ' '
^
Column 1
Column 2
Column 3
State
Year
Number of Transfers
20082009
0
2009: -::MMmM^wmm^
2010
20082ftU
'
; ' >• .•
2009
• -
Missouri
Nebraska
New Mexico
North Carolina
Ohio
''< i n t l i
••
•• i v' ;;";'-' •
20082002
20092010
'20iOiiQli - ^^
'
'
^.
20082002
20092010
20402011 • ^ ' . .
20082009
2000^010
20402011 '
20082009
2010
^20092011
204:0
20082009
-2009 y y-H-'' • ' v ^ l ? 2010
'2008
' ^'r"^^'.'
s'- '
2009^0,11 '
2040 "
."'til-^ - ^
20082002
20092010
•^011
V .
^ ^--^-i ^
2002
'-^
2010
'20082011
20^
^ '
• V
-7010
»
20082002
20^2010
^20402011
2
10
00
-
4fl
0
Oi
0
01
'4fl
01
4fl
0
"1^ 0•-
.
4r
•' \
. -
4fl
^) • ^ • -
OUlahonmJ'.^.;
'
South Carolina
Tennessee ~
i \ . '
^.
-
: 'y, ;
Texas
Virginia
.
^
., |J -
7
. "0
0
02
ft*
2
'0'
.
.
/
25
^
'
TOTAL
DAL01:H56t
079684.0103
' . '
3 ' .2^ -
20082002
:^2010
^
J
"
.
rO'^V.^-.
f20092011 ' " r
^-2040
^dt^4,'-' ^
" . J ' "2*^-,
20082009
0
20092010
02
i204C^lJ
3fl^^^
201ft
20082002
. 2o^.^!i5iSdS sSj.-'.yj^'t','- • -TAC' ^-.y. -sr^^^io,
2010
79
"'94789.3
- 76-
% .V-^
-
•.
40
(Notc2)10
5ft
^^^-^-^
West Virginia
^
- <^
-^^ ^.^.^'r .
.-^'^ "
Column 1
Column 2
Column 3
State
Year
Number of Transfers
Notes:
(1)
All numbers are as of fiscal year end for the referenced years, as applicable.
(2)
One of our largest Franchisees filed bankruptcy in 2009, which then resulted in the sale of 40
CiCi's restaurants in Texas to a well qualified and highly experienced new Franchisee.
Table No. 2B
Transfers of Outlets from Franchisees to New Owners
(CICI'S TO GO UNITS)
For years 2008 20102009-2011 (Note 1)
Column 1
Column 2
Column 3
Year
Number of Transfers
0
01
' -JO
0
01
^
4-2-=
0
State
GA
20082009
2009^910
?"fi§»^:204^2ftU 2008^00^
20092^10
TX
ill^^^^^rai^ii
TOTAL
-
.
y . 1
20082009
>
t
02
20092010
' 20l^20U
^
•
2
Notes:
(1)
All numbers are as of fiscal year end for the referenced years, as applicable.
Table 3A
Status of Franchised Outlets
(CICI'S PIZZA RESTAURANTS)
For years 2008 20102009-2011 (Note 1)
Col. 1
Col. 2
Col. 3
Col. 4
Col. 5
CoL6
CoL7
CoL8
CoL9
State
Year
Outlets
at Start
of Year
Outlets
Opened
Terminations
NonRenewals
Reacquired
by
Franchisor
Outlets at
End ofthe
Year
AL
20082009
20092fllfl
20402flll
4912
0
0
0
2fl
0
0
0
0
0
0
Ceased
OperationsOther
Reasons
0
0
17
17
DALO 1:115605i.91194789.3
079684.0103
0
0
- 77-
01
17
17
47^1^
CoLl
CoL2
Col. 3
Col. 4
Col. 5
CoL6
CoL7
CoL8
CoL9
State
Year
Outlets
at Start
of Year
Outlets
Opened
Terminations
NonRenewals
Reacquired
by
Franchisor
Outlets at
End ofthe
Year
AZ
20082flfi2
20092filfl
20402011
20082flfl2
20092fllfl
20402flli
20082009
20092010
20402flll
20082flfl2
20092fllfl
20402011
20082009
20092flifl
20402flil
20082flfl2
20092fiifl
20402flll
30082009
30092fllfl
20402011
20082009
20092010
20402011
20082009
20092010
20402011
20082009
20092010
20402flll
20082009
20092010
20402flll
20082009
20092010
20402011
20082009
20092010
20402011
3
^1
4fl
OZ
2fl
0
01
I
i2
H
ifl
0
01
1
12
3fi
0
0
0
0
4fi
01
4fl
0
0
0
0
0
0
0
0
0
01
4fl
0
Ifl
01
ifl
0
0
0
0
02
2fl
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Ceased
OperationsOther
Reasons
0
0
01
0
0
0
0
0
0
0
0
02
0
0
0
0
0
02
0
0
AR
CA
CO
DE
FL
GA
IL
IN
IA
KS
KY
LA
MD
20082flfl2
3
H
m
OS
0
01
i2
62
9Ui
402
0
01
I
54M
66£Z
3221
3i22
3224
64
42
3fi
4614
4412
m4
42
3
10
10
10
10
10
402
15
4514
14
7
DALO 1:1156051.91194789.3
079684,0103
Ifl
454
42
2
2
2fl
0
I
01
Ifi
01
0
0
0
2fl
0
0
0
0
0
0
01
4fl
0
^fi
0
0
0
0
0
0
01
Ifl
0
01
4fl
^2
2S
8fl
n
^2
2fi
0
2
2
2fl
01
4fl
0
3fl
0
0
0
01
4fi
01
1
4fl
0
- 78-
02
0
0
0
0
0
0
0
0
0
0
0
01
0
0
01
0
0
01
0
3
34
41
?2
m
8
01
i2
91fl
40£
91
01
I
I
6m
645^
3432
3224
2421
42
3^
6
4412
910
41
3
3
10
10
402
10
402
9S
4514
14
4411
7
Col. 1
Col 2
Col. 3
Col 4
Col. 5
CoL6
CoL7
CoL8
Col, 9
State
Year
Outlets
at Start
of Year
Outlets
Opened
Terminations
NonRenewals
Reacquired
by
Franchisor
Ceased
OperationsOther
Reasons
Outlets at
End ofthe
Year
7
72
02
2fl
MI
MN
MO
MS
NE
NJ
NM
NC
NV
NY
OH
OK
PA
20092fllfl
2044)2011
20082009
4411
20092010
442
20402011
82
20082009
42
20092fllfl
24
20402011
4
20082009
241S
20092010
4814
20402011
4411
20082009
82
20092010
6
20402flll
20082flfl2
45
20092filfl
52
20402011
2
20082009
0
20092fllfl
02
20402011
2
20082009
3
20092010
3
20402011
3
20082009
444^
20092010
464S
20402011
4844
20082flfl2
02
20092fllfl
24
20402flil
45
0
20082flfl2
0
20092fllfl
20402flli
02
20082flfl2
3822
20092fllfl
3922
20402011
2926
20082009
15
15
20092flifl
20402011
4516
20082009
4412
20092fllfl
4314
DALOLJ
079684.0103
2fl
01
4fi
42
2fl
0
0
0
0
0
0
0
4fl
0
0
02
2fl
0
0
0
0
21
31
4fl
2
21
42
0
02
21
31
I
4fl
0
01
4fi
32
21
0
0
0
0
0
0
0
0
0
0
02
21
4fl
01
4fl
0
0
0
0
0
0
0
0
0
0
0
01
4fl
0
0
0
0
0
0
0
0
. 0
0
0
01
0
0
51
32
?fl
0
0
0
32
2
2fi
4fl
0
0
01
3fl
0
0
0
0
0
0
0
01
44
4fi
0
0
0
0
0
0
211
444
4fi
0
0
0
1
4fl
- 79-
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
01
0
0
0
0
0
02
0
0
01
0
0
01
0
0
0
0
0
0
0
0
0
0
0
02
0
0
0
0
0
0
0
0
04
0
0
0
0
0
7;
44S
82
2
24
4
41
4814
4411
4410
?6
6
65
52
2
2
02
2
2
3
3
3
464S
4844
4441
24
45
5S
0
02
25
3922
2926
2622
15
451j^
4615
4314
4415
CoLl
CoL2
Col. 3
Col. 4
CoLS
CoL6
CoL7
CoL 8
CoL 9
State
Year
Outlets
at Start
of Year
Outlets
Opened
Terminations
NonRenewals
Reacquired
by
Franchisor
Ceased
OperationsOther
Reasons
Outlets at
End ofthe
Year
0
0
SC
20082009
20092fllfl
20402011
SD
20082M2
20092fllfi
20402flll
20082flfl£
2009201fi
20402011
TN
TX
20082flfl2
20092fllfl
20402flll
20082009
20092filfi
20402011
2008^2
2009201fl
20402011
20082002
20092010
20402M1
-~ inns
VA
WI
WV
TO
-TAL''
TOTAL
)2flll
4415
1
0
4512
20
17
01
02
4715
ifi
20
01
4fl
42
0
21
4fi
1
0
0
30
21
2526
01
41
2625
25
30
30
92
468125
25
4?5172
36
54
4?2174
6S
40
21
40
272S
1
01
2822
29
42
40
0
0
0
0
0
01
0
01
40
35
0
20
5
0
02
0
20
51
con
- 59 • f:;;.'35^
J
'
-
,
T
A
'
2009
2010
i
'
/"
611
598
- ;.
0
01
4fl
0
0
0
0
0
01
01
40
01
0
0
0
0
0
0
0
0
0
,2
32
31
40
50
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
- 0
0
0
\
,,
0 . ;•:
5
7
0
0
Notes:
All numbers are as of fiscal year end for the referenced years, as applicable.
DALOLJ
079684.0103
- 80-
'\ ^ ^
4
17
47^15
4512
21
1
I
2625
25
2524
475172
472124
4741S0
2822
29
2910
0
01
I
5
51
32
. 644. ,
^'
1
(1)
01
0
0
02
0
0
0
0
0
0
0
0
01
0
0
01
0
0
0
0
0
01
0
0
598
572
Table 3B
Status of Franchised Outlets
(CICrS TO GOimiTS)
For years 2008 20102009-2011 (Note 1)
CoLl
CoL 2
CoL 3
CoL 4
CoLS
CoL 6
CoL 7
CoLS
CoL 9
State
Year
Outlets
at Start
of Year
Outlets
Opened
Terminations
NonRenewals
Reacquired
by
Franchisor
Outlets at
End ofthe
Year
0
01
1
I
4ft
0
42
2
21
I
1
1
01
4ft
0
0
0
0
4ft
0
0
0
0
0
01
4ft
0
42
2ft
0
0
0
0
01
4ft
0
0
01
4fl
0
0
0
4fi
01
4fl
I
42
2ft
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Ceased
OperationsOther
Reasons
0
0
0
0
0
0
0
0
01
0
0
0
0
0
0
0
0
01
( ;A
20082009
20092010
20402flU
20082009
20002010
20402011
20082009
20092010
20402ftU
20082002
20092010
204O20U
20082009
20092010
204020U
20082002
20092010
20402flU
I L
( JA
C)K
X
OT.L
67
^
10
4011
449
Notes:
(1) All numbers are as of fiscal year end for the referenced years, as applicable.
Table 4A
Status of Company-Owned Outlets
(CICrS PIZZA RESTAURANTS)
For years 2008 20102009-2011 (Note 1)
I
CoL
1
CoL 2
Stat
e
Year
AZ
20082009
20092010
2040^0^1
2008201)9
20092010
20402011
FL
DALOl;!
079684.0103
CoL 3
CoL 4
CoLS
CoL 6
CoL 7
CoL 8
Outlets
at Start
ofthe
Year
2
Outlets
Opened
Outlets
Reacquired
From
Franchisee
0
0
0
0
0
0
Outlets
Closed
^Outlets Sold
to
Franchisee
Outlets at
End ofthe
Year
0
0
0
ifl
0
01
02
2ft
0
ifl
0
0
2fl
0
0
4
4
41
2ft
0
64
4
4
0
0
0
0
0
0
- 81 -
01
1
1
4ft
0
0
2
21
4ft
I
1
1
62
76
6
4011
442
OS
CoL
1
CoL 2
CoL 3
Outlets
at Start
ofthe
Year
GA
20082009
24
20092010
03
IL
0
20i02flll
4t^
20082009
42
20092010
42
2040^011
32
4NI
06
20082002
~';^-l^3iiuia •-• ••
0
.
y i i ^ ^ w v i f T T ••, •'• .f.
0
•"^^^2040
4^.
^"^9'2008
im:'~ 2
>t^::2009
.
2 :
V-% y
6
20082010
6
20092011
Stat
e
Year
mi
^^2oio'^'^;
TO
TAL
2008^009
20092010
20402011
241S
4815
4512
CoL 4
CoLS
CoL 6
CoL 7
CoL 8
Outlets
Opened
Outlets
Reacquired
From
Franchisee
0
0
0
0
0
0
0
0 , ~y
Outlets
Closed
Outlets Sold
to
Franchisee
Outlets at
End ofthe
Year
0
0
0
0
0
0
01
0
0 ' y
y
0
"Oi' . •
0
1
^-^,^0
1
4ft
01
01
2ft
0
02
0
0
0
0
0
4ft
0
32
0
01
~ 0 .
0
y^ - 0 : ^ i
^
^
'
0 0 •'J,
' - 0.' ^ ^ ^ -'^ ,0
y
y
0 ' "
• 0' ^
• 0 ^ 0 , y
* 0 y0^
0
0
0
0
0
4ft
01
0
0
42
32
0
06
-0
2
2
i>^u/^o:-"''^'0
0
0
1
4ft
01
3
3
32
6
62
' 6
4815
4512
4210
Notes:
(1) All numbers are as of fiscal year end for the referenced years, as applicable.
Table 4B
Status of Company-Owned Outlets
(CICI'S TO GO UNITS)
For years 2008 20102009-2011 (Note 1)
CoL
1
CoL 2
Stat
e
Year
TX
TO
TAL
2008^009
20092010
20402flU
20082009,
2009^010
2040^911
CoL 3
CoL 4
CoLS
CoL 6
CoL 7
CoL 8
Outlets
at Start
ofthe
Year
2
21
1
2
21
1
Outlets
Opened
Outlets
Reacquired
From
Franchisee
0
0
0
0
0
0
Outlets
Closed
Outlets
Sold to
Franchisee
Outlets at
End ofthe
Year
01
4fl
0
01
0
0
0
0
0
0
21
1
1
21
1
1
0
0
0
0
0
0
4ft
0
Notes:
(1) All numbers are as of fiscal year end for the referenced years, as applicable.
DALO 1:11S6QS4.91I947S93
079684.0103
- 82-
'
Table 5A
Projected Openings as ofDecember 26,201025. 20U
(CICI'S PIZZA RESTAURANTS)
Column 1
Column 2
Column 3
Column 4
State
Franchise Agreement
Signed But Outlet Not
Opened (1)
Projected New
Franchised
Outlets in the
Next Fiscal Year
Projected New CompanyOwned Outlets
in Next Fiscal Year
Alabama :^ y - '
Arizona'^
Ar4(aiisas
Califomia
.Colorado
Delaware •
Florida
Illinois
"
- . '^^-o' *•
: •
'"'^ 0
/
• > • : 0'
4fl
^- - r O :
0
• ro;-
;
0 . c< •
2,
0
Oklftfaoffla
Pcnnsylvaitia
•
.Seuth^Qor-elina ' •
' Soutli-Dakota
Tennessee^
1
Texas
0
'
DALO 1 :llS60S4.91l947J{y,;^
079684.0103
^ -0
0
0
42
0
j-"^
- ,
'
^
'0
^'.-\.
- V--/
. ^
--o-a -
'
' *^
"0
"
.0'
^\
0 "
0
0
0
.0
4
-
^0
,
. '
0
'
. ,
0 - .
=
0
'
^
-*
^ 0" . "-^ "
0
. . 0 "l-f-••••i'-^n^
"
f
^
-"7/^0
• 0, ' "
0
o"f
0- ,
0^^ 0'
^
y
f
0
0
0
61
f
'
.
42
i
0
• - Q'-'''yy'^^:. ^y
- y
. c . "
- 0 -"
0
^ .V
^
'f.
21
;*o
:^^r>'>>' \o
.
" ' 0
0
- •
^ 0
31
':^'yr-mr'
^ ym
0
, K a n s a s ° \ '•'•^^i
lO
i ' j 0^
^Kejitueky^'*. ^
Louisiana
^ 0
Maryland
\
' 0
Michigan
. ,= .•.•
. Minnesota
0
: Mississippi
0
: MisseuiH
0
Nebraska
^ .
.
0
Nevada
C
New Jersey
0
^New Mexico ' ~ .
0
New York
4fi
' North-Garolina -
^f'*;«0
.
r ^ /O' - 1' •
''
0 i .
0
-'^
' " ' . ^0
' ' \ y '
''It . .
0
'•^ , - ^ , " 2 ^
• - y-^'z.p \ 0
\ J
'
0'^ . . ; •
^
^Q-'yf^^i-y..^
"v'^o'--^^ y-''-^
>-V • \o..'::r
.^A.u'.:.,o,.r4::
2U
- 83-
•'
V..^^.„.v'•0^ii-'?:.•:^..V.
21
Column 1
Column 2
State
Franchise Agreement
Signed But Outlet Not
Opened (1)
' Virginiajr^: Wisconsin
•West Virginia •
TOTALS
4
Column 3
Projected New
Franchised
Outlets in the
Next Fiscal Year
v"--'f.''^^"2
' \ '
• ,0^
Column 4
Projected New CompanyOwned Outlets
in Next Fiscal Year
y
,
3fl
252fl
21
Notes:
(1)
These franchisees are listed in Exhibit D.
Table SB
Projected Openings as ofDecember 26. 201025.2011
(CICI'S TO GO UNITS)
Column 1
Column 2
Column 3
Column 4
State
Franchise Agreement
Signed But Outlet Not
Opened
Projected New
Franchised
Outlets in the
Next Fiscal Year
Projected New CompanyOwned Outlets
in Next Fiscal Year
'Alabdnm-'^'i)
'^V ' ' ^ i '
^AfFzona
^sf**
}^mias^
fi!^
' California X 'V.i-:.
'01$ '-^ i
0 ,"^Z
" ^ ^ V'«'>-^-:^*'0''%i'^^-^c%^^
^•
r -.m-' ov
n'f^;^'-'".v^^o
. ^.
^ 0"^
-^^
£^ 0
GoIOFiHlo , - : ,
Florida
Goorgia
ijllinois .
^Indiana.
-^^
0
" - 0
0 ^
02
0 . . " • ^-
y ^
'y' • ^
0.
-"^•yfi/
>
r
I^n^s'/^
'
KentuckyLouisiana, ' ' V
Maryland .
.tMichigan'
^-r.
''Mjri'ncsotd
.
Mississippi t'^
'Missouri •
Nebraska .
.
" N ^ ^ y ~•Ncw Mexico
.
North CarGtiaa , y -
DALO 1:1156051.91194789.3
079684.0103
0
' 0
'
. ON"
y
^
_b
^
-'-^
•>," '
" /-"^^ :o.0
,0 r
it^ ^
0.,
0 - ' "
0
.
0
„0
''^
0'.
0 .
" 0'
^
'
"
'
- 84-
.'^
'
,
„
yH
"0,* ''0 ' ,
. ^" -
- # o^T'
^ '0
-
0
0
• : ~ ^0
' 'r - %0
i^o
"-'
0
-
• .
*
"-0
0..^ -
8 .
;
'0
~
0^
V
0
0''.s
0-
* •
.
.
Column 1
Column 2
State
Franchise Agreement
Signed But Outlet Not
Opened
Projected New
Franchised
Outlets in the
Next Fiscal Year
. 0 ' ^ T'- '
' ' . 0
..Mfev^'^-^o
•
0
gbkifthoijui. '
^ Pcn'nsylvanitt
Sbiith Carnlifl a;
^SoijtH!pakota
Texas
•Virginia' . ,'
Wisconsin
West Virginia
TOTALS
Column 4
Column 3
0 ..
.
..
^y-,
0
•
' 0 V'
"/'[•/' o^'.r-
'
0
u
, ^' -y,
^'
' '- '
"
01
ifQ y- '/
// ' 0
'^^y
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Projected New CompanyOwned Outlets
in Next Fiscal Year
, 0 r^'i.r"-/.
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.0. . .
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1
Disclosures Applicable to Both CiCi's Pizza Restaurant and To Go Units
The names, addresses and telephone numbers of our CiCi's Pizza Restaurant franchises and their
outlets as of December 26. 201025. 2011 are attached as Exhibit D, and the addresses and telephone
numbers of our CiCi's To Go Unit franchisees and their outlets as of December 26. 201025. 2011 are
attached as Exhibit D-1.
Attached as Exhibit E and E-1, respectively, is a list of the names and last known address and
telephone number of every CiCi's Pizza Restaurant franchisee and CiCi's To Go Unit franchisee who
had an outlet terminated, canceled, or not renewed, or otherwise voluntarily or involuntarily ceased to do
business under their agreements during our most recently completed fiscal year or who has not
communicated with us within 10 weeks of this disclosure document issuance date.
If you buy this franchise, your contact information may be disclosed to other buyers when you
leave the franchise system.
As of the date of this disclosure document, we are not offering any existing franchised outlets
to prospective franchisees, including those that cither have been reacquired by us or arc still-beingopcratcd bv current franchisees pending a transfcroutlets we control that were previouslv owned
bv a franchisee. If we begin to offer any such outlet, specific information about the outlet will be
provided to you in a separate supplement to this disclosure document.
As of December 26. 2010.25. 2011. we have no current or former franchisees who have signed
provisions during the last three fiscal years restricting their ability to speak openly to you about their
experience with the CiCi's Pizza franchise system.|
We sponsor the FAC described in Item 11. The FAC may be contacted through Kelly McCann,
KGM Enterprises, Inc., 3501 NW4323 N.W. 63^^ Suite 200a2fl. Oklahoma City, Oklahoma 73116;
(405) 650-0141. The following independent franchisee organization has asked to be included in this
disclosure document: Partners in Pizza Franchise Association, Inc., 222 South Ninth Street, Suite 2930,
Minneapolis,
Minnesota
5 5402;
[email protected];
DAL01:4456(
079684.0103
911947S9.1
- 85-
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ITEM 21
FINANCIAL STATEMENTS
Attached as Exhibit A are our audited consolidated financial statements as of December 26. 201025.
2011 and December 27. 200926. 2010 and for the 3 years ended December 26, 2010, December 27,
2009, and December 28, 2008 and our unaudited financial statements as of March 27, 2011 and for
the 3 month period then cndcd.25. 2011. Pecemher 26. 2010 . and December 27. 2009.
ITEM 22
CONTRACTS
Attached as Exhibits to this disclosure document are the following contracts and their
attachments:
1.
Development Agreement (Exhibit B)
2.
CiCi's To Go Addendum to Development Agreement (Exhibit B-1)
3.
Incentive Program Amendments to Development Agreement (Exhibit B-2)
4.
Franchise Agreement (Exhibit C)
5.
CiCi's To Go Addendum to Franchise Agreement (Exhibit C-l)
6.
Incentive Program Amendments to Franchise Agreement (Exhibit C-2)
7.
Investment Program Amendment to Franchise Agreement (Exhibit C-3)
8S*
Work Evaluation Agreement (Exhibit F)
9
Powers of Attorney for Leases, Telephone, Taxes and IntcrnGt2i
Lease (Exhibit G)
Assignment of
10.
Assignment of LcascConfidentialitv Agreement - Manuals CExhibit U^
11.
JMC Equipment Financing Documents (Promissory Note, Guaranty and Security
Agreement (Exhibit JI)
12.
Form of General Release (Exhibit K£)
13.
Gif^ Card Program Consent for ACH Debits and Credits (Exhibit LK)
DALO 1:11S6Q51.911947«9.3
079684.0103
- 86-
ITEM 23
RECEIPTS
Attached as the last 2 pages of this disclosure document are 2 Receipts. When you receive this
disclosure document, you must sign both Receipts and retum 1 to us, retaining the other for your records.
DALOV.i
079684.0103
- 87 -
EXHIBIT A
FINANCIAL STATEMENTS
DAL01:1156051.9J
079684.0103
pwc
CiCi Enterprises, LP
Consolidated Financial Statements with
Report of Independent Auditors
December 25, 2011 and December 26, 2010
pwc
Report of Independent Auditors
To the Board of Directors and Partner of
CiCi Enterprises, LP:
In our opinion, the accompanying consolidated balance sheets and the related consolidated
statements of Income, partner's capital and cash flows present fairly, in all material respects,
the financial position of CICI Enterprises, LP and its subsidiary at December 25, 2011 and
December 26, 2010, and the results of their operations and their cash flows for each of the
three years In the period ended December 25, 2011 in conformity with accounting principles
generally accepted In the United States of America. These financial statements are the
responsibility of the Partnership's management. Our responsibility Is to express an opinion
on these financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted In the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of materia! misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures
In the financial statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.
March 26. 2012
PricewaterhouseCoopers LLP, 2001 Ross Avenue, Suite 1800, Dallas, Texas 75201
T: (214) 999-1400. F: (214) 754-7991, www.pwc.com/us
CiCi Enterprises, L P
Consolidated Balance Sheets
December 25, 2011 and December 26, 2010
2010
2011
Assets
Current assets
Cash and cash equivalents
Cash and cash equivalents - Marketing Fund
Accounts receivable, net
Related party receivable
Inventories
Prepaid expenses and other
$
Total current assets
Property and equipment
Leasehold improvements
Operating equipment
Furniture and fixtures
Less accumulated depreciation and amortization
Net property and equipment
Note receivable
Total assets
Liabilities and Partner's Capital
Current liabilities
Accounts payable
Accounts payable - Marketing Fund
Current portion of deferred franchise fees
Accrued expenses and other current liabilities
816,142
530,618
1,806,896
1,507,330
75,433
302,717
$
1,944,888
1,971,880
1,742,957
1,795,834
88.038
374.691
5.039.136
7,918,288
2,788,683
3,253,278
736,570
4.082,114
3.080,030
774,000
6.778,531
7.936,144
(3,905,666)
(4,254.921)
2,872,865
242,534
3,681.223
$
8,154,535
$
11.599.511
$
193,581
1,083,793
494,091
3,563,436
$
218,124
3,231,549
936,543
3,596,244
Total current liabilities
Deferred franchise fees, less current portion
Other non-current liabilities
Total non-current liabilities
Total liabilities
5,334,901
7,982,460
398.909
429,881
938,457
547,555
828,790
1,486,012
6,163.691
9,468,472
1,990,844
2,131.039
Commitments and contingencies (Note 5)
Partner's capital
Total liabilities and partner's capital
$
8,154.535
$
11,599.511
The accompanying notes are an integral part of these consolidated financial statements.
2
CiCi Enterprises, LP
Consolidated Statements of Income
For the Years Ended December 25, 2011, December 26, 2010
and December 27, 2009
2011
Restaurant sales
Restaurant cost of sales
$
11,127.020
3,515.656
Gross profit
2010
$
12,295.141
3,716,539
2009
$
16,538.541
4,711.603
7,611.364
8,578,602
11,826,938
20,105.765
1.185.413
176.410
21,250,185
914,124
223,116
21.931,063
1.162,125
339,484
Total other revenues
21,467,588
22.387.425
23,432,672
Profit before operating expenses
29,078,952
30,966,027
35,259,610
3,922,334
1,621,196
842,426
433,167
434,383
10,502,991
4,574,434
1,844,409
934,481
387,890
11.240,338
6,351,093
2.550,062
1.176,072
583,610
12,678,901
Total operating expenses
17,756,497
18.981,552
23,339,738
Net operating income
11,322,455
11.984,475
11,919.872
Other revenues
Franchise royalties
Franchise fees
Other
Operating expenses
Labor and employee benefits
Occupancy costs
Depreciation and amortization
Net advertising costs
Impairment of leasehold improvements
Other general and administrative
Other Income (expense)
Interest expense
Interest income
Loss on disposal ofassets
Gain (loss) on disposal of leases
Total other expense
Net income
$
64
(278,238)
-
(5.400)
87
(237,468)
20,000
(4.475)
2.855
(636,779)
(778,955)
(278.174)
(222,781)
(1.417.354)
11,044.281
$
11.761,694
$
10,502,518
The accompanying notes are an integral part of these consolidated financial statements.
3
CiCi Enterprises, L P
Consolidated Statements of Partner's Capital
For the Years Ended December 25, 2011, December 26, 2010
and December 27, 2009
Balance, December 28,2008
$
Net income
Distribution to Partner
3,078,300
10.502.518
(10.125,000)
Balance. December 27, 2009
3.455,818
Net income
11,761,694
Stock-based compensation
Distribution to Partner
219.777
(13.306.250)
Balance, December 26, 2010
2,131,039
Net income
11.044.281
Stock-based compensation
Distribution to Partner
176,335
(11,360,811)
Balance, December 25, 2011
$
1,990,844
The accompanying notes are an integral part of these consolidated financial statements.
4
CiCi Enterprises, L P
Consolidated Statements of Cash Flows
Forthe Years Ended December 25, 2011, December 26, 2010
and December 27, 2009
2011
Cash flows from operating activities
Net income
Adjustments to reconcile net income to net
cash provided by operating activities
$
Depreciation and amortization
Loss on disposal of assets
Loss (gain) on disposal of leases
Impairment of leasehold improvements
Stock-based compensation
Changes in operating assets and liabilities
Accounts receivable, trade
Related party leceivable
Inventories
Prepaid expenses and other
Accounts payable
Accrued expenses and other current liabilities
Other non-current liabilities
Deferred franchise fees
2010
11,044,281
$
842,426
278,238
434,383
176,335
Net cash used in investing activities
Cash flows from financing activities
Distribution to Partner
Net increase (decrease) r) cash and cash equivalents
Cash and cash equivalents - beginning of year
Cash and cash equivalents - end of year
$
1.176,072
636,779
778.955
-
16,237
(286,407)
35,201
6,176
(3,355,294)
(849,718)
(837,252)
(495,M0)
7,328,267
(1,135,324)
2.900
(855.017)
321,214
(696,521)
375,000
(1.132,424)
(533.803)
(321.521)
(11,360.811)
(13,306.250)
(580.000)
(10,125,000)
580,000
(11,360.811)
(13,886,250)
(9.545,000)
(2.570,008)
114,789
(2,538,254)
3,916,768
3.801,979
6.340,233
1,346,760
$
Supplemental cash flow information
Cash paid for
Interest
Supplemental schedule of noncash investing transaction
Note receivable issued to sell store
$
10,502,518
934.481
237.468
(20,000)
14,534,842
Increase (decrease) in intercompany payable
Net cash used inflnancingactivities
$
1,246,203
(99,477)
14,367
53,115
674,014
653,259
(355,059)
(785,000)
9.923,227
Cash flows from investing activities
Purchases of property and equipment
Proceeds from sale of property and equipment
11,761.694
219.777
(63,939)
288,504
12,605
54,439
(2,172.299)
(32.808)
43,062
(982,000)
Net cash provided by operathg activities
2009
275,000
3.916,768
$
3,801,979
5,400
$
4,475
$
The accompanying notes are an integral part of these consolidated financial statements.
5
CiCi Enterprises, LP
Notes to Consolidated Financial Statements
1.
Organization and Summary of Significant Accounting Policies
Description o f Business
CiCi Enterprises, LP (CiCi, LP), a Delaware limited partnership, is the successor partnership of CiCi
Enterprises. Inc., (CiCi, Inc.) a Texas corporation formed in 1985. On September 22. 2003,
Awesome Acquisition Company, LP (AAC, LP), a Texas limited partnership, acquired the common
stock of CiCi. Inc., which then converted into CiCi, LP. On June 4, 2007, AAC, LP converted to
Awesome Acquisition Company (AAC). All partnership interests are held by AAC. The
shareholders' equity balance of CICi, Inc.. wtiich included 100 shares of issued and outstanding
stock, is induded in the partner's capital balance on the balance sheet.
CiCi, LP (the "Partnership") is engaged in the business of operating, selling and servicing franchises
for the "CiCi's Pizza" concept. Partnership-owned and franchise restaurants are located in 35 states
throughout the South, Southeast. East. Midwest, Northeast, and West.
Principles of Consolidation
All intercompany balances and transactions are eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted
In the United States of America requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Actual results could differ significantly firom those
estimates.
Fair Value of Financial Instruments
The carrying value of cash and cash equivalents, accounts receivable, accounts payable, and accnjed
liabilities approximates their fair value due to their short-term maturities.
Accounting Year
The Partnership uses a 52-53 week year with the year-end being the last Sunday of December.
Cash and Cash Equivalents
Cash and cash equivalents include money market accounts and any highly liquid debt instruments
purchased with an original maturity of three months or less. The Partnership maintains cash
balances In several financial institutions. Cash balances exceeded federally insured limits at
December 25, 2011 and December 26, 2010 and at various times throughout the year.
Accounts Receivable
Accounts receivable are reported net of an allowance for doubtful accounts. The allowance is
based on management's estimate of the amount of receivables that will actually be collected. Using
a combination of factors Including age of outstanding balances, recent payment history and an
evaluation ofthe customer's past financial condition, accounts are written off when determined to be
uncollectible. Management believes that accounts receivable are collectible, net of an allowance for
doubtful accounts of $5,000 and $80,000 as of December 25, 2011 and December 26. 2010,
respectively.
Inventories
Inventories, which are located at its Partnership-owned restaurants, are stated at the lower of cost
(determined on a first-in, first-out basis) or market. Provision is made for excess or obsolete
inventory. There was no such provision as of December 25. 2011 or December 26, 2010.
CiCi Enterprises, L P
Notes to Consolidated Financial Statements
Property and Equipment
Property and equipment are stated at cost. Depreciation and amortization are provided on a
straight-line method over the estimated useful lives of the respective assets. Estimated useful lives
are as follows:
Depreciable Lives
Leasehold improvements
Operating equipment
Furniture and fixtures
Lesser of the useful life or lease term
3 - 7 years
5 - 7 years
The Partnership's depreciation and amortization expense related to these assets was $842,426,
$934,481 and $1,176,072 for 2011, 2010 and 2009, respectively.
Maintenance and repairs are charged to expense as incurred. Major improvements are capitalized.
Impairment of Long-Lived Assets
The Partnership reviews long-lived assets, including property and equipment, for impairment
whenever events or changes In circumstances indicate that the carrying amount may not be
recoverable. If the sum ofthe expected future undiscounted cash flows is less than the carrying
amount of the asset, a loss is recognized for the difference between the fair value and carrying
value ofthe asset.
There was an impairment of leasehold improvements of $434,383 recorded for 2011, based on
anticipated store closings. There were no impairment charges recorded in 2010 or 2009.
Revenue Recognition
Franchise fee revenue from the sale of individual franchises is recognized when substantially all
significant services to be provided by the Partnership have been performed. The services to be
performed by the Partnership generally consist of assistance in training personnel, opening the
restaurant and, as appropriate, assistance with operations. These services are substantially
completed at the opening of the franchised restaurant. Continuing royalties, which are a percentage
of franchise restaurants' sales, are recognized as earned. Restaurant sales are recognized as the
products are sold.
Marketing Costs
Franchise and Partnership-owned restaurants each contribute approximately $2,300 or 3% of sales
per month as a marketing contribution in accordance with their respective franchise agreements.
Marketing contributions and expenses are tracked separately from other activities. These amounts
are Included in cash and cash equivalents - marketing fund in the consolidated balance sheets.
Any amounts not used (or used in excess of mariteting contributions) in a fiscal year are carried
over to the succeeding year and shown as deferred income (loss). Deferred Income (loss) was
$528,093 and ($68,806) at December 25, 2011 and December 26, 2010, respectively, and is
included in accrued expenses and other current liabilities in the accompanying balance sheets.
Marketing costs are expensed when advertisements are run. Production costs for advertisements
are generally expensed when incurred unless production costs are incurred and paid in the current
year for the next year's marketing campaign. In those instances, production costs are booked as
prepaid assets and then expensed in the subsequent fiscal year.
Income Taxes
The Partnership is a disregarded entity for federal and state income tax purposes. The
Partnership's income or loss for tax purposes is reported by AAC, Its parent company; therefore, it
does not provide for income taxes in its financial statements.
CiCi Enterprises, LP
Notes to Consolidated Financial Statements
operating Leases
The Partnership leases its store facilities urider operating leases with initial terms of 10 years and
typically 5-year renewal options. Rent expense for the Partnership's leases, which generally have
escalation provisions, is recorded on a straight-line basis over the tease term. The lease term
begins on the date of initial possession of the lease for the purposes of recognizing tease expense
over the term ofthe lease. The difference between rent expense and rent paid is recorded in
accrued expenses and other current liabilities in the consolidated balance sheets.
Taxes Collected from Customers
In the course of doing business, the Partnership collects various taxes from customers induding but
not limited to sales taxes. It is the Partnership's policy to record these on a net basis in the
consolidated statements of income.
Liquidity and Credit Risk
The Partnership believes that its cash balances and the cash flow generated fi"om operations will be
sufficient to provide for the Partnership's liquidity needs over the next several years.
The Partnership's long-term liquidity needs will consist of working capital and capital expenditure
requirements and the repayment of AAC's outstanding indebtedness, as the Partnership is a
guarantor. The Partnership intends to fund these long-term liquidity needs from the cash generated
from operations and, if necessary, future debt or equity financing. However, the ability to generate
cash or raise additional capita! is subject to the Partnership's performance, general economic
conditions, industry trends, and other factors.
2.
Franchise and Partnership-Owned Restaurants (Unaudited)
As of December 25, 2011, the Partnership has 11 Partnership-owned CiCi's Pizza locations and 562
franchised CiCi's Pizza locations. The following is a breakdown of the CiCi's Pizza locations for the
years ended December 25, 2011, December 26, 2010 and December 27, 2009:
2011
Partnership-owned locations
Locations open at beginning of year
New locations opened
Partnership-owned locations sold
to franchisees
Locations dosed
Total locations open at end ofyear
2010
13
1
16
(2)
(1)
(3)
-
(3)
(2)
11
13
16
2011
Franchised locations
Locations open at beginning of year
New locations opened
Partnership-owned locations purchased
by franchisees
Locations closed
Total locations open al end ofyear
2009
20
1
-
2010
2009
581
21
609
28
621
31
2
(42)
3
(59)
3
(46)
562
581
609
CiCi Enterprises, LP
Notes to Consolidated Financial Statements
2011
Total franchised and Partnership-owned
locations
Locations open at beginning of year
New locations opened
Locations closed
2010
594
22
' (43)
Total locations open at end of year
2009
625
28
(59)
641
32
(48)
594
625
573
During 2011, the Partnership sold two of its Partnership-owned restaurants to franchisees. The
Partnership recognized a loss on disposal of property and equipment of $264,894 on the sale,
primarily related to unamortized leasehold improvements. These costs are included in loss on
disposal of assets in the accompanying consolidated statements of income. The Partnership also
closed one store at the end of its lease. The majority of its assets were fully depreciated.
During 2010. the Partnership sold three of its Partnership-owned restaurants to franchisees. The
Partnership recognized a loss on disposal of property and equipment of $237,468 on the sale,
primarily related to unamortized leasehold improvements. These costs are included in loss on
disposal ofassets in the accompanying consolidated statements of income.
During 2009. the Partnership closed two of its Partnership-owned restaurants and sold three of its
Partnership-owned restaurants to franchisees. The Partnership recognized a loss on disposal of
property and equipment of $636,779. primarily related to unamortized leasehold improvements.
These costs are included in loss on disposal of assets in the accompanying consolidated
statements of income. In addition, the Partnership recognized a loss to terminate the leases of
$778,955, which Is included in loss on disposal of leases in the accompanying consolidated
statements of income.
3.
Related Party Transactions
The Partnership purchases the majority of its food product and store equipment from an entity
controlled by AAC. Most amounts due from the related party are the result of prior year advances.
Current payables are offset against current related party receivables, or paid in the normal course of
business. The following is a summary of the transactions and balances with the related party:
2011
Purchases from related party
Amounts due from related party,
non-interest bearing and
unsecured
$
3,506,682
2010
$
3,637,686
As of
December 25, 2011
As of
December 26, 2010
1.507,330
1,795,834
2009
$
4,695,050
The Partnership remits distributions to AAC for interest and income tax payments and other
requirements. The Partnership's distributions to AAC totaled $11.360.811, $13,306,250 and
$10,125,000 in 2011. 2010 and 2009. respectively. AAC provides any financing needs the
Partnership may have from time to time.
A former executive ofthe Partnership is an investor with one franchisee. All transactions conducted
with this franchisee are conducted on terms similar with all franchisees.
CiCi Enterprises, L P
Notes to Consolidated Financial Statements
4.
Profit Sharing and 401 (k) Savings Plan
The Partnership has a qualified cash or deferred compensation plan under section 401 (k) of the
Internal Revenue Code. Under the plan, employees may elect to defer a portion of their salary,
subject to the Internal Revenue Code limits. The Partnership may also make discretionary
contributions. The Partnership's contributions totaled $37,036. $34,928 and $37,153 for 2011, 2010
and 2009. respectively.
5.
Commitments and Contingencies
Operating Leases
The Partnership leases its store facilities under operating leases with initial terms of 10 years and
typically 5-year renewal options. Future minimum lease commitments at December 25. 2011 are as
follows:
2012
2013
2014
2015
2016
Thereafter
Total
$
800.457
764,379
768,654
761,410
599,705
930,780
$
4,625,385
Rental expense is recognized on a straight-line basis over each lease term. Certain leases contain
provisions for contingent rental payments of 3-5% of net sales over specified amounts. Base rent
expense, excluding common area maintenance and taxes, was $951,591, $1,068,231 and
$1,439,357 for 2011. 2010 and 2009. respectively.
The Partnership has guaranteed lease obligations for four franchisees in the course of providing
assistance to such franchisees In signing their initial leases. The Partnership may be required by
the lessor to make monthly rental payments or property tax and common area maintenance
payments if the franchisee does not make the required payments in a timely manner. At December
25, 2011, the potential future payments under these guarantees are $1,661,923. No amounts have
been reflected in the consolidated balance sheet as payment is not probable. The Partnership has
indemnification agreements with the franchisees under which the franchisee would be obligated to
reimburse the Partnership for any amounts paid under such guarantees. The guarantees terminate
through November 2018.
Litigation
The Partnership is subject to certain claims that arise in the normal course of business.
Management is not aware ofany such matters that would have a material adverse affect on the
Partnership's financial condifion.
6.
Equity
AAC, the parent of the Partnership, is a subsidiary of CiCi's Holdings. Inc. (CHI), which was formed
as part ofthe Transaction that occurred on June 4. 2007. The equity structure of CHI includes
Series A Preferred Stock and five classes of Common Stock. In the event of distributions to
stockholders, holders of Preferred Stock would be entitled to receive cumulative preferred
dividends.
10
CiCi Enterprises, L P
Notes to Consolidated Financial Statements
Certain employees of CiCi, LP participate in a restricted stock award program related to CHI stock.
A total of 124.513 shares of common stock of CHI have been reserved for issuance underthe
program. Compensation expense was determined to be immaterial forthe years ended December
25. 2011, December 26, 2010. and December 27. 2009.
The CiCi's Holdings, Inc. 2007 Stock Option Plan (the "Plan"), was established to award certain
employees options exercisable for shares of the common stock of CiCi's Holdings. Inc. A total of
60,000 shares of common stock are reserved for issuance under the Plan. As of December 25.
2011 and December 26, 2010. 29.908 and 30,000. respectively, of common stock remained
available for grants under the Plan. There were no grants prior to fiscal year 2010. Options vest
over a period of three to five years and expire ten years from the date of grant. Options not yet
vested terminate when the employee ceases to be employed by the Partnership.
Share-based compensation expense recognized during the period was based on the grant date fair
value ofthe portion of share-based payment awards that is ultimately expected to vest. As sharebased compensation expense recognized in the statements of income was based on awards
ultimately expected to vest, it has been reduced for estimated forfeitures. Forfeitures are required to
be estimated at the time of grant and revised, if necessary, in subsequent periods if actual
forfeitures differ from those estimates.
The following table summarized information about stock options outstanding at December 25, 2011:
Number of
Options
Exercise Price
Options outstanding at December 26, 2010
Grants
30,000
92
126.80
137.99
8.0
9.0
Options outstanding at December 25, 2011
30,092
126.83
8.0
$
Contractual
Life (years)
Grant Date
Fair Value
29.30
30.43
$
29.31
Vested and exercisable at December 25, 2011
The fair value for all options granted in 2011 and 2010 were estimated at the date of grant using the
Black-Scholes method. Key input assumptions used to estimate the fair value of stock options
include the exercise price of the award, the expected volatility of the Partnership's stock over the
opfion's expected term, the risk-free interest rate over the option's expected term, estimates of the
expected term option holders will retain their vested stock options before exercising them, and the
Partnership's expected annual dividend yield. The Partnership believes that the valuation technique
and the approach utilized to develop the underlying assumptions are appropriate in calculating the
fair values ofthe Partnership's stock options. Application of alternative assumptions could produce
significantly different estimates of the fair value of stock-based compensafion and consequently, the
related amounts recognized in the statements of income.
The following table summarizes the weighted average assumptions:
Risk-free interest rate
Expected lives
Dividend yield
Expected volatility
2011
2010
2.00%
3-5 years
0.00%
37.47%
2.49%
3-5 years
0.00%
36.69%
11
CiCi Enterprises, L P
Notes to Consolidated Financial Statements
Risk-free interest rate - The market yield on U.S. Treasury securifies for the expected life of each
opfion type is used as the risk-free interest rate.
Expected term - The expected term ofthe options represents the estimated period of time unfil
exercise and is based on historical experience of similar options, giving considerafion to the
contractual terms, vesfing schedules and expectations of future employee behavior.
Expected volatility - The Partnership's stock is not publicly traded. Therefore, the calculation of
volatility for the Partnership is based on the historical stock price volafility of a peer group of sim ilar,
publicly fraded companies, using adjusted closing monthly stock prices for the expected life of each
option type.
Expected dividend yield - The Partnership intends to retain any earnings to finance future growth,
and therefore, does not anficipate paying any cash dividends on its common stock in the
foreseeable future.
The Partnership recorded $176,335, $219,777, and $0 of stock-based compensation for the years
ended December 25, 2011, December 26, 2010, and December 27, 2009 respectively, in
administrafive labor and employee benefits expense in the consolidated statements of income. As
of December 25, 2011, total unrecognized stock-based compensation expense related to nonvested stock options was approximately $485,796, which Is expected to be recognized over the next
4.09 years.
7.
Subsequent Events
The Partnership has performed an evaluation of subsequent events through March 26, 2012, which
is the date the consolidated financial statements were available to be issued.
12
EXHIBIT B
DEVELOPMENT AGREEMENT AND STATE AMENDMENTS
DALOl :H560S4^11242m
079684.0103
DEVELOPMENT AGREEMENT
BETWEEN
CICI ENTERPRISES, LP,
A DELAWARE LIMITED PARTNERSHIP
DOING BUSINESS AS CICPS PIZZA
1080 W. BETHEL ROAD
COPPELL, TEXAS 75019
972-745-4200
AND
Name of Developer
Street Address
City
(
State
).
Area Code
Form dated March 25.301126.2012
FDD dated March 25, 2011, as amci
DAL0I:«5S8S8^J
079684.0103
Zip Code
Telephone
TABLE OF CONTENTS
Page
I.
GRANT
II. • FEES
III.
SCHEDULE AND MANNER FOR EXERCISING DEVELOPMENT
RIGHTS
IV.
TERM
V.
SERVICES OF FRANCHISOR
VI.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF
DEVELOPER AND CONTROLLING PRINCIPALS
VII.
DEFAULT AND TERMINATION; POST TERMINATION
OBLIGATIONS
VIII. TRANSFER OF INTEREST
IX.
COVENANTS
X.
INDEPENDENT CONTRACTOR
XI.
INDEMNIFICATION
XII. MISCELLANEOUS
XIII. ACKNOWLEDGMENTS
1
3
4
6
6
7
12
22
2625.
2=^M
3922
35
ATTACHMENTS
ATTACHMENT A
-
CONFIDENTIALITY AGREEMENT AND ANCILLARY COVENANTS
NOT TO COMPETE
ATTACHMENT B
-
STATEMENT OF OWNERSHIP INTERESTS AND DEVELOPER'S
PRINCIPALS
ATTACHMENT C
-
DESCRIPTION OF TERRITORY
ATTACHMENT D
-
LEASE ADDENDUM TERMS
ATTACHMENT E
-
ELECTRONIC FUNDS TRANSFER AUTHORIZATION
DAL01:11558583j
079684.01 03WESTU02462S9T?
230091 000004
CICI ENTERPRISES, LP
DEVELOPMENT AGREEMENT
This Development Agreement (the "Agreement") is made and entered into by and between CiCi
Enterprises, LP, a Delaware limited partnership ("Franchisor") and
("Developer") and shall be effective as of the date on which the last party executes this Agreement
("Effective Date").
Recitals:
As the result of the expenditure of time, skill, effort and money, Franchisor has developed and
owns a distinctive system (hereinafter "System") relating to the establishment and operation of
restaurants featuring an "Alt You'd Like To Eat" buffet and offering dine-in and carry-out pizza and
other Italian foods and related items.
The distinguishing characteristics of the System include, without limitation, distinctive exterior
and interior design, decor, color scheme, and fumishings; special recipes and menu items; uniform
standards, specifications, policies and procedures for operations; quality and uniformity of products and
services offered; procedures for inventory, management and financial control; training and assistance;
and advertising and promotional programs, all of which may be changed, deleted, improved, and further
developed by Franchisor from time to time.
Franchisor identifies the System by means of certain trade names, service marks, trademarks,
logos, emblems and indicia of origin, including, but not limited to, the mark "CiCi's" and such other
trade names, service marks, trademarks, logos, emblems and indicia of origin as are now designated, and
may hereafter be designated by Franchisor in writing, for use in connection with the System (hereinafter
referred to as "Marks").
Franchisor licenses to franchisees to use the Marks and the System to establish and operate
CiCi's Pizza restaurants ("Restaurants") under franchise agreements.
Developer wishes to obtain certain development rights to obtain and operate CiCi's Pizza
Restaurants under franchise agreements with Franchisor in the territory described in this Development
Agreement;
NOW, THEREFORE, the parties, in consideration of the mutual undertakings and commitments
set forth herein, the receipt and sufficiency of which are hereby acknowledged, agree as follows:
L
GRANT
A.
Grant of Rights. Franchisor hereby grants to Developer and Developer hereby accepts,
pursuant to the terms and conditions of this Agreement, the right and obligation to develop Restaurants
within the geographic area described in Attachment C to this Agreement, exclusive of any Reserved
Areas (defmed below) located within such geographic area (the "Development Area"). The development
rights shall be exercised following satisfaction of the conditions set forth in Section III. A. hereof and in
the manner and according to the development schedule (the "Development Schedule") set forth in
Sections III. B.-C. of this Agreement.
DALO 1:1155S58.31194851.3
079684.0103
B.
Scope of Developer's Rights. Developer acknowledges and agrees that the rights granted
hereunder pertain only to the development of Restaurants and that this Agreement does not confer upon
Developer a right or franchise to establish or operate any Restaurant. This Agreement is intended by the
parties to set forth the terms and conditions which, if fully satisfied by Developer, shall entitle Developer
to obtain franchise agreements for the establishment and operation of Restaurants within the
Development Area. This Agreement is not a franchise agreement and does not grant to Developer any
right or license to operate a Restaurant, distribute goods or services, or any right to use or interest in the
Marks (including, without limitation, any domain name incorporating the Marks or any confusingly
similar marks). Developer acknowledges and agrees that (i) Developer's rights and obligations under this
Agreement extend only to those geographic areas specifically described as a part of the Development
Area and do not include any other areas; (ii) the protections afforded to Developer in the Development
Area are limited to those set forth in Section LC. of this Agreement and do not, expressly or by
implication, include total exclusivity; (iii) the rights and duties set forth in this Agreement are personal to
Developer and that Franchisor has granted such rights in reliance on the representations and warranties of
Developer and its Controlling Principals (as defined in Section XII.T. of this Agreement). Developer and
the Controlling Principals have represented to Franchisor that they have entered this Agreement for the
purpose and with the intention to fully comply with the Restaurant development obligations hereunder.
C.
Territorial Protections. Subject to Section LD. and to Developer's full compliance with
this Agreement and any other agreement between Developer or any of its affiliates and Franchisor or any
of its affiliates, neither Franchisor nor any afflliate shall establish, or authorize any person or entity other
than Developer to establish, a CiCi's Pizza Restaurant in the Development Area during the term of this
Agreement.
D.
Retained Rights. Developer expressly agrees that Franchisor and its afflliates retain all
rights except those expressly granted to Developer herein, including, without limitation, (i) the right to
establish and operate, and to grant others the right to establish and operate, CiCi's Pizza Restaurants
under the Marks at any location outside the Development Area including locations that are adjacent or
proximate to the Development Area and in any Reserved Area (defined below) whether within or outside
the Development Area, (ii) the right to establish and operate, and to grant others the right to establish and
operate, restaurants under other trade names, service marks and trademarks at any location within or
outside of the Development Area, and (iii) the right within and outside the Development Area to offer
and sell, and grant others the right to offer and sell, any similar or dissimilar products and services,
whether identified by the Marks or by other trademarks, trade names or service marks, through any
channel or by any method of distribution other than a CiCi's Pizza Restaurant (including, without
limitation, by or through a CiCi's To Go Unit, the Internet or similar electronic media), on any terms and
conditions Franchisor deems appropriate. A "Reserved Area" is any enclosed area of retail sales
establishments in excess of 250,000 square feet, food courts, airports, hospitals, cafeterias, commissaries,
schools, hotels, office buildings and stadiums, arenas, ballparks, festivals, fairs, military bases and other
mass gathering locations or events. Without limiting the foregoing, Franchisor and its afflliates may,
among other things, offer and sell, and authorize others to offer and sell: (a) collateral products, such as
pre-packaged food products, T-shirts and other CiCi's memorabilia, under the Marks at or from any
location or through any channel of distribution; (b) food and beverage services under the Marks at or
through any permanent, temporary or seasonal food service facility or through any channel of distribution
except a CiCi's Pizza Restaurant located within the Development Area, which facilities may provide in
whole or in part the products and services offered by a CiCi's Pizza Restaurant; and (c) any products or
services (including, without limitation, any food or beverage services) under any other names and marks
at any location or through any channel of distribution.
079684.0103
- 2-
n.
FEES
A.
Development Fee. As partial consideration for the development rights granted to
Developer herein and the rights to be granted to Developer under separate franchise agreements
("Franchise Agreement"), Developer shall pay to Franchisor a total development fee of
Dollars ($
). The development fee shall equal the total of one hundred percent (100%) of the initial
franchise fee charged by Franchisor for the first (P') Restaurant to be developed hereunder and forty
percent (40%) of the initial franchise fees charged by Franchisor for each succeeding Restaurant to be
developed hereunder, determined as of the date this Agreement is executed, in accordance with Section
II.B. below. The development fee shall be due upon the execution of this Agreement and, except as
provided in Section VLB.3., shall be deemed fully eamed and nonrefundable by Franchisor for
administrative and other expenses incurred by Franchisor and for the development opportunities lost or
deferred as a result of the rights granted to Developer herein.
B.
Initial Franchise Fee. In addition, and as further consideration for the development rights
granted hereunder and the rights to be granted to Developer under separate Franchise Agreements,
Developer shall pay to Franchisor an initial franchise fee. The initial franchise fee shall be thirty
thousand dollars ($30,000) for the first Restaurant to be opened under this Agreement and twenty five
thousand dollars ($25,000) for the second and each succeeding Restaurant to be opened under this
Agreement. The pro rata portion of the development fee allocable to each Restaurant shall be credited
against the initial franchise fee due for that Restaurant. The initial franchise fee shall be paid to
Franchisor as provided in each Franchise Agreement.
C.
Administrative Fee: Data Collection Fee.
(1)
If Developer requests Franchisor to (i) amend this Agreement or any Franchise
Agreement negotiated or entered into pursuant to this Agreement or (ii) consent to, prepare any other
documentation for or review documentation for any transaction for which no specific fee is imposed
under any other provision of this Agreement or a Franchise Agreement, Developer shall pay the
applicable administrative fee to Franchisor as determined from time to time. The administrative fee
shall, in no event, exceed five thousand dollars ($5,000) per document.
(2)
If Developer fails to submit when due any information or report required by this
Agreement, the Development Manual (defined in Section XII.T) or the Confidential Operations Manuals
(defined in the Franchise Agreement), Franchisor may, after first providing written notice and a
reasonable opportunity to cure (which need not exceed ten (10) days) assess a data collection fee of up to
Fifty Dollars ($50.00) per week for so long as the information or report remains outstanding.
Franchisor's assessment of the data collection fee shall be in addition to its other rights and remedies.
D.
Past Due Amounts. Developer shall not be entitled to withhold payments due Franchisor
under this Agreement on grounds of alleged nonperformance by Franchisor hereunder. Any payment not
actually received by Franchisor on or before the date due shall be deemed overdue. Time is of the
essence with respect to all payments to be made by Developer to Franchisor. All unpaid obligations
under this Agreement shall bear interest from the date due until paid at the lesser of (i) the prime
commercial rate of interest as reported in the Wall Street Joumal (Southwestem edition) from time to
time or by any bank or financial institution designated from time to time by Franchisor plus three percent
(3%)), or (ii) the maximum rate allowed by applicable law. Notwithstanding anything to the contrary
contained herein, no provision of this Agreement shall require the payment or permit the collection of
079684.0103
- 3-
interest in excess of the maximum rate allowed by applicable law. If any excess of interest is provided
for herein, or shall be adjudicated to be so provided in this Agreement, the provisions ofthis paragraph
shall govem and prevail, and neither Developer nor its Principals shall be obligated to pay the excess
amount of such interest. If for any reason interest in excess of the maximum rate allowed by applicable
law shall be deemed charged, required or permitted, any such excess shall be applied as a payment and
reduction of any other amounts which may be due and owing hereunder, and if no such amounts are due
and owing hereunder then such excess shall be repaid to the party that paid such interest.
m.
SCHEDULE AND MANNER FOR EXERCISING DEVELOPMENT RIGHTS
A.
Franchise Agreement Execution: Compliance with Conditions.
1.
Developer shall exercise the development rights granted hereunder only by
entering into (or, with Franchisor's written consent, causing a major ity-owned subsidiary of Developer
("Subsidiary Franchisee") to enter into) a separate Franchise Agreement with Franchisor for each
Restaurant for which a development right is granted. The Franchise Agreement to be executed for each
Restaurant to be developed by Developer under this Agreement shall be the form of Franchise Agreement
then being used by Franchisor for new franchisees of Restaurants under the System, except that the initial
franchise fee shall be determined as provided in Section II.B. above. These franchise agreements shall be
included in the term "Franchise Agreement" as used in this Agreement and .shall be executed by
Developer in accordance with this Section IIL Developer shall cause all Subsidiary Franchisees to
execute the Controlling Principals' Acknowledgement and Agreement attached to the Franchise
Agreement.
2.
Prior to exercising any development right granted hereunder. Developer shall
apply to Franchisor for the license and franchise to operate a Restaurant within the Development Area. If
Franchisor, in its sole discretion, has determined that Developer has met each of the "operational",
"financial" and "legal" conditions set forth below (collectively the "Conditions") then Franchisor wili
grant Developer a license for a Restaurant in the Development Area. The Conditions are as follows:
(a)
"Operational": Developer is in compliance with the Development
Schedule and this Agreement (including, without limitation, the Development Manual, as defined in
Section XII.T). Developer and its afflliates are in compliance with any other development agreement
between them and Franchisor and its affiliates. Developer is conducting the operation of its existing
Restaurants, i f any, and is capable of conducting the operation of the proposed Restaurant (i) in
accordance with the terms and conditions of this Agreement, (ii) in accordance with the provisions of the
respective Franchise Agreements, and (iii) in accordance with the standards, specifications, and
procedures set forth and described in the Confidential Operations Manual (as defined in the Franchise
Agreement) or otherwise in writing.
(b)
"Financial":
Developer and the Controlling Principals satisfy
Franchisor's then-current financial criteria for developers and controlling principals of Restaurants with
respect to Developer's operation of its existing Restaurants, if any, and the proposed Restaurant.
Developer and the Controlling Principals have been and are faithfully performing all terms and
conditions under each of the existing Franchise Agreements with Franchisor. Developer, its afflliates
and the Controlling Principals are not in default, and have not been in default during the twelve (12)
months preceding Developer's request for financial approval, of any monetary obligations owed to
Franchisor or its affiliates under any Franchise Agreement or other agreement between Developer and its
affiliates and Franchisor or any of its afflliates. Developer acknowledges and agrees that it is vital to
DALO 1:11S58S8J1194851.3
079684.0103
- 4-
Franchisor's interest that each of its franchisees be financially sound to avoid failure of a Restaurant and
that such failure would adversely affect the reputation and good name of Franchisor and the System.
(c)
"Legal": Developer has submitted to Franchisor, in a timely manner, all
information and documents requested by Franchisor prior to and as a basis for the issuance of individual
franchises or pursuant to any right granted to Franchisor by this Agreement or by any Franchise
Agreement between Developer and Franchisor, and has taken such additional actions in connection
therewith as may be requested by Franchisor from time to time.
B.
Development Schedule.
The Development Schedule designates the number of
Restaurants in the Development Area to be established and in operation by Developer upon the
expiration of each of the designated development periods (the "Development Periods"). Developer agrees
to exercise its development rights according to Section III.A. and the Development Schedule below..
Development Period
Expiration Date of
Development Period
Cumulative Total Number
of Restaurants Located in the
Development Area Which Developer
Shall Have Open and in Operation
1
2
3
4
5
During any of the Development Periods set forth above. Developer may, subject to the terms and
conditions of this Agreement and with Franchisor's prior written consent (which may be withheld in its
sole discretion), develop more than the total minimum number of Restaurants which Developer is
required to develop during that Development Period. Any Restaurants developed during a Development
Period in excess of the minimum number of Restaurants required to be developed upon expiration of that
Development Period shall be applied to satisfy Developer's development obligation during the next
succeeding Development Period, if any. Notwithstanding the above. Developer shall not open or operate
more than the cumulative total number of Restaurants Developer is obligated to develop under the
Development Schedule.
1.
If during the term of this Agreement, Developer ceases to operate any Restaurant
developed under this Agreement for any reason. Developer shall develop a replacement Restaurant to
fulfill Developer's obligation to have open and in operation the required number of Restaurants upon the
expiration of each Development Period. The replacement Restaurant shall be developed within a
reasonable time to be agreed upon by the parties after Developer ceases to operate the Restaurant to be
replaced. If during the term of this Agreement, Developer, in accordance with the terms of any Franchise
Agreement for a Restaurant developed under this Agreement, transfers its interest in such Restaurant, the
transferred Restaurant shall continue to be counted in determining whether Developer has complied with
the Development Schedule so long as it continues to be operated as a Restaurant. I f the transferred
Restaurant ceases to be operated as a Restaurant during the term of this Agreement, Developer shall
develop a replacement Restaurant within a reasonable time to be agreed upon by the parties after the
DALO 1:115585831194851.3
079684.0103
- 5-
transferred Restaurant ceases to be operated as a Restaurant. In either case, the reasonable time period
shall apply to the development of the replacement Restaurant only and shall extend the term of the
applicable Development Period to the end of the mutually agreed upon time period only in Franchisor's
sole discretion; provided, however, that in no event shall such time period exceed one hundred eighty
(180) days.
2.
Failure by Developer to adhere to the Development Schedule (including any
extensions thereof approved by Franchisor in writing) or to any time period for the development of
replacement Restaurants as set forth in Section III.B. 1. shall constitute a material breach of this
Agreement.
C.
Projected Opening Dates. Developer acknowledges that the projected opening dates
("Projected Opening Dates") for each Restaurant set forth below are reasonable and consistent with the
requirements of the Development Schedule. Subject to Developer's compliance with Section III.A.
hereof. Developer shall execute a Franchise Agreement for each Restaurant at or prior to the applicable
execution date ("Execution Date") set forth below which Developer and Franchisor agree and
acknowledge shall be a date no later than one hundred twenty (120) days prior to the Projected Opening
Date for the applicable Restaurant.
Restaurant
Projected Opening Date
Execution Date
1
2
3
4
5
IV.
TERM
This term of this Agreement will begin on the Effective Date of the Agreement and, unless
sooner terminated, will expire on the earlier of: (i) the date Developer has completed its development
obligations under this Agreement, or (ii) 12:00 midnight on the last day specified in the Development
Schedule.
V. SERVICES OF FRANCHISOR
Franchisor agrees tp provide the services described below:
A.
advisable.
Site Selection Assistance.
Such site selection assistance as Franchisor may deem
B.
On-Site Evaluation. Such on-site evaluation as Franchisor may deem necessary on its
own initiative or in response to Developer's reasonable request; provided, however, that Franchisor shall
not provide an on-site evaluation for any proposed site prior to the receipt of all required information and
materials conceming such site pursuant to Section VLC. of this AgreemenL Upon Developer's request.
DALO 1:44558S8,31194851.3
079684.0103
- 6-
Franchisor (or its designee) will provide at no additional charge to Developer one (1) on-site evaluation
for each Restaurant to be developed hereunder; provided, that Franchisor shall have the right to require
Developer to reimburse Franchisor (or its designee) for its reasonable expenses incurred in making such
on-site evaluation. Thereafter, if additional on-site evaluations are deemed appropriate by Franchisor, or
upon Developer's reasonable request, Franchisor reserves the right to charge a reasonable fee for
performing each such evaluation and a further amount representing the reasonable expenses incurred by
Franchisor (or its designee) in connection with such on-site evaluation, including, without limitation, the
cost of travel, lodging and meals.
C.
Training. Training of Developer's Managing Principal in accordance with Section
VI.B.3. of this Agreement.
D.
Manuals. During the term of this Agreement, Franchisor will give Developer access to
one (1) copy of the Development Manual and at or before the opening of the first Restaurant developed
pursuant to this Agreement one (1) set of the Confidential Operations Manuals and such other manuals
and written materials as Franchisor shall have developed for use in the licensed business (as each such
Manual may be revised by Franchisor from time to time) (the "Manuals").
VL
REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEVELOPER AND
CONTROLLING PRINCIPALS
Developer and the Controlling Principals, as applicable, make the following representations,
warranties and covenants and accept the following obligations:
A.
Application. Organization and Ownership Information. Developer and the Controlling
Principals represent, warrant and covenant that all of the information provided in Developer's
Application for a CiCi's Pizza franchise was at the time made and is as of the Effective Date of this
Agreement tme and correct. Developer and the Controlling Principals further represent, warrant and
covenant as follows:
1.
I f Developer is a corporation, partnership, limited liability company or other
legal entity. Developer represents, warrants and covenants that:
(a)
Developer is duly organized and validly existing under the law of the
state of its formation;
(b)
Developer is duly qualified and is authorized to do business in each
jurisdiction in which its business activities or the nature of the properties owned by it require such
qualification;
(c)
Developer's corporate charter or written partnership or limited liability
company agreement shall at all times provide that the activities of Developer are confined exclusively to
the development of CiCi's Pizza Restaurants, unless otherwise consented to by Franchisor in writing;
(d)
The execution of this Agreement and the performance of the transactions
contemplated hereby are within Developer's corporate power, if Developer is a corporation or if
Developer is a partnership or limited liability company, permitted under Developer's written partnership
or limited liability company agreement and have been duly authorized by Developer;
DALO 1 :M558Sfe31194851.3
079684.0103
- 7-
(e)
I f Developer is a corporation, copies of Developer's articles of
incorporation, bylaws, other governing documents, any amendments thereto, resolutions of the Board of
Directors authorizing entry into and performance of this Agreement, and any certificates, buy-sell
agreements or other documents restricting the sale or transfer of stock of the corporation, and any other
documents as may be reasonably required by Franchisor shall have been fumished to Franchisor prior to
the execution of this Agreement; or, if Developer is a partnership or limited liability company, copies of
Developer's written partnership or limited liability company agreement, other goveming documents and
any amendments thereto shall have been fumished to Franchisor prior to the execution of this Agreement,
including evidence of consent or approval of the entry into and performance of this Agreement by the
requisite number or percentage of partners or members, as applicable, if such approval or consent is
required by Developer's written partnership or limited liability company agreement;
(f)
I f Developer is a corporation, partnership, limited liability company or
other legal entity, the ownership interests in Developer are accurately and completely described in
Attachment B. Further, if Developer is a corporation. Developer shall maintain at all times a current list
of all owners of record and all beneficial owners of any class of voting securities in Developer or, if
Developer is a partnership or limited liability company or other form of legal entity, Developer shall
maintain at all times a current list of all owners of an interest in the partnership, limited liability company
or other entity. Developer shall make its list of owners available to Franchisor upon request;
(g)
If, after the execution of this Agreement, any person ceases to qualify as
one of the Developer's Principals (defined in Section XII.T.) or if any individual succeeds to or
otherwise comes to occupy a position which would, upon designation by Franchisor, qualify him as one
of Developer's Principals, Developer shall notify Franchisor within ten (10) days after any such change
and, upon designation of such person by Franchisor as one of Developer's Principals or as a Controlling
Principal, as the case may be, such person shall execute such documents and instruments (including, as
applicable, this Agreement) as may be required by Franchisor to be executed by others in such positions;
(h)
I f Developer is a corporation. Developer shall maintain stop-transfer
instmctions against the transfer on its records of any of its equity securities and each stock certificate
representing stock of the corporation shall have conspicuously endorsed upon it a statement in a form
satisfactory to Franchisor that it is held subject to all restrictions imposed upon assignments by this
Agreement; including, without limitation, the options set forth in Section VIII.E.5. hereof If Developer
is a partnership or limited liability company, its written partnership or limited liability company
agreement shall provide that ownership of an interest in the partnership or limited liabilify company is
held subject to all restrictions imposed upon assignments by this Agreement, including, without
limitation, the options set forth in Section VIII.E.5. hereof In addition, any agreements among
Developer's shareholders, partners, or members, as applicable, shall provide for the consent of all
shareholders, partners or members to the transfer of the Interests (as defined in Section VIII.E.5.) to the
Franchisor or its designee upon the exercise of the options described in said Section VIII.E.5. and, with
respect to any partnership Franchisee, at the option of Franchisor (or its designee), to the admission of
the transferee of such Interest(s) to the partnership as a substitute partner;
2.
Developer and, at Franchisor's request, each of the Controlling Principals, have
provided Franchisor with current financial statements of Developer and such Principals. Such financial
statements present fairly the financial position of Developer and each of the Controlling Principals, as
applicable, at the dates indicated therein and with respect to Developer, the results of its operations and
its cash flow for the years then ended. Developer agrees that it shall maintain at all times, during the
term ofthis Agreement, sufficient working capital to fulfill its obligations under this Agreement. Each of
DALO 1 :llS5858.311948j;i.3
079684.0103
- 8-
the financial statements mentioned above shall be certified as true and correct and shall have been
prepared in conformity with generally accepted accounting principles applicable to the respective periods
involved and, except as expressly described in the applicable notes, applied on a consistent basis. No
material liabilities, adverse claims, commitments or obligations of any nature exist as of the date of this
Agreement, whether accrued, unliquidated, absolute, contingent or otherwise, which are not reflected as
liabilities on the financial statements of Developer or the Controlling Principals;
3.
The Controlling Principals shall execute the Controlling Principal Signature
Page /Guaranty and Assumption Agreement ("Guaranfy") attached to this Agreement and shall jointly
and severally guarantee Developer's performance of all of Developer's obligations, covenants and
agreements described in this Agreement pursuant to the terms and conditions of such Guaranty, and shall
otherwise bind themselves to the terms of this Agreement as stated therein. If required under Sections
IX.B.l. or IX.G., the Developer's Principals who do not execute the Guaranty shall each execute and
bind themselves to the confldentiality and noncompetition covenants set forth in the Confldentiality
Agreement and Ancillary Covenants Not to Compete which forms Attachment A to this Agreement.
4.
Developer shall provide Franchisor with any and all loan documents or other
documentation regarding the financing of the business contemplated hereby that Franchisor may request.
5.
At Franchisor's request, Developer will cause each Subsidiary Franchisee to
guarantee the obligations of any and all other Subsidiary Franchisees that sign Franchise Agreements
pursuant hereto. Further, in the event of any uncured default by a Subsidiary Franchisee under a
Franchise Agreement executed pursuant hereto, Developer hereby expressly authorizes (and will cause
each Subsidiary Franchisee to authorize) Franchisor to withdraw by electronic funds transfer from the
accounts identified in Attachment E to this Agreement and in similar attachments to those Franchise
Agreements signed by each Subsidiary Franchisee any funds necessary to cure such default.
Developer and the Controlling Principals acknowledge and agree that the representations,
warranties and covenants set forth above in Section VI.A.1.-5. are continuing obligations of Developer
and the Controlling Principals, as applicable, and that any failure to comply with such representations,
warranties and covenants shall constitute a material breach under this Agreement. Developer and the
Controlling Principals will cooperate with Franchisor in any efforts made by Franchisor to verify
compliance with such representations, warranties and covenants.
B.
Managing Principal: Operator.
I.
Prior to the execution of this Agreement, Developer shall designate and at all
times maintain an owner approved by Franchisor as Developer's Managing Principal ("Developer's
Managing Principal" or "Managing Principal"). Unless otherwise approved by Franchisor, Developer's
Managing Principal shall also be the Managing Principal for all Subsidiary Franchisees that execute
Franchise Agreements pursuant to this Development Agreement. The Managing Principal shall, during
the entire period he serves as such, meet the following qualifications and such other standards as may be
set forth by Franchisor in the Manuals or otherwise in writing:
(a)
The Managing Principal must be a Controlling Principal who maintains
a direct or indirect vested ownership interest in the Developer. Except as may otherwise be provided in
this Agreement, the Managing Principal's interest in Developer shall be and shall remain free of any
pledge, mortgage, hypothecation, lien, charge, encumbrance, voting agreement, proxy, security interest or
purchase right or options.
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(b)
Unless Franchisor has approved in writing the appointment of one or
more Operators to supervise the operation of the CiCi's Pizza Restaurants to be developed under
Franchise Agreements executed pursuant hereto, the Managing Principal shall devote full time and best
efforts to the supervision and conduct of the business contemplated by this Agreement. In addition,
without Franchisor's prior written consent, the Managing Principal shall not engage in any business other
than the development and operation of CiCi's Pizza Restaurants pursuant to this Agreement and the
Franchise Agreements executed hereunder. Developer agrees to vest the Managing Principal with
sufficient decision making authority to expedite the determinations and decisions that are essential to
effective and efficient development of CiCi's Pizza Restaurants in the Development Area.
(c)
The Managing Principal shall successfully complete Franchisor's
ig-principals of Developcrs-within-a-reasonable-pcriod of-timeaftcr-thc cxccutton-of-tliis Agreement (or^ in the ^ftse-of-ftny-snceessor-or-replacement-Managing
Principal^-vv4thin-a reasonnble-period of time after his or her appointment)-and-shall-attend and
complete-any-fldditional-training-that Franchisor may from time to time require;—Ikiless otherwiseagreed-in-writingHI>evelopcr shall be responsible f o r any and all cxpensesr-iwcludingr-without-the-costs-of^ravelr4odging, meals and wages ineur-red-by-Developer or-its-Managing
Principal in connection with such training. Franchisor reserves the right to charge a reasonable
fee for its training programs. I f Dcvcloper-s-initial-Managing Principal fails, in Franchisor's sole
judgmcnt^o-satisfttctorily completo Franchisor's orientation program, and-Devclopcr fails to-curcsueh-default within-ninety-{-90)-days-following writtcn-nQticc-from-Franchisor^Franchisor may
terminate this Agreement in accordance with Section VTI.B.5. and refund to Developer one half
(1/2) o f t h e development fee paid by Developer.
(d)
Developer
shall
maintain at all times during the term o f this Agreement a Managing Principal meeting the qualifications
set forth in this Section VLB. and shall at all times keep Franchisor informed as to the identity of the
person serving as Developer's Managing Principal. I f Franchisor, in its sole judgment, determines that
the business which is the subject of this Agreement is not supervised by a properly trained and qualified
Managing Principal, Franchisor shall notify Developer and Developer shall take appropriate corrective
measures within a reasonable period of time, not to exceed sixty (60) days from the date of the notice.
Further, during such time period, Developer shall provide interim supervision of the business
contemplated hereby in accordance with this Agreement and approved in writing by Franchisor. Any
failure to comply with the requirements of this Section VI.B.l.(d) shall be deemed a material breach of
this Agreement.
2.
With Franchisor's approval. Developer may appoint one or more Operators to
supervise the CiCi's Pizza Restaurants to be developed pursuant hereto. An Operator may, but need not,
be an owner and will be responsible for overseeing Restaurant operations. I f the Managing Principal and
the Operator differ, Developer and the Managing Principal remain fully responsible for the Operator's
performance.
(a)
Any Operator shall,
frecmcnt Execution Date in Section TTT.C. of this Agreement: provided, that i f an
Operator has not been appointed at least sixty (60) davs before the applicable Franchise
t Execution Date, then, in addition to anv other initiatives undertaken bv Developer to
terator. Franchisor mav require Developer to use a recruiting service approved hv
it in identifying a qualified Operator. Use of anv such service shall not relieve
ition to identify and appoint an Operator on or before the Franchise
t Executioi
during the entire period s/he serves in such capacity, meet
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Franchisor's qualifications and such other standards as may be set forth in the Manuals or otherwise in
writing. Without limitation of the foregoing, the person serving as Operator shall successfully complete
Franchisor's management training program (the duration and scope of which may vary, depending upon
such person's prior restaurant operating experience) within a reasonable period of time after the
execution of this Agreement and prior to the opening date of the first Restaurant to be developed
hereunder or, in the case of any additional Operator, successor or replacement, within a reasonable period
of time after his or her appointment I f Developer fails to appoint an initial Operator within tho
period necessary to complete training in advance ofthe fust Restaurant opening, Franchisor may
terminate this Agreement pursuant to Section VII.B.13.
(b)
Developer agrees to vest each Operator with sufficient decision making
authority to expedite the determinations and decisions that are essential to the effective and efficient
operation of the Restaurants developed hereunder. Each Operator must devote full time best efforts to
the supervision ofthe Restaurants and shall not engage in any other business or activity that may conflict
with such obligations.
(c)
Developer shall maintain at all times during the term of this Agreement
one or more qualified Operators and shall at all times keep Franchisor informed as to the identity of the
person(s) serving as Developer's Operator(s). If Developer's relationship with an Operator terminates or
materially changes. Franchisee shall promptly designate a qualified replacement and shall notify
Franchisor within five (5) business days of any change.
C.
Site Selection.
1.
Developer assumes all cost, liability, expense and responsibility for selecting,
obtaining and developing a site within the Development Area for each Restaurant to be developed
pursuant to this Agreement. Developer shall not make any binding commitment to a prospective vendor
or lessor of real estate with respect to a site for any Restaurant unless the site is approved as set forth
below. Developer acknowledges that the selection, procurement and development of a site for each
Restaurant is Developer's responsibility. Developer shall engage a licensed commercial real estate
broker approved by Franchisor in connection with the selection and acquisition of a site for each
Restaurant (in addition to any other professionals Developer may choose to consult or engage).
Developer acknowledges that Franchisor's approval of any prospective site and the rendering of
assistance in the selection of a site does not constitute a representation, promise, warranty or guarantee
by Franchisor that the Restaurant operated at that site will be profitable or otherwise successful.
2.
Prior to acquiring a site for each Restaurant by lease or purchase. Developer
shall select a site for each Restaurant that satisfies Franchisor's site selection requirements and shall
submit to Franchisor a description of the site and such other information as Franchisor may require,
including, without limitation:
(a)
evidence satisfactory to Franchisor demonstrating that the site satisfies
Franchisor's site selection requirements including, but not limited to, a letter of intent or other evidence
satisfactory to Franchisor which confirms Developer's favorable prospects for obtaining the site; and
(b)
following Franchisor's preliminary approval of the site, a copy of the
proposed purchase agreement or lease, as applicable, and such other information and materials as
Franchisor may reasonably require. No lease shall be approved by Franchisor unless an addendum to the
lease, containing covenants in substantially the form of those in Attachment D, is attached to the lease
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and incorporated therein. If the location is owned by a related party. Developer, as Franchisee, and the
owner must enter into a formal lease containing arms-length terms. Developer shall pay or
rcimbursomust have a lease compliance review bv an attorney approved hv Franchisor and shall he
responsible for ttsHig reasonable attomey's fees incurred in connection with itsthe compliance review
ofthe proposed purchase agreement or lease. Franchisee must provide a fullv executed copy of the
lease to Franchisor prior to the Restaurant opening.
All such information must be submitted in the form and delivered in the manner specified by Franchisor.
Franchisor shall respond to the request for site approval in a timely manner after receipt of all
information and materials required under this Section VI.C.2., prepared in the required format.
Franchisor shall have no obligation to act on a request by Developer for site approval until such time as
Franchisor shall have received all required materials in the format and delivered in the manner required
by Franchisor. No site may be used for a Restaurant unless it is first approved in writing by Franchisor,
and Franchisor may approve or disapprove, in its sole discretion, the proposed site. Developer's failure to
comply with this provision shall constitute a breach of this Agreement.
3.
Within ninety (90) days after Franchisor has approved the site for each
Restaurant as described above. Developer shall acquire the site by purchase or lease. Failure by
Developer to acquire the site for each Restaurant within the time and in the manner required herein shall
constitute a material breach under this Agreement.
D.
Intemet Website. Developer shall have no authority to and shall not establish any
website or listing on the Intemet or World Wide Web:
1.
Franchisor has established, or may establish, and maintains an Intemet Website
that provides information about the System and the products that CiCi's Pizza Restaurants provide.
Franchisor will have sole discretion and control over the Website (including timing, design, contents and
continuation). Franchisor may use part of the advertising fund monies it collects under the Franchise
Agreement to pay or reimburse the costs associated with the development, maintenance and update of the
Website.
2.
Franchisor may (but is not required to) include at the Website an interior page
containing information about the Restaurants developed under this Agreement.
3.
Franchisor also shall have the sole right (but no obligation) to develop an
Intranet network through which Franchisor and its franchisees can communicate by e-mail or similar
electronic means. If Franchisor develops such an Intranet network, Developer agrees to use the CiCi's
Intranet in strict compliance with the standards, protocols and restrictions that Franchisor includes in the
Manuals (including, without limitation, standards, protocols and restrictions relating to the encryption of
Confidential Information and prohibitions against the transmission of libelous, derogatory or defamatory
statements).
4.
An "Intemet" is a global computer-based communications network. An
"Intranet" is a restricted global computer-based communications network.
E.
Legal Compliance. Developer shall comply with all requirements of federal, state and
local laws, mles, regulations, and orders. Developer shall comply with all other requirements of this
Agreement and perform such other obligations as provided hereunder.
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VII.
DEFAULT AND TERMINATION; POST TERMINATION OBLIGATIONS
A.
Termination Without Notice or Cure. Developer shall be deemed to be materially in
default under this Agreement and all rights granted herein shall automatically terminate without notice to
Developer:
1.
If Developer becomes insolvent or makes a general assignment for the benefit of
creditors or files a voluntary petition under any section or chapter of federal bankruptcy laws or under
any similar law or statute of the United States or any state or admits in writing its inability to pay its
debts when due;
2.
If Developer is adjudicated bankrupt or insolvent in proceedings filed against
Developer under any section or chapter of federal bankruptcy law or any similar law or statute of the
United States or any state;
3.
I f a bill in equity or other proceeding for the appointment of a receiver of
Developer or other custodian for Developer's business or assets is filed and consented to by Developer,
or if a receiver or other custodian (permanent or temporary) of Developer's assets or property, or any part
thereof, is appointed by any court of competent jurisdiction;
4.
If proceedings for a composition with creditors under any state or federal law are
instituted by or against Developer;
5.
If a final judgment against Developer remains unsatisfied or of record for thirty
(30) days or longer (unless supersedeas bond is filed);
6.
If Developer is dissolved; or
7.
If execution is levied against Developer's business or property; or
8.
If judicial, non-judicial or administrative proceedings to foreclose any lien or
mortgage against the premises or equipment of any business operated hereunder or under any Franchise
Agreement is instituted and not dismissed within thirty (30) days; or
9.
If the real or personal property of the business operated hereunder or under any
Franchise Agreement shall be sold after levy thereupon by any sheriff, marshal or constable or is
otherwise sold by means of a foreclosure sale or a public or private auction or sale conducted in
accordance with applicable law.
B.
Termination on Notice. Developer shall be deemed to be materially in default and
Franchisor may, at its option, terminate this Agreement and all rights granted hereunder, without
affording Developer any opportunity to cure the default except as provided below, effective immediately
upon written notice to Developer, upon the occurrence of any of the following events of default:
1.
I f Developer fails to qualify for the grant of licenses as provided in Section
III.A.2 or otherwise fails to comply with the Development Schedule, or i f Developer fails to develop a
replacement Restaurant within any time period agreed upon by the parties under Section III.B. 1;
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079684.0103
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2.
I f Developer fails to execute each Franchise Agreement in accordance with
Section III.C;
3.
If Developer or any of the Controlling Principals is convicted of, or shall have
entered a plea of nolo contendere to, a felony, a crime involving moral turpitude or any other crime or
offense that Franchisor believes is reasonably likely to have an adverse effect on the System, the Marks,
the goodwill associated therewith or Franchisor's interests therein;
4.
If a threat or danger to public health or safety results from the constmction,
maintenance or operation of any Restaurant developed under this Agreement;
5.
I f Developer fails to maintain at all times a qualified Managing Principal
meeting the requirements of Section VLB.;
6.
If Developer or any of the Controlling Principals breach in any material respect
any of the representations, warranties and covenants in Section VI. A.;
7.
If Developer or any of the Controlling Principals transfers or attempts to transfer
any rights or obligations under this Agreement or any interest in Developer contrary to the terms of
Section VIIL;
8.
If Developer or any of the Controlling Principals fails to comply with the
covenants in Section IX.A., IX.B.l or IX.C. or if Developer fails to obtain the execution of the covenants
required under Section IX.B.l or IX.H. within thirty (30) days following Franchisor's request that
Developer obtain the execution of such covenants;
9.
If an approved transfer upon death or permanent disability is not effected within
the time period and in the manner prescribed by Section VIII.E.;
10.
If Developer misuses or makes any unauthorized use of the Marks or otherwise
materially impairs the goodwill associated therewith or with the System or Franchisor's rights therein
and does not cure such default within twenty-four (24) hours following notice from Franchisor;
11.
If Developer or any of its afflliates or Controlling Principals fails, refuses or
neglects promptly to pay when due any monetary obligation owing to Franchisor or any of its affiliates
under this Agreement, any Franchise Agreement executed pursuant to this Agreement, or any other
agreement (including, without limitation, any other development or franchise agreement with Franchisor
for any type of facility) and does not cure such default within five (5) days following notice from
Franchisor (or the applicable cure period contained in such other agreement, unless no cure period is
stated, in which case the cure period stated above shall apply);
12.
If Developer, or any of the Controlling Principals, repeatedly commits a material
breach of this Agreement, whether or not such breaches are of the same or different nature and whether
or not such breaches have been cured by Developer after notice by Franchisor;
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13.
I f Developer-s—Managing—Principal—foils—to—satisfactorily—complete
s-to cure-suehFranchisor's orientation program us required in Section VI.B.l.(c) a
gtng-Principal
default within ninety' (90) days following notice from Franchisor, or i f a
reto fails to
-serves-as an Operator under a Franchise Agreement ex
ite Franchisor's management training program and Franchisee fails to cure
set forth in such Franchise-Agreement, or Developer fails to designate an
approved Operator within the time period set forth in Section VI.B.2.ra1 or if no Operator satisfactorily
completes Franchisor's management training program prior to a Restaurant opening date:
14.
If Developer or any of its afflliates are in default of any other development
agreement between Developer or any of its afflliates and Franchisor for any type of facility and does not
cure such default within the applicable cure period, if any, contained in such development agreement or
if Developer or any of its affiliates are in default under any Franchise Agreement executed pursuant to
this Agreement or any other franchise agreement with Franchisor for any type of facility and does not
cure such default within the applicable cure period, if any, contained therein; or
15.
If any Guarantor files a voluntary petition under any section or chapter of federal
bankmptcy law or under any similar law or statute of the United States or any state thereof, or admits in
writing its inability to pay its debts when due; or if any Guarantor is adjudicated a bankrupt or insolvent
in proceedings filed against such Guarantor under any section or chapter of federal bankruptcy laws or
under any similar law or statute of the United States or any state;
16.
I f Developer seeks to transfer any Franchise Agreement (and/or the related
Restaurant assets) prior to completion of the Development Schedule, provided, that the parties may by
mutual agreement enter into a new Development Agreement for the remaining Restaurants.
C.
Termination With Notice and Cure. Except as provided above in Section VII.B., if
Developer fails to comply with any other term or condition imposed by this Agreement, any Franchise
Agreement or any other development or franchise agreement between Developer and Franchisor, as such
may from time to time be amended. Franchisor may terminate this Agreement only by giving written
notice of termination stating the nature of such default to Developer at least thirty (30) days prior to the
effective date of termination; provided, however, that Developer may avoid termination by immediately
initiating a remedy to cure such default and curing it to Franchisor's satisfaction within the thirty (30)
day period and by promptly providing proof thereof to Franchisor. If any such default is not cured within
the specified time, or such longer period as applicable law may require, subject to Section VII.D.,
Developer's rights under this Agreement shall terminate without further notice to Developer effective
immediately upon the expiration of the thirty (30) day period or such longer period as applicable law may
require.
D.
Additional Remedies. Upon default by Developer under Section VII.B. or C, Franchisor
has the option, in its sole discretion, in addition to exercising its option to terminate this Agreement as
provided in Sections VII.B. and C, to do any one or more of the following:
(i)
terminate or modify any territorial rights granted to Developer in Section I ,
including (without limitation) the termination of any or al! territorial protections under Section l.C. of
this Agreement.;
(ii)
reduce the area of such territorial rights;
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(iii)
reduce the number of Restaurants which Developer may establish pursuant to
Section III.B.;
(iv)
terminate or modify any right of first refusal granted to Developer in Section
(v)
pursue any other remedy Franchisor may have at law or in equity.
III.D.; or
1.
I f Franchisor elects to terminate or modify or reduce the area of territorial rights
granted to Developer as provided in this Section VII.D., Developer shall continue to develop Restaurants
in accordance with the Development Schedule, to the extent that the number of Restaurants Developer is
required to develop is reduced and/or the area in which such Restaurants are required to be developed is
reduced by Franchisor.
2.
If Franchisor exercises any of its rights in this Section VII.D., or if this
Agreement otherwise expires or terminates, Franchisor shall be entitled to establish, and to license others
to establish. Restaurants in the Development Area or in the portion thereof no longer part of the
Development Area or pursuant to any other modification of Developer's territorial rights, except as may
be othenvise provided under any Franchise Agreement which is then in effect between Franchisor and
Developer.
3.
Franchisor's exercise of any of its options under this Section VII.D. shall not
constitute a waiver by Franchisor to exercise its option to terminate this Agreement at any time with
respect to a subsequent event of defauh of a similar or different nature and shall not obligate Franchisor
to refund any portion of the Development Fee.
E.
Post Termination. Upon the termination or expiration of this Agreement, Developer
shall have no right to establish or operate any Restaurant for which a Franchise Agreement has not been
executed by Franchisor and delivered to Developer at the time of termination or expiration (but may
complete development of and/or operate Restaurants under then existing Franchise Agreements) and
Franchisor may develop, or authorize others to develop, CiCi's Pizza Restaurants in the Development
Area. Upon the expiration or termination of this Agreement Developer and the Controlling Principals
shall:
1.
Comply with the restrictions on Confidential Information contained in Section
IX.B. and the covenants against competition contained in Section IX.C. Any other person required to
execute similar covenants pursuant to Section IX.B.l or IX.G. shall also comply with such covenants;
and
2.
Promptly pay all sums owing to Franchisor and its subsidiaries or afflliates.
Such sums shall include all damages, costs and expenses, including reasonable attomeys' fees, incurred
by Franchisor as a result of any default by Developer, which obligation shall give rise to and remain,
until paid in ftill, a lien in favor of Franchisor against any and all of the persmal property, fiimishings,
equipment, signs, fixtures, and inventory owned by Developer and on the premises operated under any
Franchise Agreement at the time of default; and
3.
Pay to Franchisor all damages, costs and expenses, including reasonable
attorneys' fees, incurred by Franchisor in connection with obtaining any remedy available to Franchisor
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for any violation of this Agreement and subsequent to the termination or expiration of this Agreement in
obtaining injunctive or other relief for the enforcement of any provisions of this Section VILE.; and
4.
Immediately return the Development Manual to Franchisor.
F.
Relationship of Development Agreement Defaults to Franchise Agreements. No default
under this Agreement shall constitute a default under any Franchise Agreement between the parties
hereto, unless the default is also a default under the terms of such Franchise Agreement.
G.
Remedies Non-Exclusive. No right or remedy herein conferred upon or reserved to
Franchisor is exclusive of any other right or remedy provided or permitted by law or in equity.
VIII.
TRANSFER OF INTEREST
A.
By Franchisor. Franchisor and its affiliates shall have the right to transfer or assign this
Agreement and all or any part of their rights, interests or obligations herein or in Franchisor to any
person or legal entity without Developer's consent. Specifically, and without limitation to the foregoing.
Developer agrees that Franchisor may sell its assets, the Marks or the System to a third party; may offer
its securities privately or publicly; may merge, acquire other corporations, or be acquired by another
corporation; may undertake a refinancing, recapitalization, leveraged buyout or other economic or
fmancial restructuring; and, with regard to any or all of the above sales, assignments and dispositions,
Developer expressly and specifically waives any claims, demands or damages against Franchisor arising
from or related to the transfer of the Marks (or any variation thereof) or the System from Franchisor to
any other party. Nothing contained in this Agreement shall require Franchisor to remain in the business
of operating or licensing the operation of Restaurants or other restaurant businesses or to offer any
services or products, whether or not bearing the Marks, to Developer, if Franchisor assigns its rights in
this Agreement.
B.
By Developer and Principals. Developer understands and acknowledges that the rights
and duties set forth in this Agreement are personal to Developer, and that Franchisor has granted such
rights in reliance on the business skill, financial capacity and personal character of Developer and
Developer's Principals who will actively and substantially participate in the development, ownership and
operation of the Restaurants. Accordingly, neither Developer nor any Principal, nor any successor or
assign of Developer or any Principal, shall sell, assign, transfer, convey, give away, pledge, mortgage or
otherwise dispose of or encumber any direct or indirect interest in this Agreement (including, without
limitation, any or all of Developer's rights or obligations hereunder), the business operated under this
Agreement, or in Developer without the prior written consent of Franchisor. Any purported assignment
or transfer, by operation of law or otherwise, made in violation of this Agreement shall be null and void
and shall constitute a material breach of this Agreement.
I.
If Developer wishes to transfer all or part of its interest in this Agreement or in
the business operated hereunder, or i f Developer or a Principal wishes to transfer any interest in
Developer, transferor and the proposed transferee shall apply to Franchisor for its consent. Franchisor
shall not unreasonably withhold its consent to a transfer of any interest in Developer, in this Agreement
or in the business operated hereunder but Franchisor may, in its sole discretion, require any or all of the
following as conditions of its approval to any such transfer:
(a) All the accrued monetary obligations of Developer and its affiliates and the
Controlling Principals and all other outstanding obligations to Franchisor and its afflliates and the
DALO 1:1155858.311948513
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Controlling Principals arising under this Agreement or any Franchise Agreement or other agreement shall
have been satisfied in a timely manner and Developer shall have satisfied all trade accounts and other
debts, of whatever nature or kind, in a timely manner,
(b)
Developer and its affiliates and the Controlling Principals shall not be in
default ofany provision ofthis Agreement, any amendment hereof or successor hereto, or any Franchise
Agreement or other agreement between Developer or any of its afflliates or Controlling Principals and
Franchisor or any of its afflliates; and Developer, its affiliates, and the Controlling Principals shall have
substantially and timely complied with all the terms and conditions of such agreements during the terms
thereof;
(c)
The transferor and its principals (if applicable) shall have executed a
general release, in a form satisfactory to Franchisor, of any and all claims, against Franchisor, its
affiliates, and the officers, directors, shareholders, partners, agents, representatives, independent
contractors, servants and employees of each of them, in their corporate and individual capacities,
including, without limitation, claims arising under this Agreement, any Franchise Agreement and any
other agreement between Developer and Franchisor or any of its afflliates or under federal, state or local
laws, rules, regulations and orders;
(d)
The transferee shall enter into a written agreement, satisfactory to
Franchisor, assuming full, unconditional, joint and several, liability for and agreeing to perform from the
date ofthe transfer, all obligations, covenants and agreements of Developer in this Agreement; and, if
transferee is a corporation, partnership or limited liability company, such of transferee's principals as
Franchisor may designate as controlling principals shall execute such agreement as transferee's
controlling principals, and guarantee the performance of all such obligations, covenants and agreements;
(e)
The transferee shall execute the standard form development agreement
then being offered to new System developers or a revised form of this Agreement, as Franchisor deems
appropriate, and such other ancillary agreements as Franchisor may require, which agreements shall
supersede this Agreement and its ancillary documents in all respects and the terms of which agreements
may differ from the terms of this Agreement, and if the transferee is a corporation, partnership, or limited
liability company, such of transferee's principals as Franchisor may designate as controlling principals
shall execute such agreements as transferee's controlling principals, and guarantee the performance of all
such obligations, covenants and agreements;
(f)
The transferee shall demonstrate to Franchisor's satisfaction that
transferee meets the criteria considered by Franchisor when reviewing a prospective developer's
application for development rights, including, but not limited to, Franchisor's educational, managerial
and business standards, transferee's good moral character, business reputation and credit rating,
transferee's aptitude and ability to conduct the business contemplated hereunder (as may be evidenced by
prior related business experience or otherwise), transferee'sfinancialresources and capital for operation
of the business, and the geographic proximity of other territories with respect to which transferee has
been granted development rights or of other Restaurants operated by transferee, if any;
(g)
. The transferor shall remain liable for all of the obligations to Franchisor
in connection with this Agreement incurred prior to the effective date of the transfer and shall execute
any and all instruments reasonably requested by Franchisor to evidence such liability;
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(h)
Developer shall pay a transfer fee of five thousand dollars ($5,000), or
such greater amount as is necessary, to reimburse Franchisor for its reasonable costs and expenses
associated with reviewing the application to transfer, including, without limitation, legal and accounting
fees;
(i)
I f transferee is a corporation, partnership or limited liability company,
transferee shall make and will be bound by any or all of the representations, warranties and covenants in
Section VI.A. as Franchisor requests. Transferee shall provide to Franchisor evidence satisfactory to
Franchisor that the terms of Section VI.A. have been satisfied and are true and correct on the date of
transfer; and
(j)
Franchisor may require that substantially all of Developer's development
obligations shall have been performed.
2.
Developer shall not grant a security interest in any of Developer's assets without
Franchisor's prior written consent, which shall not be unreasonably withheld. In connection therewith,
the secured party will be required by Franchisor to agree that in the event of any default by Developer
under any documents related to the security interest. Franchisor shall have the right and option to be
substituted as obligor to the secured party and to cure any default of Developer.
3.
Developer acknowledges and agrees that each condition which must be met by
the transferee is reasonable and necessary to assure such transferee's full performance of the obligations
hereunder.
C.
Transfer for Convenience of Ownership and for Estate Planning.
{1)1, In the event the proposed transfer is to a corporation formed solely for the
convenience of ownership. Franchisor's consent may be conditioned upon any of the requirements in
Section VIII.B. 1, except that the requirements in Sections VIII.B. l.(c), (e), and (f) shall not apply and the
fee provided for in Section Vin.B.l.(h) shall be equal to Franchisor's reasonable out-of-pocket costs and
expenses (including legal and accounting fees associated with reviewing the application to transfer).
With respect to a transfer to a corporation formed for the convenience of ownership. Developer shall be
the owner of all the voting stock or interest of the corporation, and if Developer is more than one
individual, each individual shall have the same proportionate ownership interest in the corporation as he
had in Developer prior to the transfer.
(2)2.
Anything in this Section VIII. to the contrary notwithstanding, any individual
holding an interest in Developer may transfer all or a portion of his or her interest in Developer to any
immediate family member or to a trust established for the benefit of any such immediate family member,
provided (a) there is no uncured event of default under this Agreement, (b) the transferor provides prior
written notice to Franchisor, and (c) if the transfer is of a controlling interest, (i) the transferee executes a
guaranty and undertaking substantially similar to the form of the Controlling Principals signature page
attached to this Agreement, and (ii) the transferor continues to maintain the unrestricted power to direct,
directly or indirectly, the management and policies of the Developer, including those relating to the
payment of financial obligations, as reasonably determined by Franchisor. As used herein, a "controlling
interest" means the direct or indirect power to direct the management and policies of the Developer,
including those relating to the payment of financial obligations, whether through the ownership of voting
securities or interests, by contract, or otherwise, each as reasonably determined by Franchisor, and an
"immediate family member" means the spouse of a person, the natural and adoptive parents, natural and
adopted siblings, and natural and adopted children of such person and their spouses.
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D.
Right of First Refusal. I f Developer or a Controlling Principal wishes to transfer any
interest in this Agreement, the business operated hereunder, or in Developer, pursuant to any bona fide
offer received from a third party to purchase such interest, then such proposed seller shall promptly
notify Franchisor in writing of each such offer, and shall provide such information and documentation
relating to the offer as Franchisor may require. Franchisor shall have the right and option, exercisable
within thirty (30) days after receipt of such written notification and copies of all required documentation
describing the terms of such offer, to send written notice to the seller that Franchisor intends to purchase
the seller's interest on the same terms and conditions offered by the third party. In the event that
Franchisor elects to purchase the seller's interest, closing on such purchase must occur within sixty (60)
days from the date of notice to the seller of the election to purchase by Franchisor or such other date the
parties agree upon in writing. Any material change in the terms of any offer prior to closing shall
constitute a new offer subject to the same right of first refusal by Franchisor as in the case of an initial
offer. Failure of Franchisor to exercise the option afforded by this Section VIII.D. shall not constitute a
waiver of any other provision of this Agreement, including all of the requirements of this Section VIII.
relating to a proposed transfer.
1.
If the offer from a third party provides for payment of consideration other than
cash or involves certain intangible benefits. Franchisor may elect to purchase the interest proposed to be
sold for the reasonable cash equivalent. If the parties cannot agree within a reasonable time on the
reasonable cash equivalent of the non-cash part of the offer, then such amount shall be determined by two
(2) appraisers, with each party selecting one (1) appraiser, and the average of their determinations shall
be binding. In the event of such appraisal, each party shall bear its own legal and other costs and shall
split the appraisal fees. In the event that Franchisor exercises its right of first refusal herein provided, it
shall have the right to set off (i) all fees for any such independent appraiser due from Developer
hereunder and (ii) all amounts due from Developer, its affiliates and its Controlling Principals to
Franchisor or any of its affiliates.
2.
Failure to comply with the provisions of this Section VIII.D. prior to the transfer
of any interest in Developer, this Agreement, or the business operated hereunder, shall constitute a
material breach of this Agreement.
E.
Death or Permanent Disability.
1.
Upon the death of Developer (if Developer is a natural person) or any Principal
who is a natural person (the "Deceased"), the executor, administrator or other personal representative of
the Deceased shall, subject to Section VIII.E.(5) below, transfer the Deceased's interest in this
Agreement, in the business operated hereunder, or in Developer to a third party approved by Franchisor
within twelve (12) months after the date of death. I f no personal representative is designated or
appointed or no probate proceedings are instituted with respect to the estate of the Deceased, then the
distributee of such interest must be approved by Franchisor. If the distributee is not approved by
Franchisor, then the distributee shall transfer such interest to a third party approved by Franchisor within
twelve (12) months after the death of the Deceased.
2.
Upon the permanent disability of Developer (if Developer is a natural person) or
any Principal who is a natural person. Franchisor may, in its sole discretion, require such interest to be
transferred to a third party in compliance with this Section VIII. within six (6) months after notice to
Developer. "Permanent disability" shall mean any physical, emotional or mental injury, illness or
incapacity which would prevent a person from performing the obligations set forth in this Agreement or
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in the guaranty made part of this Agreement for at least ninety (90) consecutive days and from which
condition recovery within ninety (90) days from the date of determination of disability is unlikely.
Permanent disability shall be determined by a licensed practicing physician selected by Franchisor, upon
examination of the person; or i f the person refuses to submit to an examination, then such person
automatically shall be deemed permanently disabled as of the date of such refusal for the purpose of this
Section VIII.E. The costs of any examination required by this Section shall be paid by Franchisor.
3.
Developer or a representative of Developer must promptly notify Franchisor of
the death or claim of permanent disability of Developer or any Principal. At Franchisor's request, within
a reasonable period of time not to exceed seven (7) days from the date of death or permanent disability,
the executor, administrator or other personal representative of the Deceased or disabled person shall
provide for interim management of the business operated hereunder until such time as a transfer has been
effected in accordance with the provisions of this Section VIII.E. Such interim management shall be
approved by Franchisor and shall be conducted in accordance with the terms of this Agreement.
Franchisor may (but is not obligated to) assume such interim management of the business, provided that
(i) interim management of the business by Franchisor shall not relieve Developer of its obligations under
this Agreement; (ii) Franchisor shali not be liable for any debts, losses, costs or expenses incurred in the
operation of the business during any such period of interim management; (iii) Franchisor shall have the
right to charge a reasonable fee for its management services; and (iv) Developer shall, and hereby does,
indemnify and hold Franchisor harmless against any and all judgments, fines, losses, liabilities, costs,
amounts paid in settlement and reasonable expenses (including, but not limited to attomeys' fees)
incurred in connection with Franchisor's interim management of the business, except by reason of
Franchisor's gross negligence or willful misconduct.
4.
Any transfer upon death or permanent disability shall be subject to the same
terms and conditions as described in this Section for any inter vivos transfer. I f an interest is not
transferred upon death or permanent disability as required in this Section, then such failure shall
constitute a material breach under this Agreement.
5.
Anything contained in this Section VIII.E. to the contrary notwithstanding, upon
the death or permanent disability of Developer (if Developer is a natural person) or any Managing
Principal of a corporate, partnership or limited liability company Developer, Franchisor (or its designee)
shall have the option, to be exercised in writing within twenty (20) days from the date Franchisor
receives notice ofthe death or claim of permanent disability (the "Option Period"), to elect to purchase
the interest of the Developer and/or the Managing Principal in this Agreement, the business operated
hereunder, or in Developer, as applicable, as well as the further option to elect to purchase the interest of
any other Principal owning an interest in this Agreement, the business, or Developer (individually, an
"Interest" and collectively, the "Interests") upon the terms and at a price equal to the aggregate price
established pursuant to Section XIV.E.(5) of each Franchise Agreement that has been executed pursuant
hereto.
(a)
Anything contained in this Section VIII.E.5. to the contrary
notwithstanding, if Franchisor (or its designee) elects not to exercise the options described above during
the Option Period, then subsequent to the expiration of such Option Period, Franchisor (or its designee)
and the ovraer of any Interest (or such person's personal representative or distributee) may nevertheless
mutually agree that Franchisor (or its designee) shall purchase such Interest upon mutually satisfactory
terms. In such event, the parties shall not be bound by the price and terms applicable to the purchase of
an Interest during the Option Period, as described above, but rather, may mutually agree to another price
and other terms of purchase.
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(b)
Upon the execution of this Agreement, each Principal not othenvise
rt as a Controlling Principal and their respective spouses, as well as the
fespect4ve-spousefr-of-each-€ontr-olling-Prineipal-executing this Agreement^ shall execute a consent
to the provisions ofthis Section \^II.Ei5.^ the form of which is attached to this Agreement. Such
consent shall subject any interest they may have in an Interest covered by the options provided for
in this Scction-VIll.E.5. (whethcr-a-separate-property interesty-jeint ownership property interest^
comm unity-property-interest, or otherwise)-to-the-pfovisions hereof.
F.
No Waiver. Franchisor's consent to a transfer of any interest described herein shall not
constitute a waiver of any claims which Franchisor may have against the transferring party, nor shall it be
deemed a waiver of Franchisor's right to demand exact compliance with any of the terms of this
Agreement by the transferee.
G.
Securities Offerings. Securities or partnership interests in Developer may not be offered
to the public under the Securities Act of 1933, as amended, nor may they be registered under the
Securities Exchange Act of 1934, as amended, or any comparable federal, state or foreign law, rule or
regulation and may be offered by private offering or otherwise only with the prior written consent of
Franchisor which consent shall not be unreasonably withheld. All materials required for any such private
offering by federal or state law shall be submitted to Franchisor for a limited review as described below
prior to being filed with any govemmental agency (if applicable) and prior to their use. No offering by
Developer shall imply (by use of the Marks or otherwise) that Franchisor is participating in an
underwriting, issuance or offering of Developer's or Franchisor's securities or the securities of any
afflliate of Franchisor; and Franchisor's review of any offering materials shall be limited solely to the
subject of the relationship between Developer and Franchisor and its afflliates. Franchisor may, at its
option, require Developer's offering materials to contain a written statement prescribed by Franchisor
conceming the limitations described in the preceding sentence. Developer, its Controlling Principals and
the other participants in the offering must fully indemnify Franchisor, its afflliates, and the officers,
directors, shareholders, partners, agents, representatives, independent contractors, servants and
employees of each of them, in connection with the offering. For each proposed offering. Developer shall
pay to Franchisor a nonrefundable fee of Three Thousand Dollars ($3,000), or such greater amount as is
necessary to reimburse Franchisor for its reasonable costs and expenses associated with reviewing the
proposed offering materials, including, without limitation, legal and accounting fees. Developer shall
give Franchisor written notice at least thirty (30) days prior to the date of commencement of any offering
or other transaction covered by this Section.
IX.
COVENANTS
A.
Best Efforts. Developer and the Managing Principal covenant that during the term of
this Agreement, Developer and the Managing Principal shall devote best efforts to the management and
operation ofthe development activities contemplated under this Agreement.
B.
Confidentiality. Neither Developer nor any Controlling Principal shall, during the term
of this Agreement and thereafter, communicate, divulge, or use for the benefit of, any other person,
persons, partnership, limited liability company, association or corporation and, following the expiration
or termination of this Agreement or the transfer of their interest in this Agreement, they shall not use for
their own benefit, any confidential or proprietary information, trade secrets, knowledge or know-how
conceming the methods of conducting the business contemplated by this Agreement, including, without
limitation, the methods of establishing and operating a CiCi's Pizza restaurant and other information
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contained in the Manuals or otherwise disclosed or communicated to them or of which they may be
apprised under the terms of this Agreement ("Confidential Information"). Any and all information,
knowledge, know-how, techniques and any materials used in or related to the System which Franchisor
provides to Developer in connection with this Agreement shall be deemed Confidential Information for
the purposes of this Agreement. Developer and each of the Controlling Principals shall disclose such
Confidential Information only to those employees of Developer who must have access to it in connection
with their employment. Neither Developer nor the Controlling Principals shall at any time, without
Franchisor's prior written consent, copy, duplicate, record or otherwise reproduce such Confidential
Information, in whole or in part, nor otherwise make the same available to any unauthorized person. The
covenant in this Section shall survive the expiration, termination or transfer of this Agreement or any
interest herein and shall be perpetually binding upon Developer and each of the Controlling Principals.
1.
At Franchisor's request. Developer shall require and obtain execution of
covenants similar to those set forth in Section IX.B. from all personnel of Developer who have received
or have access to Confidential Information. Such covenants shall be substantially in the form contained
in Attachment A. All of Developer's Principals not required to sign this Agreement as a Controlling
Principal also must execute such covenants.
2.
If Developer or the Controlling Principals develop any new concept, process or
improvement in the development, operation or promotion of the Restaurants developed pursuant to this
Agreement, Developer is required to promptly notify Franchisor and provide Franchisor with all
necessary related information, without compensation. Developer and the Controlling Principals
acknowledge that any such concept, process or improvement will become the property of Franchisor, and
Franchisor may use or disclose such information to other franchisees as it determines to be appropriate.
C.
Noncompetition Covenants. Developer and the Controlling Principals specifically
acknowledge that, pursuant to this Agreement, Developer and the Controlling Principals will receive
valuable training and Confidential Information which are beyond their present skills and experience,
including, without limitation, information regarding operational, sales, promotional and marketing
methods and techniques of Franchisor and the System. Developer and the Controlling Principals
acknowledge that (i) such specialized training and Confidential Information provide a competitive
advantage and will be valuable to them in the development and operation of the Restaurants, and (ii)
gaining access to such specialized training and Confidential Information is, therefore, a primary reason
for entering into this Agreement. Developer and the Controlling Principals further acknowledge that
Developer has the right and the obligation, arising from this Agreement, to develop the Development
Area for the benefit of the System. In consideration for such specialized training. Confidential
Infonnation and rights, and in recognition of Developer's obligation to develop the Development Area
for the benefit of the System, Developer and the Controlling Principals covenant that:
1.
With respect to Developer, during the term of this Agreement (or with respect to
each of the Controlling Principals, during the term of this Agreement for so long as such individual or
entity remains a Controlling Principal) except as otherwise approved in writing by Franchisor, neither
Developer nor any of the Controlling Principals shall, either directly or indirectly, for themselves, or
through, on behalf of or in conjunction with any person, persons, partnership, limited liability company,
corporation or other entity or association:
(a)
Divert, or attempt to divert, any business or customer of the business
described hereunder to any competitor, by direct or indirect inducement or otherwise, or do or perform,
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directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and
the System.
(b)
Except with respect to facilities operated under valid Franchise
Agreements with Franchisor, own, maintain, operate, engage in, be employed by, or have any financial or
beneficial interest in (including any interest in limited liability companies, corporations, partnerships,
trusts, unincorporated associations or joint ventures), advise, assist, aid, make loans to or otherwise
support, any business located within the United States, its territories or commonwealths, or any other
country, province, state or geographic area in which Franchisor has used, sought registration of or
registered the Marks or the same or similar marks or operates or licenses others to operate a business
under the Marks or the same or similar marks, which business (i) is of a character and concept similar
to CiCi's brand food senice facilities, including u business which offers as a priniar)^ menu item or
mix of menu items derives more than fiftv percent ^50%^ of its revenue from selling piz?^
(including, but not limited to, fresh, frozen or unbaked pizza) and other Italian foods using the
distribution methods (including dine-in, carry-out or catering) authorized by Franchisor, or (ii) functions
as a commissary to sell, lease or supply any such business.
2.
With respect to Developer and for a continuous unintermpted period
commencing upon the expiration, termination, or transfer of all of Developer's interest in, this
Agreement (or with respect to each of the Controlling Principals, commencing upon the earlier of: (i) the
expirafion, termination, or transfer of all of Developer's interest in this Agreement or (ii) the time such
individual or enfity ceases to be a Controlling Principal), and continuing for two (2) years thereafter,
except as otherwise approved in writing by Franchisor, neither Developer nor any of the Controlling
Principals shall, directly or indirectly, for themselves or through, on behalf of or in conjunction with any
person, persons, partnership, limited liability company, corporation or other entity or association:
(a)
Divert, or attempt to divert, any business or customer of the business
described hereunder to any competitor, by direct or indirect inducement or otherwise, or do or perform,
directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and
the System.
(b)
Employ, or seek to employ, any person who is at that time or was within
the preceding sixty (60) days employed by Franchisor or by any other developer or franchisee of
Franchisor, or otherwise directly or indirectly induce such person to leave that person's employment.
(c)
Except with respect to facilities operated under valid Franchise
Agreements with Franchisor, own, maintain, operate, engage in, be employed by, or have anyfinancialor
beneficial interest in (including any interest in limited liability companies, corporations, partnerships,
tmsts, unincorporated associations or joint ventures), advise, assist, aid, make loans to or otherwise
support, any business that (i) is of a character and concept similar to CiCi's brand food sen ice
facilities, including a business which offers as n primary menu item or mix of menu items derives
more than fifty percent (50%"^ of its revenue from selling pizza (including, but not limited to, fresh,
frozen or unbaked pizza) and other Italian foods using the distribution methods (including dine-in,
carry-out or catering) authorized by Franchisor, or (ii) functions as a commissary to sell or lease to or
supply any such business, which business is, or is intended to be, located:
(1)
at the approved location of any facility established pursuant to
this Agreement (as specified in each Franchise Agreement); or
DALOl :1155858.31194851.3
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(2)
within the protected area of any facility established pursuant to
this Agreement (as described in each Franchise Agreement); or
(3)
within the Development Area; or
(4)
within a twentvten (201fl) mile radius of (A) the approved
location of any facility established pursuant to this Agreement, or (B) the protected area of any facility
established pursuant to this Agreement, or (C) the Development Area, or (D) any CiCi's brand food
service facility in existence or under constmction as of the earlier of: (x) the expiration or termination
of, or the transfer of all of Developer's interest in this Agreement; or (y) the fime a Controlling Principal
ceases to satisfy the definition of Controlling Principal, as applicable.
D.
Reasonable Restrictions. The parties acknowledge and agree that each of the covenants
contained herein contain reasonable limitations as to time, geographical area, and scope of activity to be
restrained and do not impose a greater restraint than is necessary to protect the goodwill or other business
interests of Franchisor. The parties agree that each of the covenants herein shall be construed as
independent of any other covenant or provision of this Agreement. If all or any portion of a covenant in
this Section IX. is held unreasonable or unenforceable by a court or agency having valid jurisdiction in
an unappealed fmal decision to which Franchisor is a party. Developer and the Controlling Principals
expressly agree to be bound by any lesser covenant subsumed within the terms of such covenant that
imposes the maximum duty permitted by law, as if the resulting covenant were separately stated in and
made a part of this Section.
E.
Reduction of Scope of Covenant. Developer and the Controlling Principals understand
and acknowledge that Franchisor shall have the right, in its sole discretion, to reduce the scope of any
covenant set forth in Section IX., or any portion thereof, without their consent, effective immediately
upon notice to Developer; and Developer and the Controlling Principals agree that they shall promptly
comply with any covenant as so modified, which shall be fully enforceable notwithstanding the
provisions of Section XII.B.
F.
Enforcement. Developer and the Controlling Principals expressly agree that the
existence of any claims they may have against Franchisor, whether or not arising from this Agreement,
shall not constitute a defense to the enforcement by Franchisor of the covenants in this Section IX.
G.
Execution of Covenants. At Franchisor's request, Developer shall require and obtain
execution of covenants similar to those set forth in Section IX. (including covenants applicable upon the
terminafion of a person's employment with Developer) from all personnel of Developer who have
received or will have access to Confidential Information or training from Franchisor. Such covenants
shall be substantially in the form set forth in Attachment A. All of Developer's Principals not required to
sign this Agreement as a Controlling Principal also must execute such covenants, provided, that
Franchisor reserves the right, in its sole discretion, to decrease the period of time or geographic scope of
the noncompetition covenant set forth in Attachment A or eliminate such noncompetition covenant
altogether for any party required to execute such agreement under this Section IX.
H.
Injunctive Relief Developer and the Controlling Principals acknowledge that any failure
to comply with the requirements of this Section shall constitute a material breach of this Agreement.
Developer and the Controlling Principals acknowledge that a violation of this Section would result in
irreparable injury to Franchisor for which no adequate remedy at law may be available, and Developer
and the Controlling Principals accordingly consent to the issuance of an injunction prohibiting any
DALO 11155858.31194851.3
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conduct by Developer or the Controlling Principals in violation of the terms of this Section. Developer
and the Controlling Principals agree to pay all court costs and reasonable attomey's fees incurred by
Franchisor in connection with the enforcement of this Section, including payment of all costs and
expenses for obtaining injunctive relief or any other remedy available to Franchisor for any violation of
the requirements of this Section.
I.
Anti-Terrorist Activities. Developer certifies certify that neither Developer nor any of
Developer's owners, employees or anyone associated with Developer is listed in connection with any
Anti-Terrorism Law and Developer agrees not to hire or have any dealings with a person so listed.
Developer further certifies that Developer has no knowledge or information that, if generally known,
would result in Developer, its owners, employees, or anyone associated with Developer being so listed.
Developer agrees to comply with and/or assist Franchisor to the fullest extent possible in Franchisor's
efforts to comply with the Anti-Terrorism Laws and, in connection with such compliance. Developer
represents and warrants that none of Developer's property or interests are subject to being "blocked"
under any ofthe Anti-Terrorism Laws and that Developer and its owners are not otherwise in violation of
any of the Anti-Terrorism Laws. Developer specifically acknowledges and agrees that Developer's
indemnification responsibilities as provided in Section XI. of this Agreement pertain to Developer's
obligations under this Section IX.L Any misrepresentation by Developer under this Section or any
violation of the Anti-Terrorism Laws by Developer, its owners, or employees shall constitute grounds for
immediate termination of this Agreement and any other agreement Developer has entered into with
Franchisor or one of Franchisor's affiliates in accordance with the terms of Section VILA, and VILE, of
this Agreement. Anti-Terrorism Laws" means Executive Order 13224 issued by the President of the
United States, the Terrorism Sanctions Regulations (Title 31, Part 595 of the U.S. Code of Federal
Regulations), the Foreign Tcrtorist Organizations Sanctions Regulations (Title 31, Part 597 of the U.S.
Code of Federal Regulations), the Cuban Assets Control Regulations (Title 31, Part 515 of the U.S. Code
of Federal Regulations), the USA PATRIOT Act, and all other present and future federal, state and local
laws, ordinances, regulations, policies, lists and any other requirements of any govemmental authority
(including, without limitation, the United States Department of Treasury Office of Foreign Assets
Control) addressing or in any way relating to terrorist acts and acts of war..
X.
INDEPENDENT CONTRACTOR
A.
Independent Contractor Relationship. The parties acknowledge and agree that this
Agreement does not create a fiduciary relationship between them, that Developer shall be an independent
contractor and that nothing in this Agreement is intended to constitute either party an agent, legal
representative, subsidiary, joint venturer, partner, employee, joint employer or servant of the other for
any purpose. Developer shall have no right to bind or obligate Franchisor in any way, and shall in no
way represent that it has any right to do so. Developer shall exercise full and complete control over and
have full responsibility for its contracts, daily operations, and employment practices and policies,
including, without limitation, recruitment, selection, hiring, disciplining, firing, compensation, and work
mles..
B.
Notice of Relationship. During the term of this Agreement, Developer shall hold itself
out to the public as an independent contractor conducting its development operations pursuant to
development rights granted by Franchisor. Developer agrees to take such action as shall be necessary to
that end, including, without limitation, exhibiting a notice of that fact in a conspicuous place in any
Restaurant established under any Franchise Agreement for the purposes hereunder, the content and form
of which Franchisor reserves the right to specify in writing.
DALOl :1155858.31194851.3
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C.
No Liability. Developer understands and agrees that nothing in this Agreement
authorizes Developer or any of the Controlling Principals to make any contract, agreement, warranty or
representation on Franchisor's behalf, or to incur any debt or other obligation in Franchisor's name and
that Franchisor shall in no event assume liability for, or be deemed liable under this Agreement as a
result of, any such action, or for any act or omission of Developer or any of the Controlling Principals or
any claim or judgment arising therefrom.
XL
INDEMNIFICATION
A.
Indemnity. Developer and each of the Controlling Principals shall, at all times,
indemnify and hold harmless to the fullest extent permitted by law Franchisor, its affiliates, successors
and assigns, and the officers, directors, shareholders, partners, agents, representatives, independent
contractors, servants and employees of each of them ("Indemnitees") from all "losses and expenses" (as
defined in XI.D.(2) below) incurred in connection with any action, suit, proceeding, claim, demand,
investigation or inquiry (formal or informal), or any settlement thereof (whether or not a formal
proceeding or action has been instituted) which arises out of or relates to this Agreement in any way or
which arises out of or is based upon any of the following:
!.
The infringement, alleged infringement, or any other violation or alleged
violation by Developer or any of the Controlling Principals of any patent, mark, copyright or other
proprietary right owned or controlled by third parties (except as such may occur with respect to any right
to use the Marks, any copyrights or other proprietary information granted to Developer under a Franchise
Agreement);
2.
The violation, breach or asserted violation or breach by Developer or any of the
Controlling Principals of any federal, state or local law, regulation, ruling, standard or directive, or any
industry standard;
3.
Libel, slander or any other form of defamation of Franchisor, the System, or qny
developer or franchisee under the System, by Developer or by any of the Controlling Principals;
4.
The violation or breach by Developer or by any of the Controlling Principals of
any warranty, representation, agreement or obligation in this Agreement or in any Franchise Agreement
or other agreement between Developer or any of its affiliates and Franchisor or any of its afflliates, or the
officers, directors, shareholders, partners, agents, representatives, independent contractors and employees
of any of them; and
5.
Acts, errors or omissions of Developer, any of Developer's affiliates, any of the
Controlling Principals and the respective officers, directors, shareholders, partners, agents,
representatives, independent contractors, servants and employees of any of them in connection with the
performance of the development activities contemplated under this Agreement or the establishment and
operation of any Restaurant pursuant to a Franchise Agreement, including, but not limited to, any acts,
errors or omissions of any of the foregoing in the operation of any motor vehicle or the use of any
product or service (including, without limitation, those recommended or required by Franchisor).
B.
Defense of Claim. Developer and each of the Controlling Principals agree to give
Franchisor immediate notice of any such action, suit, proceeding, claim, demand, inquiry or
investigation. At the expense and risk of Developer and each of the Controlling Principals, Franchisor
may elect to assume (but under no circumstance is obligated to undertake), or associate counsel of its
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own choosing with respect to, the defense and/or settlement of any such acfion, suit, proceeding, claim,
demand, inquiry or investigation. Such an undertaking by Franchisor shall, in no manner or form,
diminish the obligafion of Developer and each of the Controlling Principals to indemnify the Indemnitees
and to hold them harmless.
C.
Remedial Action. In order to protect persons or property or its reputation or goodwill, or
the reputafion or goodwill of others. Franchisor may, at any time and without nofice, as it, in its judgment
deems appropriate, consent or agree to settlements or take such other remedial or corrective action as it
deems expedient with respect to the action, suit, proceeding, claim, demand, inquiry or investigation if, in
Franchisor's sole judgment, there are reasonable grounds to believe that:
1.
any ofthe acts or circumstances enumerated in Section XI.A.(l)-(4) above has
occurred; or
2.
any act, error or omission as described in Section XI.A.(5) may result directly or
indirectly in damage, injury or harm to any person or any property.
D.
Losses and Expenses.
1.
All losses and expenses incurred under this Section XI. shall be chargeable to
and paid by Developer or any of the Controlling Principals pursuant to its obligations of indemnity under
this Section, regardless of any action, activity or defense undertaken by Franchisor or the subsequent
success or failure of such action, activity or defense.
2.
As used in this Section XL, the phrase "losses and expenses" shall include,
without limitation, all losses, compensatory, exemplary or punitive damages, fines, charges, costs,
expenses, lost profits, reasonable attorneys' fees, court costs, settlement amounts, judgments,
compensation for damages to Franchisor's reputation and goodwill, costs of or resulting from delays,
financing costs, costs of advertising material and media time/space and costs of changing, substituting or
replacing the same, any and all expenses of recall, refunds, compensation and public notices and all other
payments of money incurred in connection with the matters described.
E.
Contributory Negligence. The Indemnitees do not assume any liability whatsoever for
acts, errors or omissions of any person with whom Developer, any of the Controlling Principals or
Developer's afflliates or any of the officers, directors, shareholders, partners, agents, representatives,
independent contractors and employees of Developer or its afflliates may contract, regardless of the
purpose. Developer and each of the Controlling Principals shall hold hannless and indemnify the
Indemnitees for all losses and expenses which may arise out of any acts, enors or omissions of
Developer, the Controlling Principals, Developer's affiliates, the officers, directors, shareholders,
partners, agents, representafives, independent contractors and employees of Developer and its affiliates
and any such other parties without limitation and without regard to the cause or causes thereof or the
negligence (whether such negligence be gross, sole, joint or concunent, or acfive or passive) or strict
liability of Franchisor or any other party or parties arising in connection therewith, including, without
limitafion, the Indemnitees. Developer acknowledges that this Section XI.E. clearly and unequivocally
meets the requirements of the express negligence mle of the Texas Supreme Court and inevocably
waives any claim to the contrary.
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F.
Mitigation Not Required. Under no circumstances shall the Indemnitees be required or
obligated to seek recovery from third parties or otherwise mitigate their losses in order to maintain a
claim against Developer or any of the Controlling Principals. Developer and each of the Controlling
Principals agree that the failure to pursue such recovery or mitigate loss will in no way reduce the
amounts recoverable from Developer or any of the Controlling Principals by the Indemnitees.
G.
Survival of Obligations. Developer and the Controlling Principals expressly agree that
the terms of this Section XI. shall survive the termination, expiration or transfer of this Agreement or any
interest herein.
XIL
MISCELLANEOUS
A.
Notices.
(1)
Except as expressly provided in subsection (2) below, any and all notices
required or permitted under this Agreement shall be in writing and shall be delivered by electronic mail
to the parties at the following e-mail addresses:
Notices to Franchisor:
Notices to Developer
and Controlling Principals:
[email protected]
,
[insert cicispizza.com e-mail address issued to
Managing Principal]
All notices and other written communications shall be sent through Franchisor's server and shall be
deemed delivered and received on the date the transmission is received in the e-mail box designated
above, whether or not the party receiving such message opens and reads the message in a timely manner.
Franchisor and Developer and Developer's Managing Principal have, and each of them hereby accept,
the obligation to check, open and read the messages in the e-mail boxes designated above at least once
each business day. Developer and Developer's Managing Principal further agree to forward any such
message received to the Controlling Principals.
(2)
Upon the expiration or termination of this Agreement or if, for any reason.
Franchisor no longer provides a cicispizza.com e-mail account to Developer, then all future notices shall
be in writing and shall be personally delivered or mailed by expedited delivery service or certified or
registered mail, retum receipt requested, first-class postage prepaid, or sent by prepaid facsimile
(provided that the sender confirms the facsimile by sending an original confirmation copy by expedited
delivery service or certified or registered mail within three (3) business days after transmission) to the
respective parties at the addresses set forth below unless and until a different address has been designated
by written notice to the other party. Any notice shall be deemed to have been given (whether or not
delivery is accepted) at the time of personal delivery or, in the case of expedited delivery service on the
next business day, or, in the case of registered or certified mail, three (3) business days after the date and
time of mailing, or, in the case of facsimile, upon transmission (provided confirmation is sent by
expedited delivery service or registered or certified mail as provided below).
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Notices to Franchisor:
CiCi Enterprises, LP,
1080 W. Bethel Road
Coppell, Texas 75019
Attention: Lori Bolin, Compliance OfficerPirector of Legal
Affairs
Facsimile: (972) 745-4204
Notices to Developer and
the Controlling Principals:
Attention:.
Facsimile:
B.
Entire Agreement This Agreement, the documents refened to herein and the
Attachments hereto, constitute the entire, full and complete agreement between Franchisor and
Developer and the Controlling Principals conceming the subject matter hereof and shall supersede all
prior related agreements between Franchisor and Developer and the Controlling Principals; provided,
however, that nothing in this or any related agreement is intended to disclaim the representations made
by Franchisor in the franchise disclosure document that it fumished to Developer. Except for those
permitted to be made unilaterally by Franchisor hereunder, no amendment, change or variance from this
Agreement shall be binding on either party unless mutually agreed to by the parties and executed by their
authorized officers or agents in writing.
C.
No Waiver. No delay, waiver, omission or forbearance on the part of Franchisor to
exercise any right, option, duty or power arising out of any breach or default by Developer or the
Controlling Principals under this Agreement shall constitute a waiver by Franchisor to enforce any such
right, option, duty or power against Developer or the Controlling Principals, or as to a subsequent breach
or default by Developer or the Controlling Principals. Acceptance by Franchisor of any payments due to
it hereunder subsequent to the time at which such payments are due shall not be deemed to be a waiver
by Franchisor of any preceding breach by Developer or the Controlling Principals of any terms,
provisions, covenants or conditions of this Agreement.
D.
Procedure for Approval or Consent. Whenever this Agreement requires the prior
approval or consent of Franchisor, Developer shall make a timely written request to Franchisor and such
approval or consent shall be obtained in writing.
E.
No Implied Wananties. Franchisor makes no wananties or guarantees upon which
Developer may rely and assumes no liability or obligation to Developer or any third party to which it
would not otherwise be subject, by providing any waiver, approval, advice, consent or suggestion to
Developer in connection with this Agreement, or by reason of any neglect, delay or denial of any request
therefor.
F.
Force Majeure. If a Force Majeure event shall occur, then Developer shall continue to
be obligated to pay to Franchisor any and all amounts that it shall have duly become obligated to pay in
accordance with the terms of this Agreement prior to the occunence of any Force Majeure event and the
Indemnitees shall continue to be indemnified and held harmless by Developer in accordance with Section
XI. Except as provided in the immediately preceding sentence herein, none of the parties hereto shall be
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held liable for a failure to comply with any terms and conditions of this Agreement when such failure is
caused by an event of Force Majeure. Upon the occunence of and event of the type referred to herein,
the party affected thereby shall give prompt notice thereof to the other parties, together with a description
of the event, the duration for which the party expects its ability to comply with the provisions of the
Agreement to be affected thereby and a plan for resuming operation under the Agreement, which the
party shall promptly undertake and maintain with due diligence. Such affected party shall be liable for
failure to give timely notice only to the extent of damage actually caused.
G.
MEDIATION. DEVELOPER AND THE CONTROLLING PRINCIPALS AND
FRANCHISOR AGREE TO SUBMIT ANY CLAIM, CONTROVERSY OR DISPUTE ARISING
OUT OF OR RELATING TO THIS AGREEMENT (AND ATTACHMENTS) OR THE
RELATIONSHIP CREATED BY THIS AGREEMENT TO NON-BINDING MEDIATION
PRIOR TO BRINGING SUCH CLAIM, CONTROVERSY OR DISPUTE IN A COURT OR
BEFORE ANY OTHER TRIBUNAL. THE MEDIATION SHALL BE CONDUCTED THROUGH
EITHER AN EVDIVIDUAL MEDIATOR OR A MEDIATOR APPOIIVTED BY A MEDIATION
SERVICES ORGANIZATION OR BODY, EXPERIENCED IN THE MEDIATION OF FOOD
SERVICE BUSINESS DISPUTES, AGREED UPON BY THE PARTIES TO THE MEDIATION
AND, FAILING SUCH AGREEMENT WITHIN A REASONABLE PERIOD OF TIME AFTER
ANY PARTY HAS NOTIFIED THE OTHER(S) OF ITS DESIRE TO SEEK MEDIATION OF
ANY CLAIM, CONTROVERSY OR DISPUTE (NOT TO EXCEED FIFTEEN (15) DAYS), BY
THE AMERICAN ARBITRATION ASSOCIATION IN ACCORDANCE WITH ITS RULES
GOVERNING MEDIATION, AT FRANCHISOR'S CORPORATE HEADQUARTERS. THE
COSTS AND EXPENSES OF MEDIATION, INCLUDING COMPENSATION AND EXPENSES
OF THE MEDIATOR (AND EXCEPT FOR THE ATTORNEYS FEES INCURRED BY ANY
PARTY), SHALL BE BORNE BY THE PARTIES EQUALLY. IF THE PARTIES TO THE
MEDIATION ARE UNABLE TO RESOLVE THE CLAIM, CONTROVERSY OR DISPUTE
WITHIN NINETY (90) DAYS AFTER THE MEDIATOR HAS BEEN CHOSEN, THEN ANY
PARTY MAY BRING A LEGAL PROCEEDING UNDER SECTION XII.H. BELOW TO
RESOLVE SUCH CLAIM, CONTROVERSY OR DISPUTE UNLESS SUCH TIME PERIOD IS
EXTENDED BY WRITTEN AGREEMENT OF THE PARTIES. NOTWITHSTANDING THE
FOREGOING, FRANCHISOR MAY BRING AN ACTION (1) FOR MONIES OWED, (2) FOR
INJUNCTIVE OR OTHER EXTRAORDINARY RELIEF, OR (3) INVOLVING THE
POSSESSION OR DISPOSITION OF OR OTHER RELIEF RELATING TO REAL PROPERTY
IN A COURT HAVING JURISDICTION AND IN ACCORDANCE WITH SECTION XII.H.
BELOW, WITHOUT FIRST SUBMITTING SUCH ACTION TO MEDIATION.
H,
JURISDICTION AND VENUE: GOVERNING LAW. WITH RESPECT TO ANY
CLAIMS, CONTROVERSIES OR DISPUTES WHICH ARE NOT FINALLY RESOLVED
THROUGH MEDIATION OR AS OTHERWISE PROVIDED ABOVE, DEVELOPER AND THE
CONTROLLING PRINCIPALS HEREBY IRREVOCABLY SUBMIT THEMSELVES TO THE
JtfRISDICTION OF THE STATE AND FEDERAL DISTRICT COURTS LOCATED IN THE
STATE, COUNTY OR JUDICIAL DISTRICT IN WHICH THE FRANCHISOR'S PRINCIPAL
PLACE OF BUSINESS IS LOCATED. DEVELOPER AND THE CONTROLLING PRINCIPALS
HEREBY WAIVE A L L QUESTIONS OF PERSONAL JURISDICTION FOR THE PURPOSE
OF CARRYING OUT THIS PROVISION AND AGREE THAT ANY LITIGATION RELATING
TO OR ARISING OUT OF THIS AGREEMENT OR THE RELATIONSHIP CREATED BY
THIS AGREEMENT SHALL TAKE PLACE IN THE STATE OF TEXAS. DEVELOPER AND
THE CONTROLLING PRINCIPALS HEREBY AGREE THAT SERVICE OF PROCESS MAY
BE MADE UPON ANY OF THEM BY ANY MEANS ALLOWED BY TEXAS OR FEDERAL
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LAW. DEVELOPER AND THE CONTROLLING PRINCIPALS FURTHER AGREE THAT
VENUE FOR ANY PROCEEDING RELATING TO OR ARISING OUT OF THIS AGREEMENT
SHALL B E THE COUNTY OR JTOICIAL DISTRICT IN WHICH THE FRANCHISOR'S
PRINCIPAL PLACE OF BUSINESS IS LOCATED; NOTWITHSTANDING THE FOREGOING,
THE FRANCHISOR SHALL HAVE THE RIGHT AND OPTION TO BRING ANY ACTION (1)
FOR MONIES OWED, (2) FOR INJUNCTIVE OR OTHER EXTRAORDINARY R E L I E F OR (3)
INVOLVING POSSESSION OR DISPOSITION OF, OR OTHER R E L I E F RELATING TO,
REAL PROPERTY, IN ANY STATE OR FEDERAL DISTRICT COURT WHICH WOULD
ALSO HAVE JURISDICTION IN THE ABSENCE OF THIS PROVISION OR WHICH
DEVELOPER DEEMS APPROPRIATE TO OBTAIN THE R E L I E F SOUGHT.
WITH
RESPECT TO A L L CLAIMS, CONTROVERSIES, DISPUTES OR ACTIONS, THIS
AGREEMENT SHALL BE INTERPRETED AND CONSTRUED UNDER TEXAS LAW
(EXCEPT FOR TEXAS CHOICE OF LAW RULES).
I.
PARTIES' AGREEMENT REGARDING GOVERNING LAW AND FORUM.
DEVELOPER, THE CONTROLLING PRINCIPALS AND FRANCHISOR ACKNOWLEDGE
THAT THE PARTIES' AGREEMENT REGARDING APPLICABLE STATE LAW AND
FORUM SET FORTH IN SECTION XILH. ABOVE PROVIDE EACH OF THE PARTIES WITH
THE MUTUAL BENEFIT OF UNIFORM INTERPRETATION OF THIS AGREEMENT AND
ANY DISPUTE ARISING OUT OF THIS AGREEMENT OR THE PARTIES' RELATIONSHIP
CREATED BY THIS AGREEMENT. EACH O F DEVELOPER, THE CONTROLLING
PRINCIPALS AND FRANCHISOR FURTHER ACKNOWLEDGES THE RECEIPT AND
SUFFICIENCY OF MUTUAL CONSIDERATION FOR SUCH BENEFIT,
J.
EXECUTION AND ACCEPTANCE O F AGREEMENT. DEVELOPER, THE
CONTROLLING PRINCIPALS AND FRANCHISOR ACKNOWLEDGE THAT THE
EXECUTION OF THIS AGREEMENT AND ACCEPTANCE OF THE TERMS BY THE
PARTIES OCCURRED IN COPPELL, TEXAS, AND FURTHER ACKNOWLEDGE THAT THE
PERFORMANCE OF CERTAIN OBLIGATIONS O F DEVELOPER ARISING UNDER THIS
AGREEMENT, INCLUDING, BUT NOT LIMITED TO, THE PAYMENT OF MONIES DUE
HEREUNDER AND THE SATISFACTION OF CERTAIN TRAINING REQUIREMENTS OF
FRANCHISOR, SHALL OCCUR IN COPPELL, TEXAS.
K.
INTERNAL DISPUTE RESOLUTION PROGRAM. WITHOUT LIMITING ANY
OF T H E FOREGOING, FRANCHISOR RESERVES THE RIGHT, AT ANY TIME, TO
CREATE A DISPUTE RESOLUTION PROGRAM AND RELATED SPECIFICATIONS,
STANDARDS, PROCEDURES AND RULES FOR THE IMPLEMENTATION THEREOF TO BE
ADMINISTERED BY FRANCHISOR OR ITS DESIGNEES FOR THE BENEFTT OF A L L
DEVELOPERS AND/OR FRANCHISEES CONDUCTING BUSINESS UNDER THE SYSTEM.
THE STANDARDS, SPECIFICATIONS, PROCEDURES AND RULES FOR SUCH DISPUTE
RESOLUTION PROGRAM SHALL B E MADE PART OF THE MANUALS AND I F MADE
PART OF T H E MANUALS, ON EITHER A VOLUNTARY OR MANDATORY BASIS,
DEVELOPER SHALL COMPLY WTTH A L L SUCH STANDARDS, SPECIFICATIONS,
PROCEDURES AND RULES IN SEEKING RESOLUTION OF ANY CLAIMS,
CONTROVERSIES OR DISPUTES WITH OR INVOLVING FRANCHISOR OR OTHER
DEVELOPERS OR FRANCHISEES, I F APPLICABLE UNDER THE PROGRAM. I F SUCH
DISPUTE RESOLUTION PROGRAM IS MADE MANDATORY, THEN DEVELOPER AND
FRANCHISOR AGREE TO SUBMIT ANY CLAIMS, CONTROVERSIES OR DISPUTES
ARISING OUT OF OR RELATING TO THIS AGREEMENT (AND ATTACHMENTS) OR THE
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RELATIONSHIP CREATED BY THIS AGREEMENT FOR RESOLUTION IN ACCORDANCE
WITH SUCH DISPUTE RESOLUTION PROGRAM PRIOR TO SEEKING RESOLUTION OF
SUCH CLAIMS, CONTROVERSIES OR DISPUTES IN THE MANNER DESCRIBED IN
SECTIONS XH.G.-L. (PROVTOED THAT T H E PROVISIONS OF SECTION XH.
CONCERNING FRANCHISOR'S RIGHT TO SEEK R E L I E F IN A COURT FOR CERTAIN
ACTIONS INCLUDING FOR INJUNCTIVE OR OTHER EXTRAORDINARY R E L I E F SHALL
NOT BE SUPERSEDED OR AFFECTED BY THIS SECTION XILK.) OR IF SUCH CLAIM,
CONTROVERSY OR DISPUTE RELATES TO ANOTHER DEVELOPER OR FRANCHISEE,
DEVELOPER AGREES TO PARTICIPATE IN THE PROGRAM AND SUBMIT ANY SUCH
CLAIMS, CONTROVERSIES OR DISPUTES IN ACCORDANCE WITH THE PROGRAM'S
STANDARDS, SPECIFICATIONS, PROCEDURES AND RULES, PRIOR TO SEEKING
RESOLUTION OF SUCH CLAIM BY ANY OTHER JUDICIAL OR L E G A L L Y AVAILABLE
MEANS.
L.
WAIVER OF DAMAGES: WAIVER OF JURY TRIAL.
(1)
DEVELOPER AND T H E CONTROLLING PRINCIPALS HEREBY
WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO OR CLAIM
OR ANY PUNITIVE, EXEMPLARY, INCIDENTAL, INDIRECT, SPECIAL, CONSEQUENTIAL
OR OTHER DAMAGES (INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS)
AGAINST FRANCHISOR, ITS AFFILIATES, AND THE OFFICERS, DIRECTORS,
SHAREHOLDERS,
PARTNERS,
AGENTS,
REPRESENTATIVES,
INDEPENDENT
CONTRACTORS, SERVANTS AND EMPLOYEES OF EACH OF THEM, IN THEIR
CORPORATE AND INDIVIDUAL CAPACITIES, ARISING OUT OF AIVY CAUSE
WHATSOEVER (WHETHER SUCH CAUSE BE BASED IN CONTRACT, NEGLIGENCE,
STRICT LIABILITY, OTHER TORT OR OTHERWISE) AND AGREE THAT IN THE EVENT
OF A DISPUTE, DEVELOPER AND THE CONTROLLING PRINCIPALS SHALL BE
LIMITED TO THE RECOVERY OF ANY ACTUAL DAMAGES SUSTAINED BY THEM. I F
ANY OTHER TERM OF THIS AGREEMENT IS FOUND OR DETERMINED TO BE
UNCONSCIONABLE OR UNENFORCEABLE FOR ANY REASON, T H E FOREGOING
PROVISIONS OF WAIVER BY AGREEMENT OF PUNITIVE, EXEMPLARY, INCIDENTAL,
INDIRECT, SPECIAL, CONSEQUENTIAL OR OTHER DAMAGES (INCLUDING, WITHOUT
LIMITATION, LOSS OF PROFITS) SHALL CONTINUE IN FULL FORCE AND EFFECT.
(2)
FRANCHISOR
AND
DEVELOPER
AND
DEVELOPER'S
CONTROLLING PRINCIPALS HEREBY FURTHER IRREVOCABLY WAIVE ANY RIGHT
TO A JURY TRIAL IN ANY ACTION ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER AGREEMENTS BETWEEN THEM OR TIIEIR RESPECTIVE
AFFILIATES.
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M.
JUDGMENT:
DISCRETION.
DEVELOPER, THE CONTROLLING
PRINCIPALS AND FRANCHISOR ACKNOWLEDGE THAT VARIOUS PROVISIONS OF
THIS AGREEMENT SPECIFY CERTAIN MATTERS THAT ARE WITHIN THE DISCRETION
OR JUDGMENT OF FRANCHISOR OR ARE OTHERWISE TO BE DETERMINED
UNILATERALLY BY FRANCHISOR. I F THE EXERCISE OF FRANCHISOR'S DISCRETION
OR JUDGMENT AS TO ANY SUCH MATTER IS SUBSEQUENTLY CHALLENGED, THE
PARTIES TO THIS AGREEMENT EXPRESSLY DIRECT THE TRIER OF FACT THAT
FRANCHISOR'S RELIANCE ON A BUSINESS REASON IN THE EXERCISE OF ITS
DISCRETION OR JUDGMENT IS TO BE VIEWED AS A REASONABLE AND PROPER
EXERCISE OF SUCH DISCRETION OR JUDGMENT, WITHOUT REGARD TO WHETHER
OTHER REASONS FOR ITS DECISION MAY EXIST AND WITHOUT REGARD TO
WHETHER THE TRIER OF FACT WOULD INDEPENDENTLY ACCORD THE SAME
WEIGHT TO THE BUSINESS REASON.
N.
Counterpart Execution. This Agreement may be executed in multiple counterparts, each
of which when so executed shall be an original, and all of which shall constitute one and the same
instrument.
O.
Headings. The captions used in connection with the sections and subsections of this
Agreement are inserted only for purpose of reference. Such captions shall not be deemed to govem,
limit, modify or in any other manner affect the scope, meaning or intent of the provisions of this
Agreement or any part thereof nor shall such captions otherwise be given any legal effect.
PSurvival. Any obligation of Developer or the Controlling Principals that contemplates
performance of such obligation after termination or expiration of this Agreement or the transfer of any
interest of Developer or the Controlling Principals therein, shall be deemed to survive such termination,
expiration or transfer.
Q.
Severability. Except as expressly provided to the contrary herein, each portion, section,
part, term and provision of this Agreement shall be considered severable; and if, for any reason, any
portion, section, part, term or provision is determined to be invalid and contrary to, or in conflict with,
any existing or future law or regulation by a court or agency having valid jurisdiction, this shall not
impair the operation of, or have any other effect upon, the other portions, sections, parts, terms or
provisions of this Agreement that may remain otherwise intelligible, and the latter shall continue to be
given full force and effect and bind the parties; the invalid portions, sections, parts, terms or provisions
shall be deemed not to be part of this Agreement; and there shall be automatically added such portion,
section, part, term or provision as similar as possible to that which was severed which shall be valid and
not contrary to or in conflict with any law or regulation.
R.
Gender. All references to the masculine, neuter or singular shall be construed to include
the masculine, feminine, neuter or plural, where applicable. Without limiting the obligations individually
undertaken by the Controlling Principals under this Agreement, all acknowledgments, promises,
covenants, agreements and obligations made or undertaken by Developer in this Agreement shall be
deemed, jointly and severally, undertaken by all of the Controlling Principals.
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S.
Remedies Cumulative. All rights and remedies of the parties to this Agreement shall be
cumulative and not altemafive, in addition to and not exclusive of any other rights or remedies which are
provided for herein or which may be available at law or in equity in case of any breach, failure or default
or threatened breach, failure or default of any term, provision or condition of this Agreement or any other
agreement between Developer or any of its affiliates and Franchisor or any of its affiliates. The rights
and remedies of the parties to this Agreement shall be continuing and shall not be exhausted by any one
or more uses thereof and may be exercised at any time or from time to time as often as may be expedient;
and any option or election to enforce any such right or remedy may be exercised or taken at any time and
from time to time. The expiration, earlier termination or exercise of Franchisor's rights pursuant to
Section VII. of this Agreement shall not discharge or release Developer or any of the Controlling
Principals from any liability or obligation then accrued, or any liability or obligation continuing beyond,
or arising out of, the expiration, the earlier termination or the exercise of such rights under this
Agreement. Additionally, in the event there is any dispute between the parties arising out of or relating
to this Agreement, Developer and the Controlling Principals shall pay all court costs and reasonable
attomeys' fees incuned by Franchisor in any such dispute.
T.
them below:
Definitions. As used in this Agreement, the following terms have the meanings given to
(1)
"Developer's Principals" shall include, collectively and individually.
Developer's spouse, i f Developer is an individual, all officers and directors of Developer (including the
officers and directors of any general partner of Developer) whom Franchisor designates as Developer's
Principals and all holders of an ovmership interest in Developer and in any entity directly or indirectly
controlling Developer, and any other person or entity controlling, controlled by or under common control
with Developer. The initial Developer's Principals shall be listed on Attachment B.
(2)
"Controlling Principals" shall include, collectively and individually, any
Developer's Principal who has been designated by Franchisor as a Controlling Principal. For the
purposes of this Agreement and the Attachments hereto, an "afflliate" of any entity means any entity that
is controlled by, controlling or under common control with such other entity.
(3)
"Development Manual" means Franchisor's manual describing (generally) the
procedures and parameters for the development of CiCi's Pizza Restaurants, as amended from time to
time by Franchisor and whether in written, machine readable, electronic or other form.
U.
No Third Party Beneficiary. Except as expressly provided to the contrary herein, nothing
in this Agreement is intended, nor shall be deemed, to confer upon any person or legal entity other than
Developer, Franchisor, and Franchisor's, officers, directors and personnel and such of Developer's and
Franchisor's respective successors and assigns as may be contemplated (and, as to Developer, authorized
by Section IX.), any rights or remedies under or as a result of this Agreement.
V.
Expenses. Except as otherwise expressly provided herein, any action or obligation that
Developer is required to undertake or may be required to undertake in this Agreement, or any acfion or
obligation that Franchisor performs on Developer's behalf in accordance with the terms of this
Agreement, shall be at Developer's sole expense. Developer agrees to pay or reimburse Franchisor for
any such expenses on demand.
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W.
Public Announcements. Developer agrees that Franchisor may use Developer's name
and otherwise identify Developer in any public announcement regarding the existence or nature of this
Development Agreement or any matters contemplated herein.
Xra.
ACKNOWLEDGMENTS
A.
Independent Investigation. Developer acknowledges that it has conducted an
independent investigation of the business venture contemplated by this Agreement and recognizes that
the success of this business venture involves substantial business risks and will largely depend upon the
ability of Developer. Franchisor expressly disclaims making, and Developer acknowledges that it has not
received or relied on, any wananty or guarantee, express or implied, as to the potential volume, profits or
success of the business venture contemplated by this Agreement.
B.
Consultation with Advisors. Developer acknowledges that Developer has received, read
and understands this Agreement and the related Attachments and agreements and that Franchisor has
afforded Developer sufficient time and opportunity to consult with advisors selected by Developer about
the potential benefits and risks of entering into this Agreement.
C.
FTC Rule Compliance. Developer acknowledges that it received a complete copy of the
disclosure required by the Trade Regulation Rule of the Federal Trade Commission entitled "Disclosure
Requirements and Prohibitions Conceming Franchising" and this Agreement and all related Attachments
and agreements at least fourteen (14) calendar days prior to the date on which this Agreement was
executed.
D.
Reliance on Franchisor. Developer acknowledges that Developer is relying solely on
Franchisor, and not on any affiliated entities or parent companies related to Franchisor, with regard to
Franchisor's financial and other obligations under this Agreement, and no employee or other person
speaking on behalf of, or otherwise represenfing, Franchisor has made any statement or promise to the
effect that Franchisor's afflliated entities or parent companies guarantee Franchisor's performance or
financially back Franchisor.
[Signatures
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed
by its duly authorized representative as of the date indicated below.
FRANCHISOR:
CICI ENTERPRISES, LP,
a Delaware limited partnership
By: CiCi GP, LLC, its General Partner
By:
Name:
Title:
.Date:
DEVELOPER:
By:.
Name:
Title: _
Date:
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CONTROLLING PRINCIPAL SIGNATURE PAGE
(GUARANTY AND ASSUMPTION AGREEMENT)
Franchisor and
("Developer") are entering into a Development Agreement, pursuant
to which Developer or one or more of its majority-owned subsidiaries (in each case, the "Subsidiary
Franchisee") will execute individual Franchise Agreements (each, a "Franchise Agreement") for CiCi's
Pizza Restaurants. This Guaranty is given by the undersigned (each, a "Guarantor") as of the
day of
^r^.2fi__, in order to induce Franchisor to accept Developer.
Each Guarantor is a "Controlling Principal" as described in Section XII.T. of the Development
Agreement Each Guarantor has read the terms and conditions of the Development Agreement and
acknowledges that the execution of this Guaranty and undertakings, and assumption of obligations set
forth herein are in partial consideration for, and a condition to, the Franchisor's grant of the development
rights set forth in the Development Agreement. This Guaranty applies to the Development Agreement
and each Franchise Agreement executed pursuant thereto.
Each Guarantor individually, jointly and severally, unconditionally and irrevocably guarantees to
Franchisor and its successors and assigns that all of Developer's obligations under the Development
Agreement and each Subsidiary Franchisee's obligations under each Franchise Agreement will be
punctually paid and performed. Upon default by the Developer or a Franchisee under the Development
Agreement or a Franchise Agreement, as applicable, or upon notice from Franchisor, each Guarantor
shall immediately make each payment and perform each obligation required of Developer under the
Development Agreement or Subsidiary Franchisee under the Franchise Agreement(s).
Without affecting the obligations of any of the Guarantors under this Guaranty, Franchisor may,
without notice to the Guarantors, waive, renew, extend, modify, amend or release any indebtedness or
obligation of Developer and/or any Subsidiary Franchisee(s) or settle, adjust or compromise any claims
that Franchisor may have against Developer and/or any Subsidiary Franchisee(s). Each Guarantor
waives all demands and notices of every kind with respect to the enforcement of this guaranty, including,
without limitation, notice of presentment, demand for payment or performance by Developer and/or
Franchisee(s), any default by Developer and/or Subsidiary Franchisee(s) or any Guarantor and any
release of any Guarantor or other security for this guaranty or the obligations of Developer and/or
Subsidiary Franchisee(s). Franchisor may pursue its rights against any of the Guarantors without first
exhausting its remedies against Developer or Subsidiary Franchisee(s) and without joining any other
Guarantor hereto and no delay on the part of Franchisor in the exercise of any right or remedy shall
operate as a waiver of such right or remedy, and no single or partial exercise by Franchisor of any right
or remedy shall preclude the further exercise of such right or remedy. Upon receipt by Franchisor of
notice of the death of any of the Guarantors, the estate of the deceased will be bound by the foregoing
guaranty, but only for defaults and obligations under the Development Agreement and the Franchise
Agreement(s) existing at the time of death, and in such event, the obligations of the remaining Guarantors
shall continue in full force and effect.
Each Guarantor individually, jointly and severally, makes all of the covenants, representations,
wananties and agreements of the Controlling Principals set forth in the Development Agreement and is
obligated to perform thereunder. Additionally, the individual designated as Managing Principal
individually, jointly and severally, makes all of the covenants, representations and agreements of
DALO 1 :U55858=3119485I.3
079684.0103
Controlling Principals' Guaranty and-Assumption Agreement—Page A ~
Developer and of the Managing Principal set forth in the Development Agreement and is obligated to
perform thereunder.
Franchisor may designate additional guarantors, and those guarantors will be required to execute
a counterpart of this guaranty.
The undertakings, agreements and assumption of obligations set forth herein shall survive the
termination or expiration of the Development Agreement and any Franchise Agreement and shall
continue in full force and effect until the expiration by their terms of Franchisee's obligations under the
last of the Franchise Agreements.
ALL DISPUTES INVOLVING A GUARANTOR (WHETHER OR NOT RELATED TO THE
GUARANTY SET FORTH HEREIN) SHALL BE RESOLVED AND ADJUDICATED IN
ACCORDANCE WITH THE APPLICABLE PROVISIONS OF THE DEVELOPMENT AGREEMENT
AS SET FORTH IN ARTICLE XIL, WHICH ARTICLE INCLUDES, AMONG OTHER THINGS, A
WAIVER OF TRIAL BY JURY AND A WAIVER TO THE EXTENT PERMITTED BY LAW OF
ANY RIGHT TO OR CLAIM OF ANY PUNITIVE, EXEMPLARY, INCIDENTAL, INDIRECT,
SPECIAL, CONSEQUENTIAL OR OTHER DAMAGES (INCLUDING LOSS OF PROFITS).
GUARANTORS
'Name:
Name:
' Denotes Developer's Managing Principal
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Consent-to Franchisor's-Purchase Option
Under Section VIII.E.5. of the Development Agreement, upon the death or permanent disability of
an individual Developer or the Managing Principal of an entity Developer, the Franchisor has an
option to purchase the interest of the individual Developer in the Development Agreement and the
business operated thereunder or the interest of the Managing Principal in tho Developer entity.
The Franchisor moy exercise this option at the price and on the terms set forth in Section VIII.E.5.,
and i f exercised, it extends to the interest of any other Principal of the Developer on the same
terms.
As a Principal or as the spouse of a Principal, you arc being asked to sign this consent to the option
described above and in Section Vin.E.5.
Signing this consent does not mean that you arc guarantying the Developer's performance under
the Development Agreement. It means that you consent to the provisions of Section VIII.E.5. of
the Development Agreement and agree that any Interest (as defined in Section VIII.E.5.) which
you own (or any interest in such an Interest, whether a community' property interest, joint
ownership interest, or otherwise) will be subject to the options described in said Section VIII.E.5.
Spouse of Principal or
Controlling Principal:
Principal or Controlling Principal:
Signature
Printed Name
Printed Name
Signature
Signature
Printed Nome
Printed Name
Signoturc
Printed Name
Printed Name ATTACHMENT A
CONFIDENTIALITY AGREEMENT AND ANCILLARY
COVENANTS NOT TO COMPETE
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Controlling Principals' Guaranty and Assumption-Agreement—Page-A - Pape 2
This Agreement is made and entered into this
day of
between CiCi Enterprises, LP, a Delaware limited partnership ("Franchisor"),
("Developer") and
("Covenantor").
, 20 .20.
RECITALS
WHEREAS, Franchisor has developed a system (the "System") for the development and
operation of restaurants under the name and mark CiCi's Pizza ("Restaurants"); and
WHEREAS, the System is identified by certain trade names, service marks, trademarks, logos,
emblems and indicia of origin, including, but not limited to, the mark "CiCi's Pizza" and such other trade
names, service marks, trademarks, logos, insignia, slogans, emblems, designs and commercial symbols as
Franchisor may develop in the future to identify for the public the source of services and products
marketed under such marks and under the System and representing the System's high standards of
quality, appearance and service and distinctive exterior and interior design, decor and color scheme and
fumishings ("Marks") and includes, without limitation, certain confidential or proprietary information,
trade secrets, knowledge or know-how conceming the methods of conducting the business contemplated
by the Development Agreement, including without limitation the methods of establishing and operating a
CiCi's Pizza restaurant and other information contained in the Manuals or otherwise disclosed in writing
("Confidential Information"); and
WHEREAS, the Marks and Confidential Information provide economic advantages to Franchisor
and to its developers and franchisees operating under the System and are not generally known to, and are
not readily ascertainable by proper means by. Franchisor's competitors who could obtain economic value
from knowledge and use of the Confidential Information; and
WHEREAS, Franchisor has taken and intends to take all reasonable steps to maintain the
confidenfiality and secrecy of the Confidential Information; and
WHEREAS, Franchisor has granted Developer the limited right to develop Restaurants using the
System, the Marks and the Confidential Information for the period defined in the development agreement
made and entered into on
, 20 ("Development Agreemenf), by and between
Franchisor and Developer; and
WHEREAS, Franchisor and Developer have agreed in the Development Agreement on the
importance to Franchisor and to Developer and other licensed users of the System of restricting the use,
access and dissemination of the Confidential Information; and
WHEREAS, it will be necessary for certain employees, agents, independent contractors, officers,
directors and interest holders of Developer, or any entity having an interest in Developer ("Covenantor")
to have access to and to use some or all of the Confidenfial Information in the management and operation
of Developer's business using the System; and
WHEREAS, Developer has agreed to obtain from those persons written agreements protecting
the Confidential Information and the System against unfair competition; and
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Controlling-Principals' Guaranty and Assumption-Agreement—Pogc A -
WHEREAS, Covenantor wishes to remain or wishes to become associated with or employed by
Developer; and
WHEREAS, Covenantor wishes and needs to receive and use the Confidential Information in the
course of his employment by or association with Developer in order to effectively perform his services
for Developer; and
WHEREAS, Covenantor acknowledges that receipt of and the right to use the Confidential
Information constitutes independent valuable consideration for the representations, promises and
covenants made by Covenantor herein;
NOW, THEREFORE, in consideration of the mutual covenants and obligations contained herein,
the parties agree as follows:
Confidentiality Agreement
1. Franchisor and/or Developer shall disclose to Covenantor some or all of the Confidential
Information relating to the System. All information and materials, including, without limitation, any
manuals, drawings, specifications, techniques and compilations of data which Franchisor provides to
Developer and/or Covenantor shall be deemed Confidential Information for the purposes of this
Agreement.
2. Covenantor shall receive the Confidential Information in confidence and shall, at all times,
maintain it in confidence, and use such Confidential Information only in the course of his employment or
association with Developer and then only in connection with the development and/or operation by
Developer of a Restaurant under a valid Franchise or Development Agreement with Franchisor .
3. Covenantor shall not at any time make copies of any documents or compilations containing
some or all ofthe Confidential Information without Franchisor's express written permission.
4. Covenantor shall not at any time disclose or permit the disclosure of the Confidential
Information except to other employees of Developer and only to the limited extent necessary to train or
assist other employees of Developer in the development or operation of a Restaurant using the System.
5. Covenantor shall sunender any material containing some or all of the Confidential
Information to Developer or Franchisor, upon request, or upon termination of employment by Developer,
or upon conclusion of the use for which such information or material may have been fumished to
Covenantor and shall not retain any copies or extracts thereof in any form.
6. Covenantor shall not at any time, directly or indirectly, do any act or omit to do any act that
would or would likely be injurious or prejudicial to the goodwill associated with the Confidential
Information and the System.
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ControUing Principals' Guaranty and Assumption Agreement—Page-A-Page 4
7. All Manuals are loaned by Franchisor to Developer for limited purposes only and remain the
property of Franchisor and may not be reproduced, in whole or in part, without Franchisor's written
consent.
Covenants Not to Compete
In order to protect Franchisor's legitimate business interests, including, without limitation, the goodwill
associated with the System and the Marks, and the confidentiality and value of the Confidential
Information, and in consideration for the disclosure to Covenantor of the Confidential Information,
1.
During the term of Covenantor's employment by or association with Developer,
Covenantor agrees and covenants that Covenantor will not:
a.
Divert, or attempt to divert, directly or indirectly, any business, business
opportunity, or customer of the Restaurant to any competitor.
b.
Except with respect to facilities operated under valid Franchise Agreements with
Franchisor, directly or indirectly, for himself or through, on behalf of, or in conjunction with any person,
partnership, limited liability company or corporation, without the prior written consent of Franchisor,
own, maintain, operate, engage in, or have any financial or beneficial interest in (including any interest in
limited liability companies, corporations, partnerships, trusts, unincorporated associations or joint
ventures), advise, assist, aid, make loans to or otherwise support, any business located within the United
States, its tenitories or commonwealths, or any other country, province, state or geographic area in which
Franchisor has used, sought registration of or registered the Marks or the same or similar marks or
operates or licenses others to operate a business under the Marks or the same or similar marks, which
business (i) is of a character and concept similar to CiCi's brand food service facilities, including a
business which offers as a priman' menu item or mix of menu itcmsderives more than fifty percent
C50%^ of its revenue from selling pizza (including, but not limited to, fresh, frozen or unbaked pizza)and other Itolian foods using the distribution methods (including dine-in, carry-out or catering)
authorized by Franchisor, or (ii) functions as a commissary to sell or lease to or supply any such
business.
2.
For a continuous unintermpted period of one (1) year following the earlier of the
expiration, termination or transfer of all of Developer's interest in the Development Agreement or the
termination of Covenantor's association with or employment by Developer, Covenantor agrees and
covenants that Covenantor will not:
a.
Divert or attempt to divert, directly or indirectly, any business, business
opportunity or customer of the Restaurants developed in the Development Area to any competitor .
b.
Employ, or seek to employ, any person who is at the time or was within the
preceding sixty (60) days employed by Franchisor or any franchisee or developer of Franchisor, or
otherwise directly or indirectly induce such persons to leave that person's employment.
c.
Except with respect to facilities operated under valid Franchise Agreements with
Franchisor, directly or indirectly, for himself or through, on behalf of or in conjuncfion with any person,
DALO 1:11S5858J1I94851.3
079684.0103
Controlling Principals' Guaranty and Assumption-Agreement-
partnership, limited liability company, or corporation, own, maintain, operate, engage in, or have any
financial or beneficial interest in (including any interest in limited liability companies, corporations,
partnerships, limited liability companies, trusts, unincorporated associations or joint ventures), advise,
assist, aid, make loans to or otherwise support, any business that (i) is of n character and concept
similar to CiCi's brand food senice facilities^ including a business which offors us o primary menu
item or mix of menu itcmsderives more than fiftv percent r50%^ of its revenue from selling pizza
(including, but not limited to, fresh, frozen or unbaked pizza) and other Italian foods using the
distribution methods (including dine-in, carry-out or catering) authorized by Franchisor, or (ii) functions
as a commissary to sell or lease to or supply any such business and which is located, or is intended to be
located
(1)
at the approved location of any facility established pursuant to the
Development Agreement (as specified in each Franchise Agreement executed under the Development
Agreement); or
(2)
within the protected area of any facility established pursuant to the
Development Agreement ((as described in each Franchise Agreement executed under the Development
Agreement); or
(3)
within the Development Area; or
(4)
within a t^vcntvten (301fl) mile radius of (A) the approved location of
any facility established pursuant to the Development Agreement, or (B) the protected area of any facility
established pursuant to the Development Agreement, or (C) the Development Area, or (D) any CiCi's
brand food service facility in existence or under constmction as of the earlier of (x) the expiration or
termination of, or the transfer of all of Developer's interest in the Development Agreement; or (y) the
termination of Covenantor's association with or employment by Developer, as applicable.
Miscellaneous
1.
Developer shall make all commercially reasonable efforts to ensure that Covenantor
complies with this Agreement.
2.
Covenantor agrees that in the event of a breach of this Agreement, Franchisor would be
ineparably injured and be without an adequate remedy at law. Therefore, in the event of such a breach,
or threatened or attempted breach of any of the provisions hereof. Franchisor shall be entified to enforce
the provisions of this Agreement and shall be entitled, in addition to any other remedies which are made
available to it at law or in equity, including the right to terminate the Development Agreement or any
franchise agreement, to a temporary and/or permanent injunction and a decree for the specific
performance of the terms of this Agreement, without the necessity of showing actual or threatened harm
and without being required to fumish a bond or other security.
3.
Covenantor agrees to pay all expenses (including court costs and reasonable attomeys'
fees) incuned by Franchisor and Developer in enforcing this Agreement. Notwithstanding the foregoing,
Franchisor may recover its costs incuned in enforcing this Agreement from Developer without the
necessity of first making demand upon or bringing an action against Covenantor.
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la Is'-Guaranty and Assumption-Agreement—Paf^A - Pape 6
4.
Any failure by Franchisor or the Developer to object to or take action with respect to any
breach of any provision of this Agreement by Covenantor shall not operate or be constmed as a waiver of
or consent to that breach of any subsequent breach by Covenantor.
5.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT
REFERENCE TO TEXAS CHOICE OF LAW PRINCIPLES.
COVENANTOR HEREBY
IRREVOCABLY SUBMITS HIMSELF TO THE JURISDICTION OF THE STATE AND
FEDERAL DISTRICT COURTS LOCATED IN THE STATE, COUNTY OR JUDICIAL
DISTRICT IN WHICH THE FRANCHISOR'S PRINCIPAL PLACE OF BUSINESS IS
LOCATED.
COVENANTOR HEREBY WAIVES A L L QUESTIONS OF PERSONAL
JURISDICTION OR VENUE FOR THE PURPOSE OF CARRYING OUT THIS PROVISION.
COVENANTOR HEREBY AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON
H I M I N ANY PROCEEDING RELATING TO OR ARISING UNDER THIS AGREEMENT OR
THE RELATIONSHIP CREATED BY THIS AGREEMENT BY ANY MEANS ALLOWED BY
TEXAS OR FEDERAL LAW. COVENANTOR FURTHER AGREES THAT VENUE FOR ANY
PROCEEDING RELATING TO OR ARISING OUT OF THIS AGREEMENT SHALL BE THE
COUNTY OR JUDICIAL DISTRICT IN WHICH THE FRANCHISOR'S PRINCIPAL PLACE
OF BUSINESS IS LOCATED; PROVIDED, HOWEVER, WITH RESPECT TO ANY ACTION
WHICH INCLUDES INJUNCTIVE RELIEF OR OTHER EXTRAORDINARY RELIEF,
FRANCHISOR OR DEVELOPER MAY BRING SUCH ACTION IN ANY COURT IN ANY
STATE WHICH HAS JURISDICTION.
6.
The parties acknowledge and agree that each of the covenants contained herein are
reasonably limitations as to time, geographical area, and scope of activity to be restrained and do not
impose a greater restraint than is necessary to protect the goodwill or other business interests of
Franchisor. The parties agree that each of the foregoing covenants shall be construed as independent of
any other covenant or provision of this Agreement. If all or any portion of a covenant in this Agreement
is held unreasonable or unenforceable by a court or agency having valid jurisdiction in any unappealed
final decision to which Franchisor is a party. Covenantor expressly agrees to be bound by any lesser
covenant subsumed within the terms of such covenant that imposes the maximum duty permitted by law,
as if the resulting covenant were separately stated in and made a part of this Agreement.
7.
This Agreement contains the entire agreement of the parties regarding the subject matter
hereof This Agreement may be modified only by a duly authorized writing executed by all parties.
8.
All notices and demands required to be given hereunder shall be in writing and shall be
personally delivered or mailed by expedited delivery service or certified or registered mail, retum receipt
requested,first-classpostage prepaid, facsimile or electronic mail (provided that the sender confirms the
facsimile or electronic mail by sending an original confirmation copy by expedited delivery service or
certified or registered mail within three (3) business days after transmission), to the respect parties at the
following addresses unless and until a different address has been designated by written notice to the other
parties.
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Controlling Principals' Guaranty ond Assumption Agreement—Page A -
If directed to Franchisor, the notice shall be addressed to:
CiCi Enterprises, L.P.
1080 W. Bethel Road
Coppell, Texas 75019
Attenfion: Lori Bolin, Comnlionoc OfficerDirector of Legal Affairs
Facsimile: (972) 745-4204
If directed to Developer, the notice shall be addressed to:
Attention:,
Facsimile:
If directed to Covenantor, the notice shall be addressed to:
Attention:,
Facsimile:
9.
Any notice shall be deemed to have been given at the time of personal delivery or, in the
case of expedited delivery service on the next business day, or, in the case of registered or certified mail,
three (3) business days after the date and time of mailing, or, in the case of facsimile or electronic mail,
upon transmission (provided confirmation is sent by expedited delivery service or registered or certified
mail as provided above). Any change in the foregoing addresses shall be effected by giving fifteen (15)
days written notice of such change to the other parties.
10.
The rights and remedies of Franchisor under this Agreement are fully assignable and
transferable and shall insure to the benefit of its respective affiliates, successors and assigns. The
respective obligations of Developer and Covenantor hereunder may not be assigned by Developer or
Covenantor, without the prior written consent of Franchisor.
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Controlling Principals'Guaranty and Assumption Agreement—Pafc-A - Page 8
IN WITNESS WHEREOF, the undersigned have entered into this Agreement as witnessed by
their signatures below.
FRANCHISOR:
CiCi Enterprises, LP,
a Delaware limited partnership
By: CiCi GP, LLC, its General Partner
By: Name:,
Tifie:_
Date:
DEVELOPER:
By:.
Name:.
Title:_
Date:
COVENANTOR:
By:.
Name:.
Title:_
Date;
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i'- Guaranty and-Assumption Agreement—Page-A-Page 9
ATTACHMENT B
STATEMENT OF OWNERSHIP INTERESTS AND DEVELOPER'S PRINCIPALS
A.
The following is a list of shareholders, partners, members or other investors in Developer
(including all those who own or hold a direct or indirect interest in Developer) and a description
of the nature of their interest:
• Name
B.
Nature of Interest
Percentage of
Ownership
The following is a list of all Developer's Principals described in and designated pursuant to
Section XII.S. of the Development Agreement, each of whom shall (unless executing a
Controlling Principal guaranty) execute the Confidentiality Agreement and Ancillary Covenants
Not to Compete substantially in the form set forth in Attach,ment_A to the Development
Agreement:
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ATTACHMENT C
DESCRIPTION OF TERRITORY
[Describe Development Area and attach map]
Developer's Initials
*This Description of Development Area in no way amends, modifies or limits Franchisor's right to
approve or disapprove, in its sole discretion, any proposed site as set forth in Section VI.C. of this
Agreement.
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ATTACHMENT D
LEASE ADDENDUM
This Addendum is attached to and made a part of the Lease Agreement (the "Lease") dated
, 20
(the "Lease Execution Date") between
("Landlord") and
("Tenant") for space (the "Premises") described in the
Lease which is a part of the
Shopping Center (the "Shopping Center") in
,
. All capitalized terms shall have the same meanings as in the
Lease unless defined otherwise in this Addendum. If any of the terms of this Addendum conflict with
any ofthe terms of the Lease, the provisions of this Addendum shall prevail.
Requirements of Franchisor.
(a)
Landlord acknowledges that Tenant is a franchisee of Franchisor (as defined
below), and that the restaurant, which includes ancillary use of video games and vending machines,
located at the Premises ("Restaurant") is operated under the CiCi's Pizza franchise system, pursuant to a
franchise agreement ("Franchise Agreement") between Tenant and Franchisor. Landlord consents to
Tenant's use at the Premises of such marks and signs, decor items, trade dress, color schemes, fonts,
logos and related components of the CiCi's Pizza system and interior finish out, fumiture, fixtures and
equipment, as Franchisor may prescribe for the Restaurant. During the term of the Franchise Agreement,
the Premises may be used only to operate the Restaurant. The term "Franchisor" refers to CiCi
Enterprises, L.P., or any of its related entities, afflliates, subsidiaries, parents, surviving entities from any
merger or acquisition, successors or assigns.
Landlord and Tenant agree that to the extent permitted under applicable law. Franchisor
is a third party beneficiary of all of the rights and privileges set forth in this Addendum, and it is intended
by Landlord and Tenant that Franchisor will be entitled to enforce this Addendum. Landlord and Tenant
further agree that Franchisor is not liable for and does not assume any duties, obligations or liabilities
under this Addendum or the Lease unless agreed to in writing by Franchisor
(b)
Landlord agrees to furnish to Franchisor copies of all letters and notices sent to
Tenant pertaining to the Lease and the Premises at the same time that such letters and notices are sent to
Tenant. Without limiting the foregoing, i f Tenant defaults under the Lease, Landlord shall notify
Franchisor in wrifing of the default. If Tenant has failed to cure such default within the applicable cure
period. Landlord shall give Franchisor further written notice of such failure ("Franchisor Notice"). After
Franchisor receives the Franchisor Notice, Franchisor shall have the right (but not the obligation) to cure
Tenant's default within fifteen (15) days after Franchisor receives the Franchisor Notice. During such
fifteen (15) day period, Landlord agrees not to exercise any of Landlord's remedies arising from Tenant's
default, and such cure by Franchisor shall be accepted by Landlord. Except as set forth below, such cure
by Franchisor shall not be deemed to be an election to assume the Lease.
(c)
If Franchisor cures Tenant's default, or if Franchisor nofifies Landlord that the
Franchise Agreement has been terminated (which termination shall constitute a non-curable default under
the Lease when Landlord receives Franchisor's notice of the default). Landlord agrees, upon Franchisor's
written request, to assign to Franchisor all rights that Landlord may have under the Lease to remove and
DALO 1 :t455858^1194851.3
079684.0103
D- 1
evict Tenant from the Premises and shall cooperate with Franchisor to pursue such action to a
conclusion.
(d)
If Franchisor cures Tenant's default or notifies Landlord of the termination of the
Franchise Agreement, Franchisor shall have the right and option, upon written notice to Landlord, to do
the following:
1.
Perform the terms of the Lease on behalf of the Tenant (notwithstanding
any removal or eviction of Tenant) for a period not to exceed six (6) months from the first (1st) date of
any cure by Franchisor for which Franchisor shall remain liable, without assuming the Lease; or
2.
At any time within or at the conclusion of such six (6) month period,
assume the Lease for the remainder of the cunent term, together with the right to exercise any applicable
renewal options. In such event. Landlord and Franchisor shall enter into a commercially reasonable
agreement to document such assumption. Franchisor is not a party to the Lease and shall have no
liability under the Lease unless the Lease is assigned to, and assumed by, Franchisor as herein provided.
(e)
If, during the six (6) month period set forth in Section (1) (e)l above or at any
time after the assignment to and assumption of the Lease, by Franchisor contemplated in Section (1 )(e)2,
Franchisor shall notify Landlord that the franchise for the Restaurant is being granted to another CiCi's
Pizza franchisee, Landlord shall permit the assignment of the Lease to the franchisee, without any further
consent of Landlord being required as a condition thereto and without the payment of any fee or other
cost requirement. Thereafter, Franchisor shall be released from all further liabilities under the Lease.
The parties agree to execute any commercially reasonable documents in furtherance of this section.
(f)
Before the Franchise Agreement is terminated, Tenant will not assign the Lease,
sublease all or any portion of the Premises, or renew or extend the term thereof without the prior written
consent of Franchisor, nor shall Landlord and Tenant amend or otherwise modify the Lease in any
manner that could materially affect any of the terms, covenants and obligations of the Lease without the
prior written consent of Franchisor.
(g)
Following any default under the Lease or the Franchise Agreement or the
expiration or termination ofthe Lease or the Franchise Agreement, Franchisor, its employees, contractors
and agents shall have the right to enter the Premises to make any modification or alteration necessary to
protect the CiCi's Pizza system signs, marks and intellectual property rights or to cure any default under
the Franchise Agreement or under the Lease, without being guilty of trespass or any other crime or tort.
This right shall include the right to remove exterior signs and awnings from the Premises and any
Shopping Center pylon or monument sign provided Franchisor shall patch the fascia at its sole expense.
Franchisor's rights shail also include the right to de-idenfify the Premises as a Restaurant, which may
include removing interior signs, decor items and materials displaying any marks, designs or logos owned
by Franchisor and removing all other items idenfifying the Premises as a CiCi's Restaurant and to make
such other modifications (such as repainting) as are reasonably necessary to protect the CiCi's Pizza
system signs marks and intellectual property rights. Landlord will cooperate with and assist Franchisor in
gaining access to the Premises. If applicable law prohibits Landlord from allowing Franchisor to remove
Tenant's exterior and pylon signage, Landlord agrees upon written request from Franchisor to remove the
exterior and pylon signage and store them inside of the Premises. Similarly if Tenant's lender claims a
security interest in Tenant's signs, fumiture, fixtures or equipment Landlord shall nevertheless allow
DALO 1:1155858.311948513
079684.0103
D- 2
Franchisor to remove Tenant's exterior and pylon signage and sequester the signs, service items,
fumiture, fixtures or equipment within the Premises outside the view of the general public for Tenant's
lender. Landlord shall not be responsible for any expenses or damages arising from any such action by
Franchisor. Tenant hereby releases, acquits and discharges Franchisor and Landlord, their respective
subsidiaries, affiliates, successors and assigns and the officers, directors, shareholders, partners,
employees, agents and representatives of each of them, from all claims, demands, accounts, actions and
causes of action, known or unknown, vested or contingent, which any of them may have, ever had, now
has, or may hereafter have by reason of any event, transaction or circumstance arising out of or relating
to the exercise of Franchisor's rights pursuant to the Addendum.
(h)
All notices sent pursuant to this Addendum shall be sent in the manner set forth
in the Lease, and delivery of such notices shall be effective as of the times provided for in the Lease. For
notices under the Lease, Franchisor's mailing address shall be 1080 W. Bethel Road, Coppell, Texas
75019; Attn: Real Estate Department, which address may be changed by written notice to Landlord in the
manner provided in the Lease.
Landlord wanants, represents and covenants to Tenant that presently, and during the term of the Lease:
(i)
No part of the Shopping Center shall be leased, sold or used for a bar, pool hall,
dance hall, theaters, bingo parlor or other place of gambling (whether legal or illegal) or a sexually
oriented business including, but not limited to, "romance boutiques", any so-called head shop, or adult
video store (excluding incidental videos sold or rented in a video store as a part of a general, family
oriented video store ).
(j)
An adjacent space to the Premises shall not be leased, sold or used for a
veterinary clinic, boarding/lodging of animals, pet shop, hair salon or nail parlor.
(k)
There are no restrictions, covenants or agreements or zoning regulations
(including pre-existing tenant exclusives and use restrictions) that would prevent the Tenant from selling
pizza, (or any other food item or beverage), operating a buffet style restaurant, operating video games or
using vending machines within the Premises.
If Landlord breaches any of the foregoing representations, warranties or covenants or any such
representations or wananties prove to be untme, then, in addition to any other remedy, Landlord agrees
to indemnify, save and hold Tenant harmless from any loss, cost, expense or damage (including
reasonable attomey's fees and court costs) that Tenant may incur through such breach by Landlord.
(I)
Landlord, on behalf of itself and its successors and assigns, agrees that
regardless of any designated Shopping Center business hours, Tenant shall have the right to operate the
Restaurant on such days and during such hours as are designated by Franchisor regardless of the typical
hours of the Shopping Center.
DALO 1:11S5858J1194851.3
079684.0103
D- 3
(m)
Relocation Clause. The Lease shall not contain any provision that would allow
the Landlord to relocate the Premises or the Tenant.
(n)
Radius Restriction: The Lease shall not contain a radius restriction.
(o)
Continuous Operations. The Lease shall not contain any provision that would
require Tenant to continuously operate.
DALO 1:11558S831194851.3
079684.0103
D- 4
ATTACHMENT E
ELECTRONIC FUNDS TRANSFER
AUTHORIZATION TO HONOR CHARGES DRAWN BY AND PAYABLE TO
CICI ENTERPRISES, LP/PAYEE
BANK NAME
ACCOUNT #
ABA#
FEIN
JMC RESTAURANT DISTRIBUTION, LP/PAYEE
BANK NAME
ACCOUNT #
ABA#
FEIN
The undersigned Depositor hereby authorizes and requests the Depository designated below to honor
and to charge to the following designated account, checks, and electronic debits (collectively, "debits")
drawn on such account which are payable to either or both of the above named Payees. It is agreed that
Depository's rights with respect to each such debit shall be the same as i f it were a check drawn and
signed by the Depositor. It is further agreed that if any such debit is not honored, whether with or without
cause and whether intentionally or inadvertently, Depository shall be under no liability whatsoever. This
authorization shall continue in force until Depository and Payee have received at least thirty (30) days
written notification from Depositor of its termination.
The Depositor agrees with respect to any action taken pursuant to the above authorization:
(1) To indemnify the Depository and hold it harmless from any loss it may suffer resulting from or in
connection with any debit, including, without limitation, execution and issuance of any check, draft or
order, whether or not genuine, purporting to be authorized or executed by the Payee and received by the
Depository in the regular course of business for the purpose of payment, including any costs or expenses
reasonably incurred in connection therewith.
(2) To indemnify Payee and the Depository for any loss arising in the event that any such debit shall be
dishonored, whether with or without cause and whether intentionally or inadvertently.
(3) To defend at Depositor's own cost and expense any action which might be brought by a depositor or
any other persons because of any actions taken by the Depository or Payee pursuant to the foregoing
request and authorization, or in any manner arising by reason ofthe Depository's or Payee's participation
therein.
Name of Depository:.
Name of Depositor: _
DALOl :j4-55858^1194851.3
079684.0103
E- 1
Designated Bank Acct.:
(Please attach one voided check for the above account.)
For information call:
Address:
Phone #:
Fax#:
Name of Developer/Depositor (please print)
By:
Signature and Title of Authorized Representative
Date:
DALOl :«558Sfc3miS5La
079684.0103
E- 2
AMENDMENT TO CICI ENTERPRISES, LP
DEVELOPMENT AGREEMENT
FOR THE STATE OF CALIFORNIA
The CiCi Enterprises, Inc. Development Agreement between
("Developer" or
"You") and CiCi Enterprises, Inc. (the "Company") dated
(the "Agreement") shall be
amended by the addition of the following language, which shall be considered an integral part of the
Agreement (the "Amendment"):
CALIFORNIA LAW MODIFICATIONS
1.
The Califomia Department of Corporations requires that certain provisions contained in
franchise documents be amended to be consistent with Califomia law, including the Califomia Franchise
Investment Law, CAL. CORP. CODE Secfion 31000 et seq., and the California Franchise Relafions Act,
CAL. BUS. & PROF. CODE Section 20000 et seq. To the extent that the Agreement contains provisions
that are inconsistent with the following, such provisions are hereby amended:
a.
California Business and Professions Code Sections 20000 through 20043 provide
rights to the franchisee conceming termination or non-renewal of a franchise. I f
the Agreement contains a provision that is inconsistent with the law, the law will
control.
b.
The .Agreement provides for termination upon bankmptcy. This provision may
not be enforceable under federal bankruptcy Iaw(l 1 U.S.C.A. Sec. 101 et seq.).
c.
The Agreement contains a covenant not to compete which extends beyond the
termination of the franchise. This provision may not be enforceable under
California law.
d.
The Agreement requires mediation through either an individual mediator or a
mediator appointed by a mediation services organization or body, experienced in
the mediation of food service business disputes, agreed upon by the parties. If no
agreement, mediation to be conducted by the American Arbitration Association
at Franchisor's corporate headquarters with the costs being bome equally by the
parties. Prospecfive franchisees are encouraged to consult private legal counsel
to determine the applicability of Califomia and federal laws (such as Business
and Professions Code Section 20040.5, Code of Civil Procedure Section 1281,
and the Federal Arbitration Act) to any provisions of a development agreement
restricting venue to a fomm outside the State of Califomia.
e.
The Agreement requires application of the laws of Texas This provision may not
be enforceable under Califomia law.
2.
Each provision of this Amendment shall be effective only to the extent that the
jurisdictional requirements of the Califomia law applicable to the provision are met independent of this
Amendment. This Amendment shall have no force or effect if such jurisdictional requirements are not
met.
DALOl: 1195363.1
079684.0103
IN WITNESS WHEREOF, the Developer on behalf of itself and its owners acknowledges that it
has read and understands the contents of this Amendment, that it has had the opportunity to obtain the
advice of counsel, and that it intends to comply with this Amendment and be bound thereby. The parties
have duly executed and delivered this Amendment to the Agreement on
, 20 .
FRANCHISOR:
CiCi Enterprises, LP,
a Delaware limited partnership
By: CiCi GP, LLC, its General Partner
By:.
Name:
Title: '
DEVELOPER:
By:.
Name:
Title:
DAL01:I195363.1
079684.0103
-2-
AMENDMENT TO CICI ENTERPRISES, LP
DEVELOPMENT AGREEMENT
FOR THE STATE OF ILLINOIS
The CiCi Enterprises, LP Development Agreement between
("Developer" or
"You") and CiCi Enterprises, LP (the "Company") dated
(the "Agreemenf) shall be
amended by the addition of the following language, which shall be considered an integral part of the
Agreement (the "Amendment"):
ILLINOIS LAW MODIFICATIONS
1.
The Illinois Attomey General's Office requires that certain provisions contained in
franchise documents be amended to be consistent with Illinois law, including the Franchise Disclosure
Act of 1987, 815 ILCS 705/1-44. To the extent that this Agreement contains provisions that are
inconsistent with the following, such provisions are hereby amended:
2.
a.
Illinois Franchise Disclosure Act paragraphs 705/19 and 705/20 providerightsto
You conceming nonrenewal and termination of this Agreement. If this
Agreement (or any exhibit or attachment to this Agreement) contains a provision
that is inconsistent with the Act, the Act will control.
b.
Any release of claims or acknowledgments of fact contained in the Agreement
(or any exhibit or attachment to this Agreement) that would negate or remove
from judicial review any statement, misrepresentation or action that would
violate the Act, or a rule or order under the Act shall be void and are hereby
deleted regarding claims under the Act.
c.
I f this Agreement (or any exhibit or attachment to this Agreement) requires
litigafion to be conducted in a fomm other than the State of Illinois, the
requirement is void regarding claims under the Illinois Franchise Disclosure Act.
d.
If this Agreement (or any exhibit or attachment to this Agreement) requires that it
be governed by a state's law, other than the State of Illinois, to the extent that
such law conflicts with the Illinois Franchise Disclosure Act, the Act will control.
Section VII.B.17. shall be deleted and replaced with the following:
17.
If Developer misuses or makes any unauthorized use of the Marks or otherwise
materially impairs the goodwill associated therewith or with the System or Franchisor's rights
therein and does not cure such default within seventy-two (72) hours following notice from
Franchisor;
DAL01:1195363.1
079684.0103
4.
Section XIII.C. should be deleted and replaced with the following:
C.
FTC Rule Compliance. Developer acknowledges that it received a complete
copy of this Agreement and all related Attachments and agreements at least seven (7) calendar
days prior to the date on which this Agreement was executed. Developer further acknowledges
that it has received the disclosure document required by the Trade Regulation Rule of the Federal
Trade Commission entitled "Disclosure Requirements and Prohibitions Concerning Franchising"
at least fourteen (14) calendar days prior to the date on which this Agreement was executed.
5.
Each provision of this Amendment shall be effective only to the extent that the
jurisdictional requirements of the Illinois Franchise Disclosure Act, with respect to each such provision,
are met independent of this Amendment. This Amendment shall have no force or effect if such
jurisdictional requirements are not met.
IN WITNESS WHEREOF, the Developer on behalf of itself and its owners acknowledges that it
has read and understands the contents of this Amendment, that it has had the opportunity to obtain the
advice of counsel, and that it intends to comply with this Amendment and be bound thereby. The parties
have duly executed and delivered this Amendment to the Agreement on
,
20 .
FRANCHISOR:
CiCi Enterprises, LP,
a Delaware limited partnership
By: CiCi GP, LLC, its General Partner
By:.
Name:
Tifie:
DEVELOPER:
By:.
Name:
Title:
DAL01:1195363.I
079684.0103
-2-
AMENDMENT TO CICI ENTERPRISES, LP
DEVELOPMENT AGREEMENT AND DEVELOPMENT MANAGEMENT AGREEMENT
F O R T H E S T A T E OF M A R Y L A N D
The CiCi Enterprises, LP Development Agreement between
("Developer") and CiCi Enterprises, LP (the "Franchisor") dated
(the "Agreement") shall
be amended by the addition of the following language, which shall be considered an integral part of the
Agreement (the "Amendment"):
MARYLAND LAW MODIFICATIONS
1.
The Maryland Securities Division requires that certain provisions contained in franchise
documents be amended to be consistent with Maryland law, including the Maryland Franchise
Registrafion and Disclosure Law, MD. CODE ANN., BUS. REG. §§ 14-201 to 14-233 (2004 Repl. Vol.).
To the extent that this Agreement contains provisions that are inconsistent with the following, such
provisions are hereby amended:
a.
Under the Maryland Franchise Registration and Disclosure Law ("Law"), the
general release required as a condition of renewal, sale, and/or
assignment/transfer does not apply to any liability under the Law.
Any provision in the Agreement that requires you to disclaim and/or
acknowledge the occunence or nonoccunence of any act that violates the Law as
a condition to purchase a franchise, is amended to exclude such representation.
Additionally, such representation will not act as a release, estoppel or waiver of
any liability incuned under the Law.
b.
Any requirement in the Development Agreement and (as applicable) the
Development Management Agreement that litigation be conducted in a forum
other than the State of Maryland shall not be interpreted to limit any rights
Developer may have under Section 14-216(c)(25) of the Maryland Franchise
Registration and Disclosure Law to bring suit in the State of Maryland.
c.
Any claims that Developer may have under the Maryland Franchise Registration
and Disclosure Law must be brought within 3 years after the grant of the
franchise.
2.
Each provision of this Amendment shall be effecfive only to the extent that the
jurisdictional requirements of the Maryland Franchise Registration and Disclosure Law, with respect to
each such provision, are met independent of this Amendment. This Amendment shall have no force or
effect if such jurisdictional requirements are not met.
DAL01:1195363.1
079684.0103
IN WITNESS WHEREOF, the Developer on behalf of itself and its owners acknowledges that it
has read and understands the contents of this Amendment, that it has had the opportunity to obtain the
advice of counsel, and that it intends to comply with this Amendment and be bound thereby. The parties
have duly executed and delivered this Amendment to die Agreement on
, 20 .
FRANCEUSOR:
CiCi Enterprises, LP,
a Delaware limited partnership
By: CiCi GP, LLC, its General Partner
By:.
Name:
Title: '
DEVELOPER:
By:.
Name:
Title:
DALOl:] 195363.1
079684.0103
-2-
AMENDMENT TO CICI ENTERPRISES, LP
DEVELOPMENT AGREEMENT AND FRANCHISE DISCLOSURE DOCUMENT
FOR THE STATE OF MINNESOTA
The CiCi Enterprises, LP Development Agreement between
("Developer" or "You") and CiCi Enterprises, LP ("Franchisor") dated
, 2 0 _ (the
"Agreement") shall be amended by the addition of the following language, which shall be considered an
integral part of the Agreement (the "Amendment"):
MINNESOTA LAW MODIFICATIONS
1.
The Commissioner of Commerce for the State of Minnesota requires that certain
provisions contained in franchise documents be amended to be consistent with Minnesota Franchise Act,
Minn. Stat. Section 80C.01 et seq., and of the Rules and Regulations promulgated under the Act
(collectively the "Franchise Act"). To the extent that the Agreement/and or disclosure document contains
provisions that are inconsistent with the following, such provisions are hereby amended:
a.
The Minnesota Department of Commerce requires that franchisors indemnify
Minnesota franchisees against liability to third parties resulting from claims by
third parties that the franchisee's use of the franchisor's proprietary marks
infringes trademark rights of the third party.
b.
Minn. Stat. Sec. 80C.I4, Subds. 3, 4., and 5 requires, except in certain specified
cases, that a franchisee be given 90 days notice of termination (with 60 days to
cure) and 180 days notice for non-renewal of the franchise agreement. If the
Agreement contains a provision that is inconsistent with the Franchise Act, the
provisions of the Agreement shall be superseded by the Act's requirements and
shall have no force or effect.
c.
If the Developer is required in the Agreement to execute a release of claims or to
acknowledge facts that would negate or remove from judicial review any
statement, misrepresentation or action that would violate the Franchise Act, such
release shall exclude claims arising under the Franchise Act, and such
acknowledgments shall be void with respect to claims under the Franchise Act.
d.
If the Agreement requires that it be govemed by the law of a State other than the
State of Minnesota or arbitration or mediation, those provisions shall not in any
way abrogate or reduce any rights of the Developer as provided for in the
Franchise Act, including the right to submit matters to the jurisdiction of the
courts of Minnesota.
2.
Minn. Stat. §80C.21 and Minn. Rule 2860.4400J prohibit us from requiring lifigation to
be conducted outside Minnesota. In addition, nothing in the disclosure document or agreement can
abrogate or reduce any of your rights as provided for in Minnesota Statutes, Chapter 80C, including your
rights to any procedure, fomm, or remedies provided for in that law.
DALOLl 195363.1
079684.0103
3.
The Agreement/and or disclosure document is hereby amended to delete all references to
Liquidated Damages (as defined) in violafion of Minnesota law; provided, that no such deletion shall
excuse the franchisee from liability for actual or other damages and the formula for Liquidated Damages
in the Agreement/and or disclosure document shall be admissible as evidence of actual damages.
4.
To the extent required by Minnesota Law, the Agreement/and or disclosure document is
amended to delete all references to a waiver of jury trial.
5.
All sections of the Agreement/and or disclosure document referencing Franchisor's right
to obtain injunctive relief are hereby amended to refer to Franchisor's right to seek to obtain.
6.
Each provision of this Agreement shall be effective only to the extent that the
jurisdictional requirements of the Minnesota law applicable to the provision are met independent of this
Amendment. This Amendment shall have no force or effect if such jurisdictional requirements are not
met.
IN WITNESS WHEREOF, the Developer on behalf of itself and its owners acknowledges that it
has read and understands the contents of this Amendment, that it has had the opportunity to obtain the
advice of counsel, and that it intends to comply with this Amendment and be bound thereby. The parties
have duly executed and delivered this Amendment on
, 20 .
FRANCHISOR:
CiCi Enterprises, LP,
a Delaware limited partnership
By: CiCi GP, LLC, its General Partner
By:.
Name:
Tifie: '
DEVELOPER:
By:.
Name:
Title:
DAL01:1195363.1
079684.0103
-2-
AMENDMENT TO CICI ENTERPRISES, LP
DEVELOPMENT AGREEMENT
FOR THE STATE OF NEW YORK
The CiCi Enterprises, LP Development Agreement between
("Developer" or
"You") and CiCi Enterprises, LP (the "Company") dated
(the "Agreement") shall be
amended by the addition of the following language, which shall be considered an integral part of the
Agreement (the "Amendment"):
NEW Y O R K L A W MODIFICATIONS
1.
The New York Department of Law requires that certain provisions contained in franchise
documents be amended to be consistent with New York law, including the General Business Law, Article 33,
Secfions 680 through 695 (1989). To the extent that the Agreement contains provisions that are inconsistent
with the following, such provisions are hereby amended:
a.
I f the Developer is required in the Agreement to execute a release of claims or to
acknowledge facts that would negate or remove from judicial review any statement,
misrepresentation or action that would violate the General Business Law, regulation,
mle or order under the Law, such release shall exclude claims arising under the New
York General Business Law, Article 33, Section 680 through 695 and the regulations
promulgated thereunder, and such acknowledgments shall be void. It is the intent of
this provision that non-waiver provisions of Sections 687.4 and 687.5 of the General
Business Law be satisfied.
b.
If the Agreement requires that it be governed by the law of a state, other than the
State of New York, the choice of law provision shall not be considered to waive any
rights conferred upon the Franchisee under the New York General Business Law,
Article 33, Sections 680 through 695.
2.
Each provision of this Amendment shall be efTective only to the extent that the jurisdictional
requirements of the New York General Business Law, with respect to each such provision, are met
independent of this Amendment. This Amendment shall have no force or effect if such jurisdictional
requirements are not met.
DAL01:I195363.1
079684.0103
IN WITNESS WHEREOF, the Developer on behalf of itself and its Owners acknowledge that it has
read and understands the contents of this Amendment, that it has had the opportunity to obtain the advice of
counsel, and that it intends to comply with this Amendment and be bound thereby. The parties have duly
executed and delivered this Amendment to the Agreement on
, 20 .
FRANCHISOR:
CiCi Enterprises, LP,
a Delaware limited partnership
By: CiCi GP, LLC, its General Partner
By:.
Name:
Title: "
DEVELOPER:
By:.
Name:
Tifie:
DALOLn95363.I
079684.0103
-2-
EXHIBIT B-1
CICI'S TO GO ADDENDUM TO THE DEVELOPMENT AGREEMENT
DALO 1:11S6051.91194789.3
079684.0103
CICI'S TO GO ADDENDUM
TO DEVELOPMENT AGREEMENT
This CiCi's To Go Addendum ("Addendum") to Development Agreement ("Agreement") is
made and entered into concurrently with the execution of the Development Agreement by and between
CiCi Enterprises, LP, a Delaware limited partnership ("Franchisor") and
("Developer").
RECITALS
The Agreement contemplates the grant of development rights with respect to restaurants featuring
an "All You'd Like To Eaf buffet and offering dine-in and carry-out pizza and other Italian foods and
related items operafing under the trademark and the trade name, "CiCi's".
Franchisor also offers development rights for CiCi's brand units designed for pizza pick-up and
catering, with limited dine-in or delivery capacity, which operate under the trade name and service mark,
"CiCi's To Go".
This Addendum amends the Agreement to establish the terms and conditions applicable to the
development of CiCi's To Go units.
NOW THEREFORE, the parties, in consideration of the mutual agreements set forth herein, the
receipt and sufficiency of which are hereby acknowledged, agree as follows:
1.
following:
Recitals. The first and third recitals of the Agreement are deleted and are replaced by the
"Franchisor, as the result of the expenditure of time, skill, effort and
money, has developed and owns a distinctive system (hereinafter
"System") relating to the establishment and operation of units offering
carry-out pizza and other Italian foods and related items ("CiCi's To Go
Units", "To Go Units" or "Units"). . . .
Franchisor identifies the System by means of certain trade names, service
marks, trademarks, logos, emblems and indicia of origin, including, but
not limited to, the marks "CiCi's" and "CiCi's To Go" and such other
trade names, service marks, trademarks, logos, emblems and indicia of
origin as are now designated, and may hereafter be designated by
Franchisor in writing, for use in connection with the System (hereinafter
refened to as "Marks")."
2.
Definitions and Conventions. All references in the Agreement (including the attachments
and exhibits thereto) to "CiCi's Pizza restauranf or "CiCi's Pizza restaurants" are hereby changed to
"CiCi's To Go Unif, "To Go Unit" or "CiCi's To Go Units", respectively, and all references to
"Restaurant" or "Restaurants" are hereby changed to "Unit" or "Units", respectively.
DAL01:1195366.1
079684.0103
3.
Retained Rights. Sections l.C. and l.D. are hereby deleted in their entirety and are
replaced by the following:
"C.
Tenitorial Protections.
Subject to Section l.D. and to
Developer's fiill compliance with this Agreement and any other
agreement between Developer or any of its afflliates and Franchisor or
any of its afflliates, neither Franchisor nor any affiliate shall establish, or
authorize any person or entity other than Developer to establish, a CiCi's
To Go Unit in the Tenitory during the term of this Agreement.
D.
Retained Rights. Developer expressly agrees that Franchisor and
its affiliates retain all other rights, including, without limitation, (i) the
right to establish and operate, and to grant others the right to establish
and operate, CiCi's To Go Units under the Marks at any location outside
the Tenitory including locations that are adjacent or proximate to the
Tenitory and in any Reserved Area (defined below) whether within or
outside the Tenitory, (ii) the right to establish and operate, and to grant
others the right to establish and operate, restaurants and other food
service facilities under other trade names, service marks and trademarks
at any location within or outside of the Tenitory, and (iii) the right within
and outside the Tenitory to offer and sell, and grant others the right to
offer and sell, any similar or dissimilar products and services, whether
identified by the Marks or by other trademarks, trade names or service
marks, through any channel or by any method of distribution other than a
CiCi's To Go Unit (including, without limitafion, by or through a CiCi's
Pizza Restaurant, the Intemet or similar electronic media), on any terms
and conditions Franchisor deems appropriate. A "Reserved Area" is any
enclosed area of retail sales establishments in excess of 250,000 square
feet, food courts, airports, hospitals, cafeterias, commissaries, schools,
hotels, office buildings and stadiums, arenas, ballparks, festivals, fairs,
military bases and other mass gathering locafions or events. Without
limiting the foregoing. Franchisor and its afflliates may, among other
things, offer and sell, and authorize others to offer and sell: (a) collateral
products, such as pre-packaged food products, T-shirts and other CiCi's
memorabilia, under the Marks at or from any location or through any
channel of distribution; (b) food and beverage services under the Marks
at or through any permanent, temporary or seasonal food service facility
or through any channel of distribution except a CiCi's To Go Unit
located within the Territory, which Units may provide in whole or in part
the products and services offered by a CiCi's To Go Units; and (c) any
products or services (including, without limitation, any food or beverage
services) under any other names and marks at any location or through
any channel of distribution."
4.
following:
Inifial Franchise Fee. Section II.B. is hereby deleted in its entirety and is replaced by the
"B.
Initial Franchise Fee. As consideration for the rights to be
granted to Developer under separate Franchise Agreements, Developer
shall pay to Franchisor an initial franchise fee. The initial franchise fee
DALOl:! 195366.1
079684.0103
. shall be fifteen thousand dollars ($15,000) for the first To Go Unit and
fifteen thousand dollars ($15,000) for each additional To Go Unit to be
opened under this Agreement. The pro rata portion of the development
fee that is allocable to each To Go Unit will be credited against the initial
franchise fee for that To Go Unit (the "development fee credit")."
5.
Site Selection. Anything in Section VI.C.2(b) to the contrary notwithstanding, no lease
shall be approved by Franchisor unless an addendum to the lease, containing covenants in substantially the
form of those in Exhibit A to this Addendum, is attached to the lease and incorporated therein.
6.
Confidentiality Agreement and Ancillary Covenants Not to Compete. The parties agree
that Attachment A to the Development Agreement shall be modified prior to execution as approved by
Franchisor solely for the purpose of changing all references to CiCi's Pizza Restaurants to CiCi's To Go
Units.
7.
Constmction. Capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in the Agreement. In the event of any confiict between the terms of this
Addendum and the terms of the Agreement, the terms of this Addendum shall control. Except as
expressly modified by this Addendum, the terms of the Agreement shall continue in full force and effect.
IN WITNESS WHEREOF, each of the parties hereto have caused this Addendum to be executed
by its duly authorized representative as of the date first above written.
FRANCHISOR:
CiCi Enterprises, LP,
a Delaware limited partnership
By: CiCi GP, LLC, its General Partner
By:.
Name:
Tifie:_
Date:
DEVELOPER:
By:.
Name:
Title:.
Date:
bAL0l:lI95366.I
079684.0103
EXHIBIT A
CICI'S TO GO UNIT LEASE ADDENDUM
This Addendum is attached to and made a part of the Lease Agreement (the "Lease") dated
, 20
(the "Lease Execution Date") between
("Landlord") and
('Tenant") for space (the "Premises") described in the
Lease which is a part of the
Shopping Center (the "Shopping Center") in
,
. All capitalized terms shall have the same meanings as in the Lease
unless defined otherwise in this Addendum. If any of the terms of this Addendum conflict with any of the
terms ofthe Lease, the provisions of this Addendum shall prevail.
Requirements of Franchisor.
(a)
Landlord acknowledges that Tenant is a franchisee of Franchisor (as defined
below), and that the CiCi's Pizza To Go restaurant, located at the Premises ("Restaurant") is operated
under the CiCi's Pizza franchise system, pursuant to a franchise agreement ("Franchise Agreemenf)
between Tenant and Franchisor. Landlord consents to Tenant's use at the Premises of such marks and
signs, decor items, trade dress, color schemes, fonts, logos and related components of the CiCi's Pizza
system and interior finish out, fumiture, fixtures and equipment, as Franchisor may prescribe for the
Restaurant. During the term of the Franchise Agreement, the Premises may be used only to operate the
Restaurant. The term "Franchisor" refers to CiCi Enterprises, L.P., or any of its related entities, affiliates,
subsidiaries, parents, surviving entities from any merger or acquisition, successors or assigns.
Landlord and Tenant agree that to the extent permitted under applicable law. Franchisor
is a third party beneficiary of all of the rights and privileges set forth in this Addendum, and it is intended
by Landlord and Tenant that Franchisor will be entitled to enforce this Addendum. Landlord and Tenant
further agree that Franchisor is not liable for and does not assume any duties, obligations or liabilities
under this Addendum or the Lease unless agreed to in writing by Franchisor
(b)
Landlord agrees to fumish to Franchisor copies of all letters and notices sent to
Tenant pertaining to the Lease and the Premises at the same time that such letters and notices are sent to
Tenant. Without limifing the foregoing, if Tenant defaults under the Lease, Landlord shall notify
Franchisor in writing of the default. If Tenant has failed to cure such default within the applicable cure
period, Landlord shall give Franchisor further written notice of such failure ('Tranchisor Notice"). After
Franchisor receives the Franchisor Notice, Franchisor shall have the right (but not the obligation) to cure
Tenant's default within fifteen (15) days after Franchisor receives the Franchisor Notice. During such
fifteen (15) day period. Landlord agrees not to exercise any of Landlord's remedies arising from Tenant's
default, and such cure by Franchisor shall be accepted by Landlord. Except as set forth below, such cure
by Franchisor shall not be deemed to be an election to assume the Lease.
(c)
I f Franchisor cures Tenant's default, or if Franchisor notifies Landlord that the
Franchise Agreement has been terminated (which termination shall constitute a non-curable default under
the Lease when Landlord receives Franchisor's notice of the default), Landlord agrees, upon Franchisor's
written request, to assign to Franchisor all rights that Landlord may have under the Lease to remove and
evict Tenant from the Premises and shall cooperate with Franchisor to pursue such action to a conclusion.
(d)
If Franchisor cures Tenant's default or notifies Landlord of the termination of the
Franchise Agreement, Franchisor shall have the right and option, upon written notice to Landlord, to do
the following:
DAL01:n95366.1
079684.0103
A-I
1.
Perform the terms of the Lease on behalf of the Tenant (notwithstanding
any removal or eviction of Tenant) for a period not to exceed six (6) months from the first (1st) date of
any cure by Franchisor for which Franchisor shall remain liable, without assuming the Lease; or
2.
At any time within or at the conclusion of such six (6) month period,
assume the Lease for the remainder of the cunent term, together with the right to exercise any applicable
renewal opfions. In such event. Landlord and Franchisor shall enter into a commercially reasonable
agreement to document such assumption. Franchisor is not a party to the Lease and shall have no liability
under the Lease unless the Lease is assigned to, and assumed by, Franchisor as herein provided.
(e)
If, during the six (6) month period set forth in Secfion (1) (e)l above or at any
time after the assignment to and assumption of the Lease, by Franchisor contemplated in Section (l)(e)2,
Franchisor shall notify Landlord that the franchise for the Restaurant is being granted to another CiCi's
Pizza franchisee. Landlord shall permit the assignment of the Lease to the franchisee, without any further
consent of Landlord being required as a condition thereto and without the payment of any fee or other
cost requirement. Thereafter, Franchisor shall be released fi-om all further liabilities under the Lease. The
parties agree to execute any commercially reasonable documents in furtherance of this section.
(f)
Before the Franchise Agreement is terminated. Tenant will not assign the Lease,
sublease all or any portion of the Premises, or renew or extend the term thereof without the prior written
consent of Franchisor, nor shall Landlord and Tenant amend or otherwise modify the Lease in any
manner that could materially affect any of the terms, covenants and obligafions of the Lease without the
prior written consent of Franchisor.
(g)
Following any default under the Lease or the Franchise Agreement or the
expiration or termination ofthe Lease or the Franchise Agreement, Franchisor, its employees, contractors
and agents shall have the right to enter the Premises to make any modification or alteration necessary to
protect the CiCi's Pizza system signs, marks and intellectual property rights or to cure any default under
the Franchise Agreement or under the Lease, without being guilty of trespass or any other crime or tort.
This right shall include the right to remove exterior signs and awnings from the Premises and any
Shopping Center pylon or monument sign provided Franchisor shall patch the fascia at its sole expense.
Franchisor's rights shall also include the right to de-idenfify the Premises as a Restaurant, which may
include removing interior signs, decor items and materials displaying any marks, designs or logos owned
by Franchisor and removing all other items identifying the Premises as a CiCi's Restaurant and to make
such other modifications (such as repainting) as are reasonably necessary to protect the CiCi's Pizza
system signs marks and intellectual property rights. Landlord will cooperate with and assist Franchisor in
gaining access to the Premises. If applicable law prohibits Landlord from allowing Franchisor to remove
Tenant's exterior and pylon signage. Landlord agrees upon written request from Franchisor to remove the
exterior and pylon signage and store them inside of the Premises. Similarly if Tenant's lender claims a
security interest in Tenant's signs, fumiture, fixtures or equipment Landlord shall nevertheless allow
Franchisor to remove Tenant's exterior and pylon signage and sequester the signs, service items,
furniture, fixtures or equipment within the Premises outside the view of the general public for Tenant's
lender. Landlord shall not be responsible for any expenses or damages arising from any such action by
Franchisor. Tenant hereby releases, acquits and discharges Franchisor and Landlord, their respective
subsidiaries, affiliates, successors and assigns and the officers, directors, shareholders, partners,
employees, agents and representatives of each of them, from all claims, demands, accounts, actions and
causes of acfion, known or unknown, vested or contingent, which any of them may have, ever had, now
has, or may hereafter have by reason of any event, transaction or circumstance arising out of or relating to
the exercise of Franchisor's rights pursuant to the Addendum.
DALOLI 195366.1
079684.0103
A-2
(h)
All notices sent pursuant to this Addendum shall be sent in the manner set forth
in the Lease, and delivery of such notices shall be effective as of the times provided for in the Lease. For
notices under the Lease, Franchisor's mailing address shall be 1080 W. Bethel Road, Coppell, Texas
75019; Attn: Real Estate Department, which address may be changed by written notice to Landlord in the
manner provided in the Lease.
Landlord wanants, represents and covenants to Tenant that presently, and during the term of the Lease:
(i)
No part of the Shopping Center shall be leased, sold or used for a bar, pool hall,
dance hall, theaters, bingo parlor or other place of gambling (whether legal or illegal) or a sexually
oriented business including, but not limited to, "romance boutiques", any so-called head shop, or adult
video store (excluding incidental videos sold or rented in a video store as a part of a general, family
oriented video store).
(j)
An adjacent space to the Premises shall not be leased, sold or used for a
veterinary clinic, boarding/lodging of animals, pet shop, hair salon or nail parlor.
(k)
There are no restrictions, covenants or agreements or zoning regulations
(including pre-exisfing tenant exclusives and use restrictions) that would prevent the Tenant from selling
pizza, (or any other food item or beverage), operating a buffet style restaurant, operating video games or
using vending machines within the Premises.
If Landlord breaches any of the foregoing representations, warranties or covenants or any such
representations or warranties prove to be untrue, then, in addition to any other remedy. Landlord agrees to
indemnify, save and hold Tenant harmless from any loss, cost, expense or damage (including reasonable
attomey's fees and court costs) that Tenant may incur through such breach by Landlord.
(I)
Landlord, on behalf of itself and its successors and assigns, agrees that regardless
ofany designated Shopping Center business hours. Tenant shall have the right to operate the Restaurant
on such days and during such hours as are designated by Franchisor regardless of the typical hours of the
Shopping Center.
(m)
Relocafion Clause. The Lease shall not contain any provision that would allow
the Landlord to relocate the Premises or the Tenant.
(n)
Radius Restricfion: The Lease shall not contain a radius restriction.
(o)
Continuous Operations. The Lease shall not contain any provision that would
require Tenant to continuously operate.
DAL01;I195366.1
079684.0103
A-3
EXHIBIT B-2
INCENTIVE PROGRAM AMENDMENTS TO DEVELOPMENT AGREEMENT
DALO 1:1156054.91194789.3
079684.0103
INCENTIVE PROGRAM
AMENDMENT TO DEVELOPMENT AGREEMENT
FOR NEW DEVELOPERS
This Incentive Program Amendment to Development Agreement For New Developers
("Amendmenf) is made and entered into this
day of
, 201120
(the "Effective Date") by
and between CiCi Enterprises, LP ("Franchisor") and
("Developer"). This Amendment
forms an integral part of the Development Agreement (hereinafter defined), being appended thereto and
fully incorporated therein.
RECITALS:
Franchisor has offered Qualified Developers (defined below) the opportunity to receive a
discounted franchise fee and royalty reduction ("Development Incentives," as further defined below)
under an incentive program ("Incentive Program") for new Restaurants to be established under Franchise
Agreements signed pursuant to a new CiCi's Pizza Development Agreement executed on or before
September 1, 20I4-21U2 for the development of 1-2 CiCi's Pizza Restaurants in a designated available
market, with Restaurant 1 to be opened and operating by September 1. 2012.2013. and Restaurant 2 to be
opened and operating by Sep tcm berJune 1, 301^2014 ("Qualifying Restaurants"). September 1,
2ftt22013 and ScptcmbcrJaas 1, 20442014 are refened to as the "Opening Deadline(s)".
Developer is a Qualified Developer and has been approved by Franchisor to participate in the
Incentive Program based on information provided to Franchisor by Developer.
AGREEMENT
NOW, THEREFORE, the parties, in consideration of the mutual undertakings and commitments
set forth herein, the receipt and sufficiency of which are acknowledged, agree as follows:
1.
Definitions. As used in this Amendment,
A.
A "Qualified Developer" is a'person or entity that (1) has been disclosed with
CiCi's Franchise Disclosure Document, dated March 25, 2011, as omcndcd June lOj 201126. 3012; (ii)
has been qualified financially and operationally and approved by Franchisor to participate in the
Incenfive Program; (iii) if an exisfing CiCi's Pizza developer or franchisee, is in Good Standing (defined
below); and (iv) has signed a Development Agreement on or before September 1, 204-12012 for the
establishment of 1-2 CiCi's Pizza Restaurants within a designated available market prior to the applicable
Opening Deadline.
B.
"Development Incentives" means, for each Qualifying Restaurant: (i) Qualified
Developer will receive a reduction in the initial Franchise Feefranchise fee to $20,000.00 for each
Oualifving Restaurant and, for each Qualifying Restaurant opened before December 30. 2012. a
refund of SIO.000.00 of the initial franchise fee paid for such Restaurant; and (ii) provided the
Qualifying Restaurant is opened and operating prior to its scheduled Opening Deadline ,as set forth in the
Development Schedule, the reduction of weekly royalty fees to 2% of Net Sales (as defined in the
Franchise Agreement) for such Qualifying Restaurant for a period beginning on the Opening Date (as
defined in the Franchise Agreement) until the first year anniversary of the Opening Date (the "Royalty
Fee Reduction"). The Franchise Agreement for each Qualifying Restaurant will be amended by a
Franchise Agreement Amendment in the form attached as Exhibit A hereto, evidencing the reduced
initial Franchise Fee and Royalty Fee Reduction. Following the one year Royalty Fee Reduction period
described above, weekly royalty fees paid in respect of the Qualifying Restaurant shall be calculated at
DAL01:1169253.11195368.1
079684.0103
the standard rates set forth in the Franchise Agreement without regard to the Franchise Agreement
Amendment.
C. "Good Standing" means that Developer is not in default of any provision of the
Development Agreement (including, without limitation, the Development Schedule), or any amendment
thereof or successor thereto; that Developer and its subsidiaries and affiliates (if any) are not in default of
any Franchise Agreement or other agreement with Franchisor or its afflliates; that Developer has
substantially and timely complied with all the terms and conditions of the Development Agreement and
that Developer and its subsidiaries and affiliates (if any) have timely complied with all the terms and
conditions of all Franchise Agreements and other agreements between them and Franchisor or its
afflliates, including the timely satisfaction of all monetary obligations owed to Franchisor or its affiliates.
2.
Representations of Franchisor. Franchisor represents that it has approved Developer as
financially and operationally qualified to enter into the Development Agreement under the Incentive
Program based on the information provided by Developer. Nothing set forth herein shall be deemed a
waiver of Franchisor's right to determine Developer's financial, operational and legal qualification each
time Developer applies for a franchise to operate a Restaurant under Section III.A.2. of the Development
Agreement.
3.
Representations of Developer. Developer represents that (i) it has been disclosed with
Franchisor's Franchise Disclosure Document dated March 25. 2011. as amended June 10. 201126.
2012; (ii) the information it has provided to Franchisor in its application and for purposes of the
Incentive Program was true and correct when provided and is true and correct as of the Effective Date of
this Amendment; (iii) based on such information, it has been operationally and financially approved by
Franchisor to participate in the Incentive Program; (iv) and if it is an existing CiCi's Pizza developer or
franchisee, it is in Good Standing and has no knowledge of any event which, with the giving of notice or
the passage of time, would result in Developer's failure to maintain Good Standing; and (v)
contemporaneously with the execution of this Amendment, it has signed a Development Agreement on or
before September 1, 3W4-1B12 for the establishment of 1-2 CiCi's Pizza Restaurants within a designated
available market by the applicable Opening Deadlines. Developer agrees that the representations set
forth herein are continuing and shall remain tme in all material respects as of and following the Effective
Date of this Amendment.
4.
Development Incentives.
A.
Anything in Section II.B. of the Development Agreement to the contrary
notwithstanding. Franchisor agrees to reduce the initial Franchise Fee to $20,000.00 for each Qualified
Restaurant, such fee to be paid by Developer as set forth in each Franchise Agreement.
B.
Anything in Section III.A. 1. or elsewhere in the Development Agreement to the
contrary notwithstanding, each Franchise Agreement for a Qualifying Restaurant will be amended by an
amendment to the Franchise Agreement for such Restaurant, the form of which is artached hereto as
Exhibit A, evidencing the reduced initial Franchise Fee and the Royalty Fee Reduction.
C.
Should Developer open a Qualifying Restaurant after the applicable Opening
Deadline or should Developer request and be granted an extension of the Opening Deadline for such
Restaurant, Developer shall automatically be disqualified for and shall not be eligible to receive the
Royalty Fee Reduction for that Restaurant.
5.
follows:
DAL01:44692S3rtJ
079684.0103
Remedies. Section VII.D. of the Development Agreement is hereby amended to read as
"Additional Remedies. Upon default by Developer under Section VII.B. or C,
Franchisor has the option, in its sole discretion, in addition to exercising its option to terminate this
Agreement as provided in Sections VII.B. and C, to do any one or more of the following:
(i) terminate or modify any tenitorial rights granted to Developer in Section I., including
(without limitation) the termination of any or all tenitorial protections under Section LC. of this
Agreement;
(ii)
reduce the area of such tenitorial rights;
(iii)
reduce the number of Restaurants which Developer may establish pursuant to
(iv)
terminate or modify any right of first refusal granted to Developer in Section
Secfion III.G.;
III.D.;
(v)
terminate or modify the Incentive Program (as defined in the Incentive Program
Amendment to this Agreement); or
(vi)
pursue any other remedy Franchisor may have at law or in equity."
6.
Construction: Facsimile Signatures. Except as expressly set forth in this Amendment, all
terms and conditions of the Development Agreement shall remain in full force and effect. Initially
capitalized terms used but not defined in this Amendment shall have the meanings assigned to them in
the Development Agreement. This Amendment may be executed in several counterparts, each of which
shall serve as an original for all purposes, but all of which shall constitute but one and the same
Amendment. Facsimile signatures shall be considered effective for execution purposes. Each party
providing facsimile signatures shall forward to Franchisor an originally executed signature page within
five (5) business days following Franchisor's receipt of the facsimile signature.
FRANCHISOR:
CiCi Enterprises, LP,
a Delaware limited partnership
By: CiCi GP, LLC, its General Partner
By: Ji.-Forbes-Andcrson,-Manager
Name:
Title:
Date:
DEVELOPER:
By:.
Name:.
Tifie:
Date:
DALO 1:1169253.11195368.1
079684.0103
EXHIBIT A
FORM OF FRANCHISE AGREEMENT AMENDMENT
ISFE FDD EXHIBIT C-21
DALO 1 :n69253.11195368.1
079684.0103
INCENTIVE PROGRAM
AMENDMENT TO DEVELOPMENT AGREEMENT
FOR NEW DEVELOPERS
This Incentive Program Amendment to Development Agreement For New Developers
("Amendment") is made and entered into this
day of
, 201420 (the "Effective Date") by
and between CiCi Enterprises, LP ("Franchisor") and
("Developer"). This Amendment
forms an integral part of the Development Agreement (hereinafter defined), being appended thereto and
fully incorporated therein.
RECITALS:
Franchisor has offered Qualified Developers (defined below) the opportunity to receive a
discounted franchise fee and royalty reduction ("Development Incentives," as further defined below)
under an incentive program ("Incentive Program") for new Restaurants to be established under Franchise
Agreements signed pursuant to a new CiCi's Pizza Development Agreement executed on or before
September 1, 20442fil2 foi" the development of 3-5 CiCi's Pizza Restaurants in a designated available
market, with Restaurants 1 and 2 to be opened and operating by September 1, 2012.2013. and
RcstnuantsRestaurants 3-5 (as applicable) to be opened and operating by September 1, 20132014
("Qualifying Restaurants"). September 1, 3M^2QH and September 1, 20452M4 are referred to as the
"Opening Deadline(s)".
Developer is a Qualified Developer and has been approved by Franchisor to participate in the
Incentive Program based on information provided to Franchisor by Developer.
AGREEMENT
NOW, THEREFORE, the parties, in consideration of the mutual undertakings and commitments
set forth herein, the receipt and sufficiency of which are acknowledged, agree as follows:
1.
Definitions. As used in this Amendment,
A.
A "Qualified Developer" is a person or entity that (1) has been disclosed with
CiCi's Franchise Disclosure Document, dated March 25. 2011. as amended June 10. 201126. 2012: (ii)
has been qualified financially and operationally and approved by Franchisor to participate in the
Incentive Program; (iii) if an existing CiCi's Pizza developer or franchisee, is in Good Standing (defined
below); and (iv) has signed a Development Agreement on or before September 1, 2Q142012 for the
establishment of 3-5 CiCi's Pizza Restaurants within a designated available market prior to the applicable
Opening Deadline.
B.
"Development Incentives" means, for each Qualifying Restaurant: (i) Qualified
Developer will receive a reduction in the initial Franchise Foofranchisc fee to $15,000.00 for each
refund of SIO.000.00 of the inifial franchise fee paid for such Restaurant; and (ii) provided the
Qualifying Restaurant is opened and operating prior to its scheduled Opening Deadline ,as set forth in the
Development Schedule, the reduction of weekly royalty fees to 2% of Net Sales (as defined in the
Franchise Agreement) for such Qualifying Restaurant for a period beginning on the Opening Date (as
defined in the Franchise Agreement) until the first year anniversary of the Opening Date (the "Royalty
Fee Reduction"). The Franchise Agreement for each Qualifying Restaurant will be amended by a
Franchise Agreement Amendment in the form attached as Exhibit A hereto, evidencing the reduced
initial Franchise Feefranchise fee and Royalty Fee Reduction. Following the one year Royalty Fee
Reduction period described above, weekly royalty fees paid in respect of the Qualifying Restaurant shall
be calculated at the standard rates set forth in the Franchise Agreement without regard to the Franchise
Agreement Amendment.
DALO 1:11fi9145.31195369.I
C. "Good Standing" means that Developer is not in default of any provision of the
Development Agreement (including, without limitation, the Development Schedule), or any amendment
thereof or successor thereto; that Developer and its subsidiaries and affiliates (if any) are not in default of
any Franchise Agreement or other agreement with Franchisor or its afflliates; that Developer has
substantially and timely complied with all the terms and conditions of the Development Agreement and
that Developer and its subsidiaries and afflliates (if any) have timely complied with all the terms and
conditions of all Franchise Agreements and other agreements between them and Franchisor or its
affiliates, including the timely satisfaction of all monetary obligations owed to Franchisor or its afflliates.
2.
Representations of Franchisor. Franchisor represents that it has approved Developer as
financially and operationally qualified to enter into the Development Agreement under the Incentive
Program based on the information provided by Developer. Nothing set forth herein shall be deemed a
waiver of Franchisor's right to determine Developer's financial, operational and legal qualification each
time Developer applies for a franchise to operate a Restaurant under Section III.A.2. of the Development
Agreement.
3.
Representations of Developer. Developer represents that (i) it has been disclosed with
Franchisor's Franchise Disclosure Document dated March 25* 201L as amended June 10. 201126.
2flJ2i (ii) the information it has provided to Franchisor in its application and for purposes of the
Incentive Program was true and conect when provided and is true and conect as of the Effective Date of
this Amendment; (iii) based on such information, it has been operationally and financially approved by
Franchisor to participate in the Incenfive Program; (iv) and if it is an existing CiCi's Pizza developer or
franchisee, it is in Good Standing and has no knowledge of any event which, with the giving of notice or
the passage of time, would resuh in Developer's failure to maintain Good Standing; and (v)
contemporaneously with the execution ofthis Amendment, it has signed a Development Agreement on or
before September 1, 2044-2212 for the establishment of 3-5 CiCi's Pizza Restaurants within a designated
available market by the applicable Opening Deadlines. Developer agrees that the representations set
forth herein are continuing and shall remain true in all material respects as of and following the Effective
Date of this Amendment.
4.
Development Incentives.
A.
Anything in Section II.B. of the Development Agreement to the contrary
notwithstanding. Franchisor agrees to reduce the initial Fronchise Feefranchise fee to $15,000.00 for
each Qualified Restaurant, such fee to be paid by Developer as set forth in each Franchise Agreement.
B.
Anything in Section III.A. 1. or elsewhere in the Development Agreement to the
contrary notwithstanding, each Franchise Agreement for a Qualifying Restaurant will be amended by an
amendment to the Franchise Agreement for such Restaurant, the form of which is artached hereto as
Exhibit A, evidencing the reduced inifial Franchise Feefranchise fee and the Royalty Fee Reduction.
C.
Should Developer open a Qualifying Restaurant after the applicable Opening
Deadline or should Developer request and be granted an extension of the Opening Deadline for such
Restaurant, Developer shall automafically be disqualified for and shall not be eligible to receive the
Royalty Fee Reduction for that Restaurant.
5.
follows:
Remedies. Section VII.D. of the Development Agreement is hereby amended to read as
"Additional Remedies. Upon default by Developer under Secfion VII.B. or C,
Franchisor has the opfion, in its sole discretion, in addition to exercising its option to terminate this
Agreement as provided in Sections VII.B. and C, to do any one or more of the following: .
DALO 1 ::146»145r31195369.1
079684.0103
(i) terminate or modify any tenitorial rights granted to Developer in Section I . , including
(without limitation) the termination of any or all tenitorial protections under Section LC. of this
Agreement;
(ii)
reduce the area of such tenitorial rights;
(iii)
reduce the number of Restaurants which Developer may establish pursuant to
(iv)
terminate or modify any right of first refusal granted to Developer in Section
Section III.G.;
III.D.;
(v)
terminate or modify the Incentive Program (as defined in the Incentive Program
Amendment to this Agreement); or
(vi)
pursue any other remedy Franchisor may have at law or in equity."
6.
Construction: Facsimile Signatures. Except as expressly set forth in this Amendment, all
terms and conditions of the Development Agreement shall remain in full force and effect. Initially
capitalized terms used but not defined in this Amendment shall have the meanings assigned to them in
the Development Agreement. This Amendment may be executed in several counterparts, each of which
shall serve as an original for all purposes, but all of which shall constitute but one and the same
Amendment. Facsimile signatures shall be considered effective for execution purposes. Each party
providing facsimile signatures shall forward to Franchisor an originally executed signature page within
five (5) business days following Franchisor's receipt of the facsimile signature.
FRANCHISOR:
CiCi Enterprises, LP,
a Delaware limited partnership
By: CiCi GP, LLC, its General Partner
By:
J. Forbes Anderson, Manager
Name:
Title:
Date:
DEVELOPER:
By:.
Name:
Title:
Date:
DALO 1:1169145.21195369.1
079684.0103
EXHIBIT A
FORM OF FRANCHISE AGREEMENT AMENDMENT
ISEEFDDEXTHRITr-21
DALO 111169115.21195369.1
079684.0103
EXHIBIT C
FRANCHISE AGREEMENT AND STATE AMENDMENTS
DALO 111156054.91194789.3
079684.0103
FRANCHISE AGREEMENT
BETWEEN
CICI ENTERPRISES, LP,
A DELAWARE LIMITED PARTNERSHIP
DOING BUSINESS AS CICI'S PIZZA
1080 W. BETHEL ROAD
COPPELL, TEXAS 75019
972-745-4200
AND
Name of Franchisee
Street Address
City
(
State
Zip Code
).
Area Code
Telephone
FRANCHISED LOCATION:
Street Address
City
(
State
Zip Code
).
Area Code
Telephone
No.
Form dated March 25, 2011;
FDD dated March 25.201L as amended June 10. 201126.2012
DAL01:ll55855.4j
079684.0103
CICI'S PIZZA
FRANCHISE AGREEMENT
TABLE OF CONTENTS
Page
I.
GRANT
1
II.
LEASE, PLANS, CONSTRUCTION AND OPENING DATE
3
III.
TERM AND RENEWAL
5
IV.
FEES
6
V.
FRANCHISOR'S OBLIGATIONS
9
VI.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF
FRANCHISEE AND CONTROLLING PRINCIPALS
VII
10
RESTAURANT OPERATIONS
4612
VIIL
ADVERTISING AND RELATED FEES
2021
IX
MARKS
25
X
CONFIDENTIALITY AND NONCOMPETITION COVENANTS
27
XI
BOOKS AND RECORDS
31
XII
INSURANCE
32
XIII
DEBTS AND TAXES
34
XIV
TRANSFER OF INTEREST
35
XV
INDEMNIFICATION
41
XVI
RELATIONSHIP OF THE PARTIES
43
XVII
TERMINATION
44
DALO 1:11S5855.41194849.3
079684.0103
- i-
XVIII
POST-TERMINATION
47
XIX
MISCELLANEOUS
XX
ACKNOWLEDGMENTS
DALO 1:1155855.411948493
079684.0103
- 11 -
ATTACHMENTS
Artachment A
Selected Terms: Designated Area, Approved Location, Protected Area
and Opening Date
Attachment B
Site Selection Addendum
Attachment C
Statement of Ownership Interests and Franchisee's Principals
Attachment D
Confidentiality Agreement and Ancillary Covenants Not to Compete
Attachment E
Electronic Funds Transfer Authorization
Artachment F
Assignment and Authorization
DALO 1:11SS855.41194849.3
079684.0103
- Ill -
CICI'S PIZZA
FRANCHISE AGREEMENT
THIS FRANCHISE AGREEMENT (fiie "Agreemenf) is made and entered into by and between
Enterprises,
LP,
a
Delaware
limited
partnership
("Franchisor")
and
("Franchisee") and shall be effective as of the date on
which the last party executes this Agreement ("Effective Date").
CiCi
RECITALS:
Franchisor, as the result of the expenditure of time, skill, effort and money, has developed and
owns a distinctive system (hereinafter "System") relating to the establishment and operation of
restaurants featuring an "All You'd Like To Eat" buffet and offering dine-in and carry-out pizza and
other Italian foods and related items.
The distinguishing characteristics of the System include, without limitation, distinctive exterior
and interior design, decor, color scheme, and furnishings; special recipes and menu items; uniform
standards, specifications, policies and procedures for operations; quality and uniformity of products and
services offered; procedures for inventory, management and financial control; training and assistance;
and advertising and promotional programs, all of which may be changed, deleted, improved, and further
developed by Franchisor from time to time.
Franchisor identifies the System by means of certain trade names, service marks, trademarks,
logos, emblems and indicia of origin, including, but not limited to, the mark "CiCi's" and such other
trade names, service marks, trademarks, logos, emblems and indicia of origin as are now designated, and
may hereafter be designated by Franchisor in writing, for use in connection with the System (hereinafter
refened to as "Marks").
Franchisor continues to develop, use and control the use of such Marks in order to identify for
the public the source of services and products marketed thereunder and under the System, and to
represent the System's high standards of quality, appearance and service.
Franchisee understands and acknowledges the importance of Franchisor's high standards of
quality, cleanliness, appearance and service and the necessity of operating the business licensed
hereunder in conformity with Franchisor's standards and specifications.
Franchisee desires to use the System in connection with the operation of a CiCi's Pizza
restaurant at the location specified in Artachment A hereto, as well as to receive the training and other
assistance provided by Franchisor in connection therewith.
NOW, THEREFORE, the parties, in consideration of the mutual undertakings and commitments
set forth herein, the receipt and sufficiency of which are hereby acknowledged, agree as follows:
I.
GRANT
A.
Grant of Rights. Franchisor hereby grants to Franchisee, upon the terms and conditions
in this Agreement, the right and license, and Franchisee hereby accepts the right and obligation, to
operate a CiCi's Pizza restaurant under the Marks and the System in accordance with this Agreement
("Restauranf or "licensed business").
B.
Approved Location: Protected Area and Reserved Rights.
(1)
The specific street address of the Restaurant location approved by Franchisor
("Approved Location" or "Location") shall be within the geographic area described in Attachment A
("Designated Area") and shall be set forth in Attachment A. If this Agreement is executed pursuant to a
Development Agreement with Franchisor, the Designated Area shall conespond to the Tenitory, as
described in the Development Agreement. The Designated Area shall not be exclusive or protected for
any purpose except, as applicable, to the extent and for the term provided in any Development
Agreement between the parties.
(2)
Upon the designation of the Location, Franchisee will be assigned a geographic
area ("Protected Area") that will be described in Attachment A. Except as provided in this Agreement
(including Section I.B.3.), and subject to Franchisee's full compliance with this Agreement and any other
agreement between Franchisee or its afflliates and Franchisor or its affiliates, neither Franchisor nor any
afflliate of Franchisor will establish, or authorize any person or entity other than Franchisee to establish,
a CiCi's Pizza Restaurant under the Marks in the Protected Area during the term of this Agreement. This
protection does not apply to the establishment of a CiCi's To Go Unit in the Protected Area. Franchisee
shall make all commercially reasonable efforts to advertise and promote the Restaurant within the
Protected Area.
(3)
The rights granted to Franchisee under this Agreement are nonexclusive, and
Franchisor and its afflliates have and retain all rights within and outside the Protected Area except those
expressly granted to Franchisee. Accordingly, except for the restriction set forth in Section LB.(2)
against the establishment of another CiCi's Pizza Restaurant under the Marks in the Protected Area
during the term of this Agreement, Franchisor, its affiliates, and any other authorized person or entity
shall have the right, among others,(i), to establish and operate, and to grant others the right to establish
and operate, CiCi's Pizza Restaurants under the Marks at any location outside the Protected Area
including locations that are adjacent or proximate to the Protected Area and in any Reserved Area
(defined below) whether within or outside the Protected Area, (ii) to establish and operate, and to grant
others the right to establish and operate, restaurants under other trade names, service marks and
trademarks at any location within or outside of the Protected Area, and (iii) within and outside the
Protected Area to offer and sell, and grant others the right to offer and sell, any similar or dissimilar
products and services, whether identified by the Marks or by other trademarks, trade names or service
marks, through any channel or by any method of distribution other than a CiCi's Pizza Restaurant
(including, without limitation, by or through a CiCi's To Go Unit, the Intemet or similar electronic
media), on any terms and conditions Franchisor deems appropriate. A "Reserved Area" is any enclosed
area of retail sales establishments in excess of 250,000 square feet, food courts, airports, hospitals,
cafeterias, commissaries, schools, hotels, office buildings and stadiums, arenas, ballparks, festivals, fairs,
military bases and other mass gathering locations or events. Without limiting the foregoing, Franchisor
and its afflliates may, among other things, offer and sell, and authorize others to offer and sell: (a)
collateral products, such as pre-packaged food products, T-shirts and other CiCi's memorabilia, under the
Marks at or from any location or through any channel of distribution; (b) food and beverage services
under the Marks at or through any permanent, temporary or seasonal food service facility or through any
channel of distribution except a CiCi's Pizza Restaurant located within the Protected Area, which
facilities may provide in whole or in part the products and services offered by a CiCi's Pizza Restaurant;
and (c) any products or services (including, without limitation, any food or beverage services) under any
other names and marks at any location or through any channel of distribution.
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C.
Relocation of Restaurant. Franchisee shall not relocate the Restaurant without the
express prior written consent o f Franchisor. I f Franchisee is unable to continue the operation of the
Restaurant at the Approved Location because o f the occunence of a force majeure event described in
Section XIX.F., then Franchisee may request Franchisor's approval to relocate the Restaurant to another
location in the Designated Area. Any other request to relocate the Restaurant shall also be subject to the
same procedures. I f Franchisor elects to grant Franchisee the right to relocate the Restaurant, then
Franchisee shall comply with Franchisor's then-cunent site selection procedures and construction
procedures.
H,
LEASE. PLANS. CONSTRUCTION AND OPENING DATE
Franchisee assumes all cost, liability, expense and responsibility for constmcting and equipping
the Restaurant in accordance with this Agreement and Franchisor's standards and specifications.
A.
Lease: Contract of Sale. Franchisee shal! fumish to Franchisor a copy of the executed
contract o f sale or lease for the Approved Location, as applicable, within ten (10) days after execution.
The executed contract of sale or lease shall be in the same form as the contract of sale or lease submitted
for Franchisor's approval pursuant to any Development Agreement or Site Selection Addendum between
Franchisor and Franchisee (or its afflliate). Franchisee expressly agrees (i) to furnish to Franchisor
promptly upon receipt copies o f any and all letters and notices sent to Franchisee as tenant under the
lease for the Approved Location, including, without limitation, any notices of default; and (ii) not to
amend or modify the lease, or assign, renew or extend the term of the lease, without the prior written
consent o f Franchisor. Anv proposed lease modification, amendment or renewal must he presented
to Franchisor prior to execution bv the parties f o r a compliance review bv Franchisor's approved
real estate counsel. Franchisee shall he responsible f o r the reasonable attorney's fees incurred in
connection with the compliance review of the proposed lease modificafion. amendment or renewal.
Franchisee must provide a fullv executed copy of anv lease modification, amendment or renewal to
Franchisor within ten (10) davs of execution.
B.
Zoning. Franchisee shall be responsible for obtaining all zoning classifications and
clearances which may be required by state or local laws, ordinances or regulations or which may be
necessary as a result o f any restrictive covenants relating to the Restaurant premises. Prior to beginning
the constmction o f the Restaurant, Franchisee shall (i) obtain all permits, licenses and certifications
required for the lawful constmction or remodeling and operation of the Restaurant, and (ii) certify in
writing to Franchisor that the insurance coverage specified in Section X I I . is in full force and effect and
that all required approvals, clearances, permits and certifications have been obtained. Upon request,
Franchisee shall provide to Franchisor additional copies o f Franchisee's insurance policies or certificates
of insurance and copies o f all such approvals, clearances, permits and certifications.
C.
Plans. Franchisee must independently obtain any architectural, engineering, design and
constmction services it deems necessary for the constmction of the Restaurant.
(1)
Franchisee shall adapt the prototypical architectural and design plans and
specifications for constmction of the Restaurant provided to Franchisee by Franchisor in accordance with
Section V.A. as necessary for the construction o f the Restaurant and shall submit such adapted plans to
Franchisor for review. Franchisor will use commercially reasonable efforts to either approve or reject the
plans in a timely manner after Franchisor receives the plans. I f Franchisor, in its sole discretion,
determines that the plans are not consistent with System standards. Franchisor may prohibit the
implementation o f such plans. I f Franchisor objects to any such plans. Franchisor shall provide
Franchisee with a reasonably detailed list o f changes necessary to make the plans acceptable. I f
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079684.0103
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Franchisor rejects the plans. Franchisee must submit revised plans, and Franchisor will use commercially
reasonable efforts to either approve or reject the revised plans within fifteen (15) days after Franchisor
receives the revised plans. Franchisee may not use any plans until Franchisor has approved them in
writing, and Franchisor's silence with respect to approval or rejection of the plans shall not be deemed to
be approval of the plans. Except for Franchisee's own uses related to its operation of the Restaurant,
Franchisee shall not reproduce, use or permit the use of any of Franchisor's design concepts, drawings, or
specifications without the prior written approval of Franchisor.
(2)
Franchisee shall engage the services of a qualified contractor who has
demonstrated the ability to comply with Franchisor's standards and who meets Franchisor's then-cunent
requirements. Prior to signing an agreement with a contractor, Franchisee shall submit to Franchisor
such information pertaining to the contractor as Franchisor may reasonably request. Within fifteen (15)
days following its receipt of all information requested. Franchisor shall approve or disapprove the
proposed contractor in writing.
(3)
Franchisee acknowledges that Franchisor's review of the plans for the
Restaurant and other approval rights hereunder are only to monitor compliance with the System.
Franchisee further acknowledges that Franchisor's acceptance of the plans and approval of Franchisee's
proposed contractor does not constitute a representation, wananty, or guaranty, express or implied, by
Franchisor that the plans or other anangements made by Franchisee with respect to the design and
constmction of the Restaurant are accurate or free of enor conceming their structural application.
Franchisor shall not be responsible for architecture or engineering, or for code, zoning, or other
requirements of the laws, ordinances or regulations of any federal, state, local, or municipal
govemmental body, including, without limitation, any requirement relating to accessibility by disabled
persons or others, nor shall Franchisor be responsible for any errors, omissions, or discrepancies of any
nature in the plans.
D.
Construction. Franchisee shall commence and diligently pursue constmction or
remodeling (as applicable) of the Restaurant. Commencement of constmction shall be defined as the
time at which any site work is initiated by or on behalf of Franchisee at the Location approved for the
Restaurant. Site work includes, without limitation, paving of parking areas, installing outdoor lighting
and sidewalks, extending utilities, demising of interior walls and demolishing of any existing premises,
depending on whether the Approved Location for the Restaurant is freestanding or to be contained within
a shopping mall, strip center or other interior location. During the time of construction or remodeling,
Franchisee shall provide Franchisor with such periodic reports regarding the progress of the construction
or remodeling as may be reasonably requested by Franchisor. In addition. Franchisor shall make such
on-site inspections as it may deem reasonably necessary to evaluate such progress, and Franchisor has the
right to require Franchisee to pay a reasonable fee for such on-site inspections and to pay or reimburse
Franchisor for the expenses incuned by Franchisor's representatives, such as the cost of travel, lodging
and meals, in connection with such on-site inspections. Franchisee shall notify Franchisor of the
scheduled date for completion of constmction or remodeling no later than forty-five (45) days prior to
such date. Within a reasonable time after the date of completion of constmction or remodeling.
Franchisor shall, at its option, conduct an inspection of the completed Restaurant. Franchisee
acknowledges and agrees that Franchisee will not open the Restaurant for business without the written
authorization of Franchisor and that authorization to open shall be conditioned upon Franchisee's strict
compliance with this Agreement.
E.
Opening Date. Franchisee acknowledges that time is of the essence. Subject to
Franchisee's compliance with the conditions stated below, unless Franchisee obtains an extension of the
following time periods from Franchisor in writing. Franchisee shall open the Restaurant and commence
DALO 111155855.41194849.3
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business (i) within one hundred twenty (120) days after the execution of this Agreement i f this
Agreement is signed pursuant to a Development Agreement or (ii) three hundred eighty (380) days after
the execufion of this Agreement i f this Agreement is not signed pursuant to a Development Agreement.
The date the Restaurant opens for business to the public as provided herein ("Opening Date") shall be set
forth in Attachment A. Prior to opening. Franchisee shall complete all exterior and interior preparations
for the Restaurant, including installation of equipment, fixtures, fumishings and signs, pursuant to the
plans and specifications approved by Franchisor, and shall comply with all other pre-opening obligations
of Franchisee, including, but not limited to, those obligations described in Sections VI.B.-G., to
Franchisor's satisfaction. I f Franchisee fails to comply with any of such obligations. Franchisor shall
have the right to prohibit Franchisee from commencing business. Franchisee's failure to open the
Restaurant and commence business in accordance with the foregoing shall be deemed a material breach
under this Agreement.
IH.
T E R M AND R E N E W A L
A.
Term. Unless sooner terminated as provided in Section XVII., the term of this
Agreement shall continue from the Effective Date until ten (10) years from Opening Date.
B.
Renewal. Franchisee may, at its option, renew its rights under this Agreement for one
(1) additional consecutive term o f ten (10) years, subject to any or all of the following conditions which
must, at Franchisor's option, be met prior to and at the time o f renewal:
(1)
Franchisee shall give Franchisor wrirten notice of Franchisee's election to renew
not less than six (6) months nor more than nine (9) months before the end of the initial term;
(2)
Franchisee shall refurbish, repair or replace, at Franchisee's cost and expense, all
equipment, computer systems, signs, interior and exterior decor items, fixtures, fumishings, supplies and
other products and materials required for the operation o f the CiCi's Pizza Restaurant as Franchisor may
reasonably require and shall otherwise upgrade the Restaurant to reflect the then-current standards and
image of the System;
(3)
Franchisee shall not be in default of any provision of this Agreement, any
amendment hereof or successor hereto, and neither Franchisee nor its affiliates shall be in default of any
other agreement with Franchisor or any of its afflliates; and Franchisee and its affiliates shall have
substantially and timely complied with the terms and conditions of such agreements during the respective
terms thereof;
(4)
Franchisee shall have timely satisfied all monetary obligations owed to
Franchisor and its afflliates under this Agreement and any other agreement between Franchisee or any of
its afflliates and Franchisor or any of its afflliates;
(5)
Franchisee shall present to Franchisor safisfactory evidence that Franchisee has
the right to remain in possession o f the premises o f the Restaurant during the renewal term or obtain
Franchisor's consent to new site for the RestauranL Anv proposed lease modification, amendi^enf or
renewal must be presented to Franchisor prior to execution bv the parties for a compliance review
bv Franchisor's approyed real estate counsel. Franchisee shall he responsible for the reasonable
is incurred in connecfion with the cnpipliance review of the proposed lease
lent or renewal. Franchisee must provide a full
modificafion. amendment or renewal to Franchisor within ten (10) da
DALO 1 :U5585S. 11194849.3
079684.0103
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(6)
Franchisee shall execute Franchisor's then-cunent form of renewal franchise
agreement, which agreement shall supersede this Agreement in all respects, and the terms of which may
differ from the terms of this Agreement, including a different royalty fee and advertising contribution;
(7)
Franchisee shall pay to Franchisor a renewal fee in an amount equal to twentyfive percent (25%) of Franchisor's then cunent initial franchise fee for a CiCi's Pizza Restaurant, plus all
amounts necessary to reimburse Franchisor for its reasonable out-of-pocket costs and expenses associated
with renewing the franchise, including, without limitation, legal and accounting fees.
(8)
Franchisee and its Controlling Principals shall execute a general release of any
and all claims against Franchisor, its afflliates, and their respective officers, directors, shareholders,
partners, agents, representatives, independent contractors, servants and employees, past and present, in
their corporate and individual capacities, including, without limitation, claims arising under this
Agreement or under federal, state or local laws, rules, regulations or orders; and
(9)
Franchisee shall comply with Franchisor's then-current qualification and training
requirements.
IV.
FEES
A.
Initial Franchise Fee. Franchisee shall pay to Franchisor an initial franchise fee of
Dollars ($
) upon the execution of this AgreemenL Except as provided in
Section VLC.(4) of this Agreement, the initial franchise fee when so paid shall be deemed fully eamed
and nonrefundable in consideration of the administrative and other expenses incurred by Franchisor in
granting the license hereunder and for its lost or deferred opportunity to grant such license to any other
party.
B.
Royalty Fee: Royalty Report. During the term of this Agreement, Franchisee shall pay to
Franchisor, in partial consideration for the rights herein granted, a continuing weekly royalty fee as
follows:
(i)
four percent (4%) (the "Base Royalty Rate") of the first $28,850 of weekly Net
Sales;
(ii)
five
percent (5%) ofthe incremental weekly Net Sales from $28,851 to $33,650;
(iii) five
$33,651 to $38,450; and
and one-half percent (5.5%) of the incremental weekly Net Sales from
(iv)
six percent (6%) of the incremental weekly Net Sales in excess of $38,450.
Franchisor reserves the right to increase the Base Royalty Rate to five percent (5%) at any time on
written notice to Franchisee. If it does, all other percentage tiers will be increased by 1%.
Such royalty fee shall be due and payable each week based on the Restaurant's Net Sales for the
preceding week and shall be sent by Franchisee to Franchisor via electronic funds transfer, or such other
means specified by Franchisor, so that it is received by Franchisor on or before Wednesday of the
following week. For purposes of this Section IV.B., the Restaurant's first week of operation shall begin
on the date the Restaurant commences operations and shall end on the following Sunday and each
subsequent week shall begin on Monday and conclude on the following Sunday. If the date on which
DALO 1:1155855.41194849.3
079684.0103
- 6-
such payments would otherwise be due is not a business day, then payment shall be due on the next
business day. A business day for the purpose of this Agreement means any day other than Saturday,
Sunday or the following national holidays: New Year's Day, Martin Luther King Day, Presidents' Day,
Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving and
Christmas. Franchisee shall provide Franchisor with a report itemizing the Net Sales for the Restaurant
weekly, on or before each Monday, with respect to Net Sales for the preceding week (Monday through
Sunday) by telephone, or by such other method as Franchisor may reasonably direct. Franchisee shall
provide Franchisor with such other reports required hereunder as directed by Franchisor in the Manuals
(defined in Section V.B.) or otherwise in writing.
C.
Net Sales. For the purposes of determining the royalties to be paid hereunder, "Net
Sales" shall mean the total selling price of all services and products and all income of every other kind
and nature related to sales at or from the Restaurant (including, without limitation, income related to
delivery operations at such time, if any, as said delivery operations may be authorized by Franchisor),
whether for cash or credit and regardless of collection in the case of credit, but expressly excluding the
following:
(1)
Receipts from the operation of any public telephone installed in the Restaurant,
the sale of tobacco products or products from vending machines located at the Restaurant and receipts
from the operation of any video game machines located at the Restaurant, except for any amount
representing Franchisee's share of such revenues;
(2)
Sums representing sales taxes collected directly from customers, based upon
present or future laws of federal, state or local governments, collected by Franchisee in the operation of
the Restaurant, and any other tax, excise or duty which is levied or assessed against Franchisee by any
federal, state, municipal or local authority, based on sales of specific merchandise sold at or from the
Restaurant, provided that such taxes are actually transmitted to the appropriate taxing authority;
(3)
Tips or gratuities paid directly by Restaurant customers to employees of
Franchisee or paid to Franchisee and then tumed over to such employees by Franchisee in lieu of direct
tips or gratuities;
(4)
Retums to shippers or manufacturers; and
(5)
Proceeds from isolated sales of trade fixtures not constituting any part of
Franchisee's products and services offered for resale at the Restaurant nor having any material effect
upon the ongoing operation of the Restaurant required under this Agreement.
Franchisor may, from time to time, authorize certain other items to be excluded from Net Sales. Any
such permission may be revoked or withdrawn at any time in writing by Franchisor in its discretion.
The following are included within the definition of "Net Sales" except as noted below:
(1)
The full value of meals fumished to Franchisee's employees as an incident to
their employment except that the value of any discounts extended to such employees may be credited
against Net Sales during the month in which the meals were fumished for the purpose of determining the
amount of Net Sales upon which the royalty fee is due; and
(2)
The retail value of all products sold in connection with the redemption of
coupons, gift certificates, gift cards or vouchers; provided, that at the time such coupons, gift certificates,
DALO 1 :tlS58S5.41194849.3
079684.0103
- 7-
gift cards or vouchers are purchased, the retail price thereof may be excluded from Net Sales for the
purpose of determining the amount of Net Sales upon which fees are due.
D.
Administrative Fee: Data Collection Fee.
(1)
If Franchisee requests Franchisor to (i) amend this Agreement or (ii) consent to,
prepare any other documentation for, or review documentation for any transaction for which no specific
fee is imposed under any other provision of this Agreement, Franchisee shall pay the applicable
administrative fee to Franchisor as determined from time to time. The administrafive fee shall, in no
event, exceed Five Thousand Dollars ($5,000) per document.
(2)
If Franchisee fails to submit when due any information or report required by this
Agreement or the Manuals, including, without limitation. Net Sales reports, data warehouse reports and
information, certificates of insurance and financial statements. Franchisor may, after first providing
written notice and a reasonable opportunity to cure (which need not exceed ten (10) days) assess a data
collection fee of up to Fifty Dollars ($50.00) per week for so long as the information or report remains
outstanding. Franchisor's assessment of the data collection fee shall be in addition to its other rights and
remedies.
E.
Past Due Amounts. Franchisee shall not be entitled to withhold payments due
Franchisor under this Agreement on grounds of alleged nonperformance by Franchisor hereunder. Any
payment or report not actually received by Franchisor on or before such date shall be deemed overdue.
Time is ofthe essence with respect to all payments to be made by Franchisee to Franchisor. All unpaid
obligations under this Agreement shall bear interest from the date due until paid at the maximum rate
allowed by applicable law. Notwithstanding anything to the contrary contained herein, no provision of
this Agreement shall require the payment or permit the collection of interest in excess of the maximum
rate allowed by applicable law. If any excess of interest in such respect is herein provided for, or shall be
adjudicated to be so provided in this Agreement, the provisions of this paragraph shall govem and
prevail, and neither Franchisee nor its Principals shall be obligated to pay the excess amount of such
interest. I f for any reason interest in excess of the maximum rate allowed by applicable law shall be
deemed charged, required or permitted, any such excess shall be applied as a payment and reduction of
any other amounts which may be due and owing hereunder, and if no such amounts are due and owing
hereunder then such excess shall be repaid to the party that paid such interest.
F.
Electronic Fund Transfers. Upon the execution of this Agreement and at any time
thereafter at Franchisor's request, Franchisee shall execute Artachment E to this Agreement and all other
documents necessary to permit Franchisor to withdraw funds from Franchisee's designated bank account
by electronic funds transfer ("EFT") in the amount of the royalty fee described above, the advertising
contribution described in Section VIII.C., and all other fees or amounts described in this Agreement
(including, without limitation. Section VLB.(6)), at the time or times that such fees or amounts become
due and payable under the terms of this Agreement, provided such day is a business day (and if not a
business day, on the next succeeding business day). Any fee calculated by reference to Net Sales shall be
based on the information in the applicable Net Sales Report or, if the Net Sales Report has not been
received within the time period required by this Agreement, then Franchisor may process an EFT for the
subject week based on the most recent Net Sales Report provided to Franchisor by Franchisee; provided
that if a Report for the subject week is subsequently received and reflects (i) that the actual amount of the
fee due was more than the amount of the EFT by Franchisor, then Franchisor shall be entitled to
withdraw additional fimds through EFT from Franchisee's designated bank account for the difference; or
(ii) that the actual amount of the fee due was less than the amount of the EFT by Franchisor, then
Franchisor shall credit the excess amount to the payment of Franchisee's future obligations. Should any
I
DALO 1:1155855.41194S49.3
079684.0103
EFT not be honored by Franchisee's bank for any reason. Franchisee agrees that it shall be responsible
for that payment plus Franchisor's then current service charge, which may include any service charge due
to the bank. I f any payments are not received when due, interest may be charged by Franchisee in
accordance with Section IV.E. above. Upon written notice to Franchisee, Franchisor may designate
another method of payment, at Franchisor's sole discretion.
V.
FRANCHISOR'S OBLIGATIONS
Franchisor agrees to provide the services described below with regard to the Restaurant:
A.
Architectural Plans. On loan, a set of prototypical architectural and design plans and
specifications for a CiCi's Pizza restauranL Franchisee shall independently have such architectural and
design plans and specifications adapted for construction of the Restaurant in accordance with Section II.
B.
Manuals. Access to one (1) set of Confidential Operations Manuals (which shall include
any specifically named manuals, together with all other manuals, books, pamphlets, memoranda,
directives, instructions and any supplemental bulletins, notices, revisions, modifications, updates or
amendments thereto, and other materials, whether in written, machine readable, electronic or other form,
and all of which shall be deemed a part thereof) as Franchisor shall have developed for use in the
licensed business, as the same may be revised by Franchisor from time to time (the "Manuals," as more
fully described in Section X.A.). Franchisor may physically deliver a copy or the Manuals or
altematively may transmit a copy of the Manuals and any revisions by electronic mail, intemet, intranet
or other electronic means or post the Manuals and any revisions on a website.
C.
Quality .Inspections. Visits to the Restaurant and evaluations of the products sold and
services rendered therein from time to time as reasonably determined by Franchisor, as more fully
described in Section VILE.(6).
D.
Advertising Materials. In Franchisor's discretion, certain advertising and promotional
materials and information developed by Franchisor from time to time for use by Franchisee in marketing
and conducting local advertising for the Restaurant at a reasonable cost to Franchisee. Franchisor shall
have the right to review and approve or disapprove all advertising and promotional materials that
Franchisee proposes to use, pursuant to Section VIII.
E.
Operational Advice. Advice and written materials concerning techniques of managing
and operating the Restaurant from time to time developed by Franchisor, including new developments
and improvements in restaurant equipment and food products and the packaging and preparation thereof
F.
Collateral Merchandise: Equipment and Decor. From time to time. Franchisor may, at
Franchisor's discretion, make available to Franchisee at a reasonable cost for resale, certain promotional
and other merchandise identifying the System, such as pre-packaged food products, T-shirts, sweatshirts,
caps and other CiCi's Pizza memorabilia, as well as certain restaurant equipment and decor items.
G.
Approved Supplier List. A list of approved suppliers as described in Section VII.D. from
time to time as Franchisor deems appropriate.
H.
Training. An initial training program for Franchisee's Managing Principal, Operator,
Managers and other training programs in accordance with the provisions of Section VI.F.(l), (2) and (4).
DALO 1 :H55855.41194849.3
079684.0103
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I.
opening Assistance. On-site opening assistance at the Restaurant in accordance with the
provisions of Section VI.F.(3).
J.
Advertising Fund.
accordance with Section VIII.
VI.
Establishment and administration of an advertising fund in
REPRESENTATIONS. WARRANTIES AND COVENANTS OF FRANCHISEE AND
CONTROLLING PRINCIPALS
A. Restaurant Operations. Franchisee and each of the Controlling Principals covenant and agree
that they shall make all commercially reasonable efforts to operate the Restaurant so as to achieve
optimum sales. Notwithstanding the foregoing. Franchisee and each of the Controlling Principals
expressly acknowledge and agree that the menu items, products and services offered at or from the
Restaurant, and the manner and style in which they are distributed, shall at all times conform to those
expressly authorized in writing by Franchisor, as further described in Section VII. Accordingly, and
without limitation. Franchisee and the Controlling Principals agree that they will not institute or engage
in delivery of the menu items, products or services offered at the Restaurant without the prior express
written authorization of Franchisor. Franchisee and the Controlling Principals acknowledge and agree
that any failure to comply with this provision shall constitute a material breach of this Agreement for
which Franchisor may terminate this Agreement.
B.
Application, Organization and Ownership Information. Franchisee and the Controlling
Principals represent, wanant and covenant that all of the information provided in Franchisee's
Application for a CiCi's Pizza franchise was at the time made and is as of the Effective Date of this
Agreement true and conect. Franchisee and the Controlling Principals further represent, wanant and
covenant as follows:
(1)
I f Franchisee is a corporation, partnership, limited liability company or other
legal entity,
(a)
Franchisee is duly organized and validly existing under the state law of
its formation;
(b)
Franchisee is duly qualified and is authorized to do business in each
jurisdiction in which its business activities or the nature of the properties owned by it require
such qualiflcation;
(c)
Franchisee's corporate charter or written partnership or limited liability
company agreement shall at all times provide that the activities of Franchisee are confined
exclusively to the operation of the Restaurant and Franchisee shall not engage in any other
business activity, unless otherwise consented to in writing by Franchisor;
(d)
The execution of this Agreement and the consummation of the
transactions contemplated hereby are within Franchisee's corporate power, if Franchisee is a
corporation, or i f Franchisee is a partnership or limited liability company, permitted under
Franchisee's written partnership or limited liability company agreement and have been duly
authorized by Franchisee;
(e)
I f Franchisee is a corporation, copies of Franchisee's articles of
incorporation, bylaws, other goveming documents, any amendments thereto, resolutions of the
DALO 1:115S8S5.41194849.3
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Board of Directors authorizing entry into and performance of this Agreement, and any
certificates, buy-sell agreements or other documents restricfing the sale or transfer of stock of the
corporation, and any other documents as may be reasonably required by Franchisor shall have
been fumished to Franchisor prior to the execution of this Agreement; or, if Franchisee is a
partnership or limited liability company, copies of Franchisee's written partnership or limited
liability company agreement, other goveming documents and any amendments thereto shall have
been fumished to Franchisor prior to the execution of this Agreement, including evidence of
consent or approval of the entry into and performance of this Agreement by the requisite number
or percentage of partners or members, as applicable, if such approval or consent is required by
Franchisee's written partnership or limited liability company agreement;
(f)
If Franchisee is a corporation, partnership, limited liability company, or
other legal entity, the ownership interests in Franchisee are accurately and completely described
in Artachment C. Further, if Franchisee is a corporation. Franchisee shall maintain at ali times a
current list of all owners of record and all beneficial owners of any class of voting securities in
Franchisee or, if Franchisee is a partnership, limited liability company, or other form of legal
entity, Franchisee shall maintain at all times a cunent list of all owners of an interest in the
partnership, limited liability company or other entity. Franchisee shall make its list of owners
available to Franchisor upon request;
(g)
I f Franchisee is a corporation. Franchisee shall maintain stop-transfer
instmctions against the transfer on its records of any of its equity securities and each stock
certificate representing stock of the corporation shall have conspicuously endorsed upon it a
statement in a form satisfactory to Franchisor that it is held subject to all restrictions imposed
upon assignments by this Agreement, including, without limitation, the option set forth in
Section XIV.E.(5) hereof If Franchisee is a partnership or limited liability company, its written
partnership or limited liability company agreement shall provide that ownership of an interest in
the partnership or limited liability company is held subject to all restrictions imposed upon
assignments by this Agreement, including without limitation, the option set forth in Section
XIV.E.(5) hereof In addition, any agreements among Franchisee's shareholders, partners or
members, as applicable, shall provide for the consent of all shareholders, partners, or members to
the transfer of the Interests (defined in Section XIV.E.(5)) to the Franchisor or its designee upon
the exercise of the options described in said Section XIV.E.(5) and, with respect to any
partnership Franchisee, at the opfion of Franchisor (or its designee), to the admission of the
transferee of such Interest(s) to the partnership as a substitute partner;
(2)
Franchisee and, at Franchisor's request, each of the Controlling Principals, have
provided Franchisor with cunent financial statements of Franchisee and such Controlling Principals.
Such financial statements present fairly the financial position of Franchisee and each of the Controlling
Principals, as applicable, at the dates indicated therein and with respect to Franchisee, the results of its
operations and its cash flow for the years then ended. Franchisee agrees that it shall maintain at all times,
during the term of this Agreement, sufficient working capital to fulfill its obligations under this
Agreement. Each of the financial statements mentioned above shall be certified as tme and conect and
shall have been prepared in conformity with generally accepted accounting principles applicable to the
respective periods involved and, except as expressly described in the applicable notes, applied on a
consistent basis. No material liabilities, adverse claims, commitments or obligations of any nature exist
as ofthe date ofthis Agreement, whether accmed, unliquidated, absolute, contingent or otherwise, which
are not reflected as liabilities on the financial statements of Franchisee or the Controlling Principals;
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(3)
If, after the execution of this Agreement, any person ceases to qualify as one of
Franchisee's Principals (defined in Section XIX.T.) or if any individual succeeds to or otherwise comes
to occupy a position which would, upon designation by Franchisor, qualify him as one of Franchisee's
Principals, Franchisee shall notify Franchisor within ten (10) days after any such change and, upon
designation of such person by Franchisor as one of Franchisee's Principals or as a Controlling Principal,
as the case may be, such person shall execute such documents and instruments (including, as applicable,
this Agreement) as may be required by Franchisor to be executed by others in such positions;
(4)
The Controlling Principals shall execute the Controlling Principal Signature
Page/Guaranty and Assumption Agreement ("Guaranty") attached to this Agreement and shall jointly and
severally, guarantee Franchisee's performance of all of Franchisee's obligations, covenants and
agreements hereunder pursuant to the terms and conditions of such Guaranty, and shall otherwise bind
themselves to the terms ofthis Agreement as stated therein. Each of Franchisee's Principals (as defined
in Section XIX.T.) who do not sign the Guaranty as Controlling Principals shall, at Franchisor's request,
execute and bind themselves to the confidentiality and noncompetition covenants set forth in the
Confidentiality Agreement and Ancillary Covenants Not to Compete which forms Attachment D to this
Agreement (see Sections X.B.(l) and X.C.(4));
(5)
Franchisee shall provide Franchisor will any and all loan documents or other
documentation regarding the financing of the Restaurant that Franchisor may request; and
(6)
At Franchisor's request. Franchisee will guarantee the obligations of each
affiliate of Franchisee which signs a franchise agreement with Franchisor and will cause each such
affiliate to guarantee the obligations of Franchisee hereunder. Further, in the event of any uncured
default of its franchise agreement(s) by any such afflliate whose obligations have been guaranteed by
Franchisee, Franchisee hereby authorizes Franchisor to withdraw by electronic funds transfer from
Franchisee's account identified in Attachment E to this Agreement any funds necessary to cure such
default.
Franchisee and the Controlling Principals acknowledge and agree that the representations,
wananties and covenants set forth above in Section VI.B.(I)-(6) are continuing obligations of Franchisee
and the Controlling Principals, as applicable, and that any failure to comply with such representations,
wananties and covenants shall constitute a material breach under this Agreement. Franchisee and the
Controlling Principals will cooperate with Franchisor in any efforts made by Franchisor to verify
compliance with such representations, wananties and covenants.
C.
Managing Principal: Operator.
(1)
Prior to the execution of this Agreement, Franchisee shall designate and at all
times maintain an owner approved by Franchisor to serve as its Managing Principal, with primary
responsibility for the supervision of the franchised business. Unless otherwise approved by Franchisor,
the Managing Principal shall be the same for all franchise agreements executed pursuant to any
Development Agreement between Franchisee (or its afflliate) and Franchisor and fiie same as the
Managing Principal designated under any such Development Agreement. The Managing Principal must
be a Controlling Principal who maintains a direct or indirect vested ownership interest in Franchisee.
Except as may otherwise be provided in this Agreement, the Managing Principal's interest in Franchisee
shall be and shall remain free of any pledge, mortgage, hypothecation, lien, charge, encumbrance, voting
agreement, proxy, security interest or purchase right or options.
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(2)
In addition to exercising general supervisory responsibility for the franchised
business, the Managing Principal also must serve as Franchisee's Operator, with direct responsibility for
overseeing Restaurant operations, unless Franchisee designates another person whom Franchisor
approves to serve as its Operator. Franchisee shall designate an Operator approved hv Franchisor
not later than the date this Apreement is executed. An Operator may, but need not, be an owner and
will be responsible for overseeing Restaurant operations. I f the Managing Principal and the Operator
differ. Franchisee and the Managing Principal remain fully responsible for the Operator's performance.
(3)
The Managing Principal and any Operator shall, during the entire period they
serve in such capacities, meet Franchisor's qualifications and such other standards as may be set forth in
the Manuals or otherwise in writing. Without limitation o f the foregoing, the person serving as
Franchisee's initial Operator shall successfully complete Franchisor's management training program
(the duration and scope of which may vary, depending upon such person's prior restaurant operating
experience) within a reasonable period o f time after the execution of this Agreement and prior to the
Opening Date or, in the cose of ony successor or replacement, within a reasonable period of time
after his or her appointment. I f Franchisee's initial Operator fails, in Franchisor's sole judgment, to
satisfactorily complete such program, and Franchisee fails to cure such—defaultsthfcn vvithin
ffinety'tbiE^ ( 9 0 ^ days following written notice from—Franchisorthereof from Franchisor.
Franchisee shall designate a new Operator approved bv Franchisor to enter the manapement
training nrogram. I n addition to anv other initiatives undertaken bv Franchisee to identify a new
Operator. Franchisor mav require Frapcl^ispe to use a recruiting service approved bv Fraqpl^i^or
to assist in idenfifvinp a qualified Operator. Use o f anv such service shall not relieve Fi
its obligation to idenfify and appoint an Operator within such thirty f30^ dav period. I f Fi
fails to have an Operator who has, in Franchisor's sole judgment, satisfactorilv completed the
•rogram on or before the scheduled Opening Date. Franchisor may terminate
this Agreement in accordance with Section X V I I . A . n V n h V i i i t and refund to Franchisee one-half of the
initial franchise fee paid by Franchisee.
(4)
Franchisee agrees to vest the Managing Principal and any Operator with
sufficient decision making authority to expedite the determinations and decisions that are essential to
effective and efficient operation of the franchised business. The Operator must devote full time best
efforts to the supervision of the Restaurant's operation and, with Franchisor's consent, to the supervision
of other CiCi's Pizza Restaurants owned by Franchisee or its affiliate(s) and operated pursuant to
franchise agreement(s) with Franchisor. Neither the Managing Principal nor the Operator shall engage in
any other business or activity that may conflict with Franchisee's obligations under the Franchise
Agreement.
(5)
Franchisee shall at all times keep Franchisor informed as to the identity of the
persons serving as Franchisee's Managing Principal and Operator. I f Franchisee's relationship with the
Managing Principal or Operator terminates or materially changes, Franchisee shall promptly designate a
qualified replacement and shall notify Franchisor within five (5) business days of any change. Anv
icement Operator .shall complete Franchisor's manapement training program
isonable neriod of fime after his or her appointmenL I f Franchisor, in its sole judgment,
determines that the franchised business is not supervised by a properly trained and qualified Managing
Principal and/or Operator, Franchisor shall notify Franchisee and Franchisee shall take appropriate
conective measures within a reasonable period of time, not to exceed sixty (60) days from the date of the
notice. Further, during such time period. Franchisee shall provide interim supervision of the licensed
business in accordance with this Agreement and approved in writing by Franchisor. Any failure to
comply with the requirements o f this Secfion VLC. shall be deemed a material breach under Section
XVII.A.(3)(h) ofthis Agreement.
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D.
General Manager. Not later than forty-five (45) days prior to the Opening Date,
Franchisee shall designate and shall retain at all times a general manager ("General Manager") to direct
the operation and management of the Restaurant. The General Manager shall be responsible for the daily
operation ofthe Restaurant. The General Manager shall, during the entire period he serves as General
Manager, meet the following qualifications:
(1)
The General Manager shal! satisfy Franchisor's educational and business
experience criteria as set forth in the Manuals as defined herein or otherwise in writing by Franchisor;
(2)
The General Manager shall devote full time and best efforts to the supervision
and management of the Restaurant and shall not engage in any other business activity without
Franchisor's prior written consent;
(3)
The General Manager shall be an individual acceptable to Franchisor;
(4)
The General Manager shall complete, to Franchisor's satisfaction, Franchisor's
initial training program for managers not later than fifteen (15) days prior to the Opening Date (or, in the
case of any successor or replacement General Manager within a reasonable period of time after his or her
appointment). Franchisor shall determine, in its sole discretion, whether management candidate has
satisfactorily completed initial training. If the initial training program is not satisfactorily completed by
any such person, or i f Franchisor, in its reasonable business judgment based upon the performance of
such person determines that the training program cannot be satisfactorily completed by such person.
Franchisor shall notify Franchisee and Franchisee shall take appropriate corrective measures, within a
reasonable period of time, not to exceed thirty (30) days; and
(5)
Franchisee shall maintain at all times during the term of this Agreement a
General Manager meeting the qualifications set forth in this Section VI.D. and shall at all times keep
Franchisor informed as to the identity of the person serving as Franchisee's General Manager. If
Franchisor, in its sole judgment, determines that the Restaurant is not managed by a properly trained and
qualified General Manager, Franchisor shall notify Franchisee and Franchisee shall take appropriate
conective measures within a reasonable period of time, not to exceed sixty (60) days from the date of the
notice. Further, during such time period, Franchisee shall provide interim management of the Restaurant
in accordance with this Agreement and approved in writing by Franchisor. Any failure to comply with
the requirements of this Section VI.D. shall be deemed a material breach under Section XVII.A.(3)(p)
hereof
E.
Assistant Managers. Not later than forty-five (45) days prior to the Opening Date,
Franchisee shall designate and retain, and shall thereafter maintain during the term of this Agreement, the
number of assistant managers required by Franchisor ("Assistant Managers"). Franchisee shall also
designate and retain at all times such other personnel as Franchisor deems reasonably necessary for the
operation and management of the Restaurant. The Assistant Managers shall be responsible for the daily
operation of the Restaurant, subject to the direction of the General Manager. The Assistant Managers
shall, during the entire period they serve as such, meet the following qualifications:
DALOLl
079684.0103
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(1)
The Assistant Managers shall satisfy Franchisor's educational and business
experience criteria as set forth in the Manuals or otherwise in writing by Franchisor;
(2)
The Assistant Managers shall devote full time and best efforts to the supervision
and management of the Restaurant, subject to the direction of the General Manager;
(3)
The Assistant Managers shall be individuals acceptable to Franchisor;
(4)
The Assistant Managers shall complete, to Franchisor's satisfaction.
Franchisor's initial training program for managers not later than fifteen (15) days prior to the Opening
Date (or, in the case of any successor or replacement Assistant Manager within a reasonable period of
time after his or her appointment). Franchisor shall determine, in its sole discretion, whether a
management candidate has satisfactorily completed initial training. If the initial training program is not
satisfactorily completed by any such person, or if Franchisor, in its reasonable business judgment based
upon the performance of such person determines that the training program cannot be satisfactorily
completed by such person. Franchisor shall notify Franchisee and Franchisee shall take appropriate
conective measures, within a reasonable period of time, not to exceed thirty (30) days; and
(5)
Franchisee shall at all times keep Franchisor informed as to the identities of the
persons serving as Franchisee's Assistant Managers. If Franchisor, in its sole judgment, determines that
the Restaurant is not managed by properly trained and qualified Assistant Managers, Franchisor shall
notify Franchisee and Franchisor shall take appropriate conective measures within a reasonable period of
time, not to exceed sixty (60) days from the date of the notice. Further, during such time period,
Franchisee shall provide interim management of the Restaurant in accordance with this Agreement and
approved in writing by Franchisor. Any failure to comply with the requirements of this Section VI.E.
shall be deemed a material breach under Section XVILA.(3)(p) hereof
F.
Training and Assistance. Franchisee agrees that it is necessary to the continued
operation of the System and the Restaurant that Franchisee's personnel receive such training as
Franchisor may require. Accordingly, in addition to the training requirements set forth in Sections VLC,
D. and E., Franchisee agrees as follows:
(1)
Training shall be conducted by Franchisor at a Franchisor-operated restaurant or
other location(s) designated by Franchisor. I f this Agreement relates to Franchisee's first Restaurant
under the System, Franchisor shall provide instmctors and training materials for the initial management
training program at no additional charge to Franchisee, other than the expenses described in Section
VLF.(5) below. Franchisor reserves the right to charge a reasonable fee for any initial training provided
to a replacement or successor Operator or. Manager, and to any initial, replacement or successor
personnel of any additional CiCi's Pizza restaurant established by Franchisee.
(2)
Franchisee's Managing Principal, Operator, Managers and such other Restaurant
personnel as Franchisor shall designate shall attend such additional training programs and seminars as
Franchisor may offer from time to time. For all such programs and seminars. Franchisor will provide the
instmctors and training materials. However, Franchisor reserves the right to charge a reasonable fee for
such additional training programs and seminars.
(3)
In connection with the opening of the Restaurant, Franchisor may provide
Franchisee with on-site opening assistance for a period of time of up to nine (9) days. The number of
trained representatives providing such assistance and the time period for which such assistance will be
provided shall be determined by Franchisor based upon the number of CiCi's Pizza restaurants operated
DALO 1 1155855.41194849.3
079684.0103
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by Franchisee and Franchisor's assessment of Franchisee's operational requirements. Franchisee shall
not be required to pay a fee for on-site opening assistance, but unless this Agreement relates to
Franchisee's first Restaurant under the System, Franchisee shall, at Franchisor's request, pay or
reimburse Franchisor for the expenses incuned by Franchisor's representatives, such as the cost of travel,
lodging and meals.
(4)
Upon the reasonable request of Franchisee or as Franchisor shall deem
appropriate. Franchisor shall, during the term hereof and subject to the availability of personnel, provide
Franchisee with addifional trained representatives who shall provide on-site remedial training to
Franchisee's Restaurant personnel. Franchisee shall pay the per diem fee then being charged to
Franchisees under the System for the services of such trained representatives, plus their costs of travel,
lodging and meals.
(5)
Unless otherwise agreed in writing. Franchisee shall be responsible for any and
all expenses, including, without limitafion, the costs of travel, lodging, meals and wages, incurred by
Franchisee or Franchisee's personnel in connection with any training program (initial or otherwise) under
this Section VI.
G.
Legal Compliance. Franchisee shall comply with all federal, state and local laws, rules
and regulations and shall timely obtain any and all permits, certificates or licenses necessary for the full
and proper conduct of the licensed business, including, without limitation, licenses to do business,
fictifious name registrafions, sales tax permits, fire clearances, health permits, certificates of occupancy
and any permits, certificates or licenses required by any environmental law, mle or regulation, and if beer
and/or wine sales are permitted by Franchisor and applicable law and are conducted by Franchisee, any
and all state, county, and/or local liquor licenses required for the on-premises sale and consumption of
beer and/or wine at the Restaurant and all applicable laws and regulations relating to the sale of beer
and/or wine at the Restaurant. Franchisee shall also comply with all other requirements and obligations
provided for in this Agreement.
H.
Anti-Tenorist Acfivities. Franchisee certifies certify that neither Franchisee nor any of
Franchisee's owners, employees or anyone associated with Franchisee is listed in connection with any
Anti-Tenorism Law and Franchisee agrees not to hire or have any dealings with a person so listed.
Franchisee further certifies that Franchisee has no knowledge or information that, if generally known,
would result in Franchisee, its owners, employees, or anyone associated with Franchisee being so listed.
Franchisee agrees to comply with and/or assist Franchisor to the fullest extent possible in Franchisor's
efforts to comply with the Anfi-Tenorism Laws and, in connection with such compliance. Franchisee
represents and wanants that none of Franchisee's property or interests are subject to being "blocked"
under any of the Anfi-Tenorism Laws and that Franchisee and its owners are not otherwise in violafion
ofany ofthe Anfi-Tenorism Laws. Franchisee specifically acknowledges and agrees that Franchisee's
indemnification responsibilities as provided in Section XV. of this Agreement pertain to Franchisee's
obligations under this Section VI.H. Any misrepresentation by Franchisee under this Section or any
violation of the Anti-Tenorism Laws by Franchisee, its owners, or employees shall constitute grounds for
immediate termination of this Agreement and any other agreement Franchisee has entered into with
Franchisor or one of Franchisor's afflliates in accordance with the terms of Sections XVII. (2) and XVIII.
ofthis Agreement. Anfi-Tenorism Laws" means Executive Order 13224 issued by the President of the
United States, fiie Tenorism Sanctions Regulations (Tifie 31, Part 595 ofthe U.S. Code of Federal
Regulations), the Foreign Tenorist Organizations Sanctions Regulations (Tifie 31, Part 597 of the U.S.
Code of Federal Regulations), the Cuban Assets Confi-ol Regulations (Title 31, Part 515 ofthe U.S. Code
of Federal Regulations), the USA PATRIOT Act, and all other present and future federal, state and local
laws, ordinances, regulations, policies, lists and any other requirements of any govemmental authority
DALO1:1155855.11194849.3
079684.0103
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(including, without limitation, the United States Department of Treasury Office of Foreign Assets
Control) addressing or in any way relating to tenorist acts and acts of war.
VII.
RESTAURANT OPERATIONS
A.
Standards Compliance.
Franchisee understands the importance of maintaining
uniformity among all of the CiCi's Pizza restaurants and the importance of complying with all of
Franchisor's standards, specifications, policies and procedures relating to the operation of the Restaurant.
B.
Maintenance. Franchisee shall maintain the Restaurant in a high degree of sanitation,
repair and condition, and in connection therewith shall make such additions, alterations, repairs and
replacements thereto (but no others without Franchisor's prior wrirten consent) as may be required for
that purpose, including, without limitation, such periodic repainting or replacement of obsolete signs,
fumishings, equipment (including, but not limited to, computer hardware and software), and decor as
Franchisor may reasonably direct and shall obtain any new or additional equipment (including computer
hardware and software), fixtures, supplies and other products and materials which may be reasonably
required by Franchisor for Franchisee to offer and sell new menu items from the Restaurant or to provide
the Restaurant's services by altemative means. Except as may be expressly provided in the Manuals, no
alterations or improvements or changes of any kind in design, equipment, signs, interior or exterior decor
items, fixtures or fumishings shall be made in or about the Restaurant or its premises without the prior
written approval of Franchisor.
C.
Improvements and Modemization. To assure the continued success of the Restaurant,
Franchisee shall, upon the request of Franchisor, make other improvements to modemize the Restaurant
premises, equipment (including computer hardware and software), signs, interior and exterior decor
items, fixtures, fumishings, supplies and other products and materials required for the operation of the
Restaurant, to Franchisor's then-cunent standards and specifications. Without limiting the foregoing.
Franchisee agrees that i f Franchisor requires, it will make the capital improvements described in this
Section VII.C. at any time on or after the fifth {5*^) anniversary of the Opening Date, or at any other time
during the term of this Agreement that a majority of the CiCi's Pizza restaurants then operated by
Franchisor or its affiliates have made or are utilizing best efforts to make such improvements or
modifications.
D.
Standards and Specifications: Approyed .Suppliers. Franchisee shall comply
with all of Franchisor's standards and specifications relating to the purchase of all food and beverage
items, (including the beverage brands that Franchisor requires), ingredients, supplies, materials, fixtures,
fumishings, exterior signage, equipment (including computer hardware and software) and other products
used or offered for sale at the Restaurant. Except as provided in Section VII.K. (relating to vehicles for
which Franchisor has no sourcing requirements) or as otherwise expressly approved by Franchisor in
writing, if we have approved suppliers for any such item (including manufacturers, distributors and other
sources), you must obtain these items from those suppliers. Franchisor's approved suppliers (which may
include or be limited to Franchisor and its affiliates) are those who continue to demonstrate the ability to
meet Franchisor's then-cunent standards and specifications for food and beverage items, ingredients,
supplies, materials, fixtures, fumishings, equipment and other items used or offered for sale at CiCi's
Pizza restaurants and who possess adequate quality controls and capacity to supply Franchisee's needs
and distribute promptly and reliably over an extended period of time; and who have been approved in
writing by Franchisor prior to any purchases by Franchisee from any such supplier and who have not
thereafter been disapproved by Franchisor. If Franchisee desires to purchase, lease or use any products
or other items from an unapproved supplier. Franchisee shall submit to Franchisor a written request for
such approval, or shall request the supplier itself to do so. Franchisee shall not purchase or lease from
DALO 1:1155855.41194849.3
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any supplier until and unless such supplier has been approved in writing by Franchisor. Franchisor shall
have the right to require that its representatives be permitted to inspect the supplier's facilities, and that
samples from the supplier be delivered, either to Franchisor or to an independent laboratory designated
by Franchisor for testing. A charge, not to exceed the cost o f the inspection and of the test (including
Franchisor's administrative costs attributable to both), shall be paid by Franchisee or the supplier.
Franchisor reserves the right, at its option, to re-inspect from time to time the facilities and products of
any such approved supplier and to revoke its approval upon the supplier's failure to continue to meet any
of Franchisor's then-cunent criteria. Nothing in the foregoing shall be constmed to require Franchisor to
approve any particular supplier, and Franchisor may, in its sole discretion, require any item used or
offered for sale at the Restaurant to be purchased exclusively from Franchisor, its afflliates or from a
single third party supplier or distributor. Franchisee acknowledges and agrees that fa^ Franchisor
mav chanpe the number of approved or designated suppliers at anv fime and mav designate
Franchisor, an affiliate, or a third nartv as the exclusive .source f o r anv particular item: (h^
Franchisor and/or its affiliates mav profit from Franchisee's purchases and leases from approved
or desipnated sunnliers and may receive payments, fees, commissions or reimbursements from
such suppliers in respect of Franchisee's purchases and leases. Franchisee'.^ failure to comply with
the provisions o f this Section VII.D. shall be deemed a material breach under this Agreement.
E.
Operational Requirements. To ensure that the highest degree of quality and service is
maintained. Franchisee shall operate the Restaurant in strict conformity with such methods, standards,
specifications, policies and procedures o f Franchisor as are set forth in the Manuals and as may from
time to time otherwise be prescribed in writing. In particular. Franchisee also agrees:
(1)
To sell or offer for sale all menu items, products and services required by
Franchisor (including, without limitation, beer and/or wine, i f permitted by applicable law and by
Franchisor) utilizing the method, manner and style of distribution prescribed by Franchisor. Distribution
methods cunently include dine-in, carry-out and catering, but no delivery. Any change in distribution
methods must be expressly authorized by Franchisor in writing, in the Manuals or otherwise. Franchisee
agrees to comply with the terms o f any such distribution program and, in connection therewith, to
execute such documents or instmments that Franchisor may deem necessary.
(2)
To sell and offer for sale only the menu items, products and services that have
been expressly approved for sale in writing by Franchisor; to discontinue selling and offering for sale any
menu items, products or services and any method, manner or style of distribution which Franchisor may,
in its sole discretion, disapprove in writing at any time; and to refrain from deviating from Franchisor's
standards and specifications without Franchisor's prior written consent.
(3)
To maintain in sufficient supply and to use and sell at all times only such food
and beverage items, ingredients, products, materials, supplies and paper goods that conform to
Franchisor's standards and specifications; to prepare all menu items in accordance with Franchisor's
recipes and procedures for preparation contained in the Manuals or other written directives, including,
but not limited to, the prescribed measurements o f ingredients; and to refrain from deviating from
Franchisor's standards and specifications by the use or offer of non-conforming items or differing
amounts o f any items, without Franchisor's prior written consent.
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(4)
To permit Franchisor or its agents, at any reasonable time, to remove a
reasonable number of samples of food or non-food items from Franchisee's inventory, or from the
Restaurant, without payment therefor, in amounts reasonably necessary for testing by Franchisor or an
independent laboratory to determine whether such samples meet Franchisor's then-cunent standards and
specifications. In addition to any other remedies it may have under this Agreement, Franchisor may
require Franchisee to bear the cost of such testing if the supplier of the item has not previously been
approved by Franchisor or if the sample fails to conform with Franchisor's specifications.
(5)
To purchase or lease and install all fixtures, fumishings, equipment (including
computer hardware and software), decor items, signs, delivery vehicles, and related items as Franchisor
may reasonably direct from time to time in the Manuals or otherwise in writing; and to refrain from
installing or permitting to be installed on or about the Restaurant premises, without Franchisor's prior
written consent, any fixtures, furnishings, equipment, delivery vehicles, decor items, signs, video or other
games, vending machines or other items not previously approved as meeting Franchisor's standards and
specifications, as set forth in the Manuals. If any of the property described above is leased by Franchisee
from a third party, such lease shall be approved by Franchisor, in writing, prior to execution.
Franchisor's approval shall be conditioned upon such lease containing a provision which permits any
interest of Franchisee in the lease to be assigned to Franchisor upon the termination or expiration of this
Agreement and which prohibits the lessor from imposing an assignment or related fee upon Franchisor in
connection with such assignment. Franchisor's specification, review or approval of any fixtures,
fumishings, equipment, or other items shall not constitute a wananty, express or implied, as to such item
and Franchisor shall not have any liability or responsibility with respect to the lack of suitability of, or
defects in, any such item.
(6)
To grant Franchisor and its agents the right to enter upon the Restaurant
premises and any Restaurant motor vehicles at any time for the purpose of conducting inspections; to
cooperate with Franchisor's representatives in such inspections by rendering such assistance as they may
reasonably request; and, upon notice from Franchisor or its agents and without limiting Franchisor's
other rights under this Agreement, to take such steps as may be necessary to conect immediately any
deficiencies detected during any such inspection, including, without limitation, any modification or
altemafion necessary to protect the System and/or the Marks. Should Franchisee, for any reason, fail to
conect such deficiencies within a reasonable time as determined by Franchisor, Franchisor shall have the
right and authority (without, however, any obligation to do so) to correct such deficiencies and charge
Franchisee a reasonable fee for Franchisor's expenses in so taking such conective action (including,
without limitation, any necessary reinspection), payable by Franchisee immediately upon demand. Any
inspection conducted by Franchisor shall not constitute any express or implied undertaking, wananty or
representation by Franchisor that the same comply with any building, life safety, environmental or other
codes imposed by any govemmental authority or that they comply with acceptable architectural or
engineering standards.
(7)
To maintain a competent, conscientious, trained staff and to take such steps as
are necessary to ensure that its employees preserve good customer relations and comply with such dress
code as Franchisor may prescribe.
(8)
To open and maintain the buffet in operation at all times specified by Franchisor
in the Manual or otherwise in writing.
(9)
To have on duty at the Restaurant during all hours of operation a Manager,
certified by Franchisor as having satisfactorily completed Franchisor's initial training program described
in Section VI.F. above, notwithstanding anything in this Agreement to the contrary.
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(10)
To participate, at Franchisee's expense, in the conduct of any test marketing and
mystery shopper or other customer satisfaction programs authorized by Franchisor.
F.
Point of Sale/Computer Systems. At Franchisor's discretion, Franchisee shall purchase,
install and maintain computer software designed for use in the operation of the Restaurant (and any
hardware required to mn such software) from a supplier that Franchisor designates and shall obtain any
upgrades, enhancements or replacements to the software or hardware that are developed from time to
time by or on behalf of Franchisor. Franchisee shall enter into all license or other agreements necessary
for Franchisee to obtain and maintain the right to use such software programs. Franchisee acknowledges
and agrees that Franchisor shall have electronic access to the information compiled and managed by such
software and hardware at the times and in the manner that Franchisor specifies.
G.
Proprietary Items. Franchisee acknowledges and agrees that Franchisor has developed
and may develop for use in the System certain products which are prepared from highly confidential
secret recipes and which are trade secrets of Franchisor. Because of the importance of quality and
uniformity of production and the significance of such products in the System, it is to the mutual benefit
of the parties that Franchisor closely control the production and distribution of such products.
Accordingly, Franchisee agrees that Franchisee shall use only Franchisor's secret recipe products and
shall purchase solely from Franchisor or from a source designated by Franchisor all of Franchisee's
requirements for such products. Franchisee further agrees to purchase from Franchisor or from a source
designated by Franchisor for resale certain promotional and other merchandise identifying the System as
Franchisor shall require, such as pre-packaged food products, T-shirts, sweatshirts, caps and other CiCi's
Pizza memorabilia in amounts sufficient to satisfy Franchisee's customer demand.
H.
Display of the Marks. Franchisee shall require al! advertising and promotional materials,
signs, decorations, paper goods (including menus and all forms and stationery used in the licensed
business), and other items which may be designated by Franchisor to bear the Marks in the form, color,
location and manner prescribed by Franchisor.
I.
Complaints: Claims: Health and Safety Violations. Franchisee shall process and handle
all consumer complaints connected with or relating to the Restaurant, and shall promptly notify
Franchisor by telephone and in writing of all of the following complaints: (i) food related illnesses, (ii)
safety or health violations, (iii) claims exceeding $1,000, and (iv) any other material claims against or
losses suffered by Franchisee. Franchisee shall maintain for Franchisor's inspection any inspection
reports affecting the Restaurant or equipment located in the Restaurant during the term of this Agreement
and for thirty (30) days after the expiration or earlier termination hereof.
JT
Powers of Attorn^—Upon the execution of this Agreement or at any time
thereafter^ Fronchisee shall, nt the option of Fronchisor, execute such forms and documents as
Franchisor deems nccessar;^ to appoint Fronchisor its true ond lawful attorney in fact with full
power and authority for the purpose of (i) assigning to Fronchisor all rights to the tclephonG
numbers of the Restaurant, any related Yellow Pages trademark listings, and oil rights to ony
WcbsiteS) Ustings^ services^ search engines or systems ond any other business listings related to the
Restaurant upon the terminotion or expiration of this Agreement, os required under Section
XVIII.; and (ii) obtoining any and oil returns and reports you file with any local, state or federal
taxing authority.
K.
Vehicles. Any vehicle used by Franchisee to deliver Restaurant
products and services to customers shall meet Franchisor's standards with respect to appearance and
ability to satisfy the requirements imposed on Franchisee hereunder. Franchisee shall place such signs
and decor items on the vehicle as Franchisor requires and shall at all times keep such vehicle clean and in
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good working order. Franchisee shall not engage or utilize any individual in the operation of a motor
vehicle in connection with providing services hereunder who is under the age of eighteen (18) years or
who does not possess a valid driver's license under the laws of the state in which Franchisee provides
such services. Franchisee shall require each such individual to comply with all laws, regulations and
rules of the road and to use due care and caution in the operation and maintenance of motor vehicles.
Except as noted above. Franchisor does not set forth any standards or exercise control over any motor
vehicle utilized by Franchisee. The parties understand and agree that Franchisor cannot and does not
exercise control over the manner of operation of any motor vehicles used by, or on behalf of, Franchisee
or any employee, agent or independent contractor of Franchisee and that the safe operation of any motor
vehicle is, therefore. Franchisee's responsibility.
VIH.
ADVERTISING AND RELATED FEES
Recognizing the value of advertising and the importance of the standardization of advertising
programs to the furtherance of the goodwill and public image of the System, the parties agree as follows:
A.
Participation in Advertising and Promotional Programs. Franchisor may from time to
time develop and administer advertising and sales promotion programs designed to promote and enhance
the collective success of all restaurants operating under the System, including, without limitation,
national, regional or local programs that promote particular products, or gift card or other customer
loyalty programs. Franchisee shall participate in all such advertising and sales promotion programs in
accordance with the terms and conditions established by Franchisor for each program. In all aspects of
these programs, including, without limitation, the type, quantity, timing, placement and choice of media,
market areas and advertising agencies, the standards and specifications established by Franchisor shall be
final and binding upon Franchisee. In addition and at Franchisor's request, Franchisee agrees to keep
visible at the Restaurant in such place or places as Franchisor may designate a display, counter card,
brochures or such other items promoting CiCi's Pizza franchises as Franchisor may require, so long as
Franchisor provides such materials to Franchisee without charge.
B.
Local Advertising.
(1)
In addition to the ongoing advertising contributions set forth herein. Franchisee
may spend such amounts on advertising for the Restaurant in its Protected Area ("Local Advertising") as
Franchisee may from time to time determine to be appropriate, all of which shall be subject to the
requirements of Section VIII.G. At Franchisor's request. Franchisee shall submit to Franchisor an
advertising expenditure report accurately reflecting such expenditures at the same time as the report
itemizing Net Sales described in Section IV.C.
(2)
Notwithstanding Section VIII.B.(l) and subject to any allocation of Franchisee's
expenditures for Local Advertising to the Cooperative described in Section VIII.D. of this Agreement or
reallocation to the Fund described in Section VIII.C, Franchisor reserves the right to require Franchisee
to spend, during each month throughout the term of this Agreement, up to two percent (2%) of Net Sales
on Local Advertising, in addition to any amounts required in Section VIII.C, all of which shall be
subject to the requirements of Section VIII.G.
Franchisee shall submit to Franchisor an advertising
expenditure report accurately reflecting such expenditures at the same time as the report itemizing Net
Sales described in Section IV.C. Costs and expenditures incuned by Franchisee in connection with any
ofthe following shall not be included in Franchisee's expenditures on Local Advertising for purposes of
this Section, unless approved by Franchisor in writing:
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(a)
Incentive programs for employees or agents of Franchisee, including the
cost of honoring any coupons distributed in connection with such programs;
(b)
Research expenditures;
(c)
Food costs incuned in any promotion;
(d)
Salaries and expenses of any employees of Franchisee, including salaries
or expenses for attendance at advertising meetings or activities;
(e)
Charitable, political or other contributions or donations;
(f)
Press parties or other expenses of publicity;
(g)
In-store materials consisting offixturesor equipment;
(h)
Seminar and educational costs and expenses of employees of Franchisee;
(i)
Specialty items such as T-shirts, premiums, pins and awards, unless such
items are part of a market-wide advertising program and then only to the extent that the cost of
such items is not recovered by the promotion.
C.
Advertising Fund. In addition to any amounts spent by Franchisee on advertising
pursuant to any other provision of this Agreement, for each Accounting Period Franchisee shall make
contributions to an advertising fund administered by the Franchisor or its designee ("Designee") for the
purpose of advertising the System (or any aspect thereof) and the CiCi's Mark on a regional or national
basis (the "Fund") in an amount equal to the greater of (i) Two Thousand Three Hundred Dollars
($2,300) or (ii) three percent (3%) of Net Sales of the Restaurant. The Fund contribution shall to be paid
by Franchisee on the fifth (5"") business day (as defined in Section IV.B.) following the end of each
Accounting Period via electronic funds transfer, or such other means as may be specified by Franchisor.
There are three (3) "Accounting Periods" in each calendar quarter. The first Accounting Period in each
quarter is five (5) weeks, and the remaining two (2) accounting periods in the quarter are four (4) weeks
each. During the fourth (4th) quarter of each calendar year during the term hereof. Franchisor will notify
Franchisee of any increase in the flat dollar amount component of the Fund contribution (that is, the
$2,300). The increase (if any) will be based on the percentage change in the Standard Quotations and
Data (SQAD) resource for most recently ended twelve (12)-month period from October 1 through
September 30 and will be effective as of January of the following calendar year. Franchisor may, in its
sole discretion, subsfitute another comparable national, regional or market media index for the SQAD
index if Franchisor determines it to be appropriate. If Franchisor does so, Franchisor will also nofify
Franchisee of any change in the media index during the fourth (4th) quarter of the calendar year to take
effect the following calendar year. During the term of this Agreement, Franchisor may, in its sole
discretion, require Franchisee to allocate or reallocate all or any portion of Franchisee's required
contributions hereunder to expenditures for Local Advertising described in Section VIILB.(2) or. to a
Cooperative as described in Section VIII.D.
Franchisee agrees that the Fund shall be maintained and administered by Franchisor or its
Designee as follows:
(I)
Franchisor shall direct all advertising programs and shall have sole discretion to
approve or disapprove the creative concepts, materials and media used in such programs and the
DALO 1 1155855.41194849.3
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placement and allocation thereof Franchisee agrees and acknowledges that the Fund is intended to
maximize general public recognition and acceptance of the CiCi's Mark and other authorized Marks.
Franchisor shall, with respect to CiCi's Pizza restaurants operated by Franchisor or any afflliate,
contribute to the Fund generally on the same basis as Franchisee. In administering the Fund, Franchisor
and its Designee undertake no obligation to make expenditures for Franchisee which are equivalent or
proportionate to Franchisee's contribution or to ensure that any particular Franchisee benefits directly or
pro rata from the placement of advertising.
(2)
Franchisee agrees that the Fund may be used to satisfy any and all costs of
maintaining, administering, directing, preparing and placing advertising (including, without limitation,
the cost of preparing and conducting television, radio, magazine and newspaper advertising campaigns;
website development, digital media and social media, maintenance and updating; direct mail and outdoor
billboard advertising; public relations activities; employing advertising and/or public relations agencies;
digital and social media; and personnel and other departmental costs for advertising that is administered
or prepared by Franchisor or its Designee). All sums paid by Franchisee to the Fund shall be maintained
in a separate account by Franchisor or its Designee and shall not be used to defray any of their general
operating expenses, except for such reasonable administrative costs and overhead, if any, Franchisor or
its Designee may incur in activities reasonably related to the administration or direction of the Fund and
advertising programs for Franchisees and the System. The Fund and its eamings shall not otherwise
inure to the benefit of Franchisor or its Designee. The Fund is operated solely as a conduit for collecting
and expending the advertising fees as outlined above.
(3)
A statement of the operations of the Fund shall be prepared annually by
Franchisor and shall be made available to Franchisee upon request.
(4)
Although the Fund is intended to be of perpetual duration. Franchisor may
terminate the Fund. The Fund shall not be terminated, however, until all monies in the Fund have been
expended for advertising or promotional purposes or retumed to all contributors, without interest, on the
basis of their respective contributions.
D.
Cooperatives. Franchisee agrees that Franchisor shall have the right, in its sole
discretion, to designate any geographic area in which two (2) or more CiCi's ?\22z restaurants are located
as a region for purposes of establishing an advertising cooperative ("Cooperative"). The members of the
Cooperative for any area shall, at a minimum, consist of all CiCi's Pizza restaurants within such area.
Each Cooperative shall be organized and govemed in a form and manner, and shall commence operation
on a date, determined in advance by Franchisor in its sole discretion. Each Cooperative shall be
organized for the exclusive purposes of administering advertising programs and developing, subject to
Franchisor's approval pursuant to Section VIII.G., promotional materials for use by its members in Local
Advertising. If at the time of the execution of this Agreement a Cooperative has been established for a
geographic area that encompasses the Restaurant, or if any such Cooperative is established during the
term of this Agreement, Franchisee shall execute such documents as are required by Franchisor
immediately upon the request of Franchisor and shall become a member of the Cooperative pursuant to
the terms of those documents. Franchisee shall participate in the Cooperative as follows:
(1)
Subject to any reallocation of Franchisee's Cooperative contribution to the Fund
described in Section VIII.C, Franchisee shall contribute to the Cooperative such amounts required by the
documents goveming the Cooperative; provided that Franchisee's required Cooperative conttibution
shall not increase the total required advertising contribution or payment by Franchisee under Section
VIII.C. of this Agreement, and the payment of any such required Cooperative contribution shall be
applied toward satisfaction of the Franchisee's Local Advertising requirement set forth in Section
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079684.0103
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VIII.B.(2) and the Franchisee's Fund contribution set forth in Section VIII.C. Notwithstanding the
preceding sentence, however, and subject to Franchisor's approval, the members of the Cooperative may
agree to the payment of a larger Cooperative contribution. In such event, the excess of any such
contribution over the amount of the contribution required by the documents goveming the Cooperative
shall not be applied toward satisfaction of Franchisee's Local Advertising requirement set forth in
Section VIII.B.(2) or the Franchisee's Fund contribution set forth in Section VIII.C.
(2)
Franchisee shall submit to the Cooperative and to Franchisor such statements
and reports as may be required by Franchisor or by the Cooperative. All contributions to the
Cooperative shall be maintained and administered in accordance with the documents goveming the
Cooperative. The Cooperative shall be operated solely as a conduit for the collection and expenditure of
the Cooperative fees for the purposes above; and
(3)
No advertising or promotional plans or materials may be used by the Cooperative
or fumished to its members without the prior approval of Franchisor. All such plans and materials shall
be submitted to Franchisor in accordance with the procedure set forth in Section VIII.G.
E.
Grand Opening. Franchisee shall carry out a grand opening promotion relating to the
opening of the Restaurant as specified by Franchisor in accordance with the Manuals or otherwise in
wrifing. All advertising items and methods (including, without limitation, the media) used by Franchisee
in connection with such grand opening promotion must be approved by Franchisor in accordance with
Section VIII.G. Amounts paid by Franchisee for the initial grand opening promotion shall not be
credited toward any other obligation of Franchisee in this Section VIII.
F.
Yellow Pages. Franchisee shall also place in the Restaurant's local market area and pay
the cost of a Yellow Pages trademark listing and other business listings in such directories and categories
as may be specified by the Franchisor from time to time in the Manuals or otherwise in writing. Any
amount paid by Franchisee for such Yellow Pages trademark or other business listings shall be in
addition to Franchisee's other advertising requirements under this Agreement.
G.
Advertising Approval. All advertising and promotion by Franchisee in any medium shall
be conducted in a dignified manner and shall conform to the standards and requirements of Franchisor as
set forth in the Manuals or otherwise in writing. Franchisee shall obtain Franchisor's approval of all
advertising and promotional plans and materials (including, without limitation, those placed on the
Intemet pursuant to Section VIII.I.) prior to use if such plans and materials have not been prepared by
Franchisor or previously approved by Franchisor during the twelve (12) months prior to their proposed
use. Franchisee shall submit such unapproved plans and materials to Franchisor, and Franchisor shall
approve or disapprove such plans and materials within fourteen (14) days of Franchisor's receipt thereof
Franchisee shall not use such unapproved plans or materials until they have been approved by Franchisor,
and shall promptly discontinue use of any advertising or promotional plans or materials, whether or not
previously approved, upon notice from Franchisor.
H.
Pricing. Franchisor reserves the right, to the fullest extent allowed by applicable law, to
establish maximum, minimum or other pricing requirements with respect to the prices that Franchisee
may charge for products and services.
I.
Intemet Website. Franchisee shall have no authority to and shall not establish any
website or listing on the Intemet or World Wide Web:
DALO 1:11S5855.41194849.3
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(1)
Franchisor has established, or may establish, and maintains an Intemet Website
that provides information about the System and the products that CiCi's Pizza restaurants provide.
Franchisor will have sole discretion and control over the Website (including timing, design, contents and
continuation). Franchisor may use part of the Fund monies it collects under Section VIII.C. to pay or
reimburse the costs associated with the development, maintenance and update of the Website.
(2)
Franchisor may (but is not required to) include at the Website an interior page
containing information about the Restaurant.
(3)
Franchisor also shall have the sole right (but no obligation) to develop an
Intranet network through which Franchisor and its franchisees can communicate by e-mail or similar
electronic means. If Franchisor develops such an Intranet network, Franchisee agrees to use the CiCi's
Intranet in strict compliance with the standards, protocols and restrictions that Franchisor includes in the
Manual (including, without limitation, standards, protocols and restrictions relating to the encryption of
Confidential Information and prohibifions against the transmission of libelous, derogatory or defamatory
statements).
(4)
An "Internef is a global computer-based communications network.
"Intranet" is a restricted global computer-based communications network.
An
J.
Assignment and Authorization. Franchisee shall execute the Assignment and
Authorization attached as Attachment F to this Agreement which evidences Franchisee's consent to the
payment by certain beverage suppliers to Franchisor of rebates based on beverage purchases made by
Franchisee. Franchisee acknowledges that a portion of such rebates will be directed to the Fund.
IX.
MARKS
A.
Right to Use the Marks. Franchisor grants Franchisee the right to use the Marks during
the term ofthis Agreement in accordance with the System and related standards and specifications.
B.
Agreements Regarding the Marks. Franchisee expressly understands and acknowledges
that:
(1)
As between Franchisor and Franchisee, Franchisor is the owner of all right, fitle
and interest in and to the Marks and the goodwill associated with and symbolized by them.
(2)
Neither Franchisee nor any Controlling Principal shall take any acfion that would
prejudice or interfere with the validity of Franchisor's rights with respect to the Marks. Nothing in this
Agreement shall give the Franchisee any right, title, or interest in or to any of the Marks or any of
Franchisor's service marks, trademarks, trade names, trade dress, logos, copyrights or proprietary
materials, except the right to use the Marks and the System in accordance with the terms and condifions
of this Agreement for the operation of the Restaurant and only at or from its Approved Location or in
approved advertising related to the Restaurant.
(3)
Franchisee understands and agrees that any and all goodwill arising from
Franchisee's use of the Marks and the System shall inure solely and exclusively to Franchisor's benefit,
and upon expiration or terminafion of this Agreement and the license herein granted, no monetary
amount shall be assigned as attributable to any goodwill associated with Franchisee's use of the Marks.
DALQV.imss&AmM^
079684.0103
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(4)
Franchisee shall not contest the validity of Franchisor's or any of its affiliates'
interest in the Marks or assist others to contest the validity of Franchisor's or any of its affiliates' interest
in the Marks.
(5)
Franchisee acknowledges that any unauthorized use of the Marks shall constitute
an infringement of Franchisor's rights in the Marks and a material breach hereunder. Franchisee agrees
that it shall provide Franchisor with all assignments, affidavits, documents, information and assistance
Franchisor reasonably requests to fully vest in Franchisor all such rights, title and interest in and to the
Marks, including all such items as are reasonably requested by Franchisor to register, maintain and
enforce such rights in the Marks.
(6)
Franchisor reserves the right to substitute different Marks for use in identifying
the System and the Restaurant if Franchisor's cunent Marks no longer can be used, or if Franchisor, in its
sole discretion, determines that substitution of different Marks will be beneficial to the System. In such
event. Franchisor may require Franchisee to discontinue or modify Franchisee's use ofany ofthe Marks
or to use one or more additional or substitute Marks.
C.
Use of the Marks. With respect to Franchisee's use of the Marks licensed pursuant to
this Agreement, Franchisee further agrees that:
(1)
Unless otherwise authorized or required by Franchisor, Franchisee shall operate
and advertise the Restaurant only under the name "CiCi's" without prefix or suffix. Franchisee shall not
use the Marks as part of its corporate or other legal name.
(2)
During the term of this Agreement and any renewal hereof, Franchisee shall
identify itself as the owner of the Restaurant in conjunction with any use of the Marks, including, but not
limited to, uses on invoices, order forms, receipts and contracts, as well as the display of a notice in such
content and form and at such conspicuous locations on the premises of the Restaurant or any Restaurant
delivery vehicle as Franchisor may designate in writing.
(3)
behalf of Franchisor.
Franchisee shall not use the Marks to incur any obligation or indebtedness on
(4)
Franchisee shall comply with Franchisor's instmcfions in filing and maintaining
the requisite trade name or fictitious name registrations, and shall execute any documents deemed
necessary by Franchisor or its counsel to obtain protection of the Marks or to maintain their continued
validity and enforceability.
(5)
Franchisee acknowledges that Franchisor is the lawful, rightful and sole owner
of the Intemet domain named "www.cicispizza.com," "www.cicis.com," "www.cicistrucking.com" and
any other Intemet domain names registered by Franchisor, and unconditionally disclaims any ownership
interest in those or any colorably similar Intemet domain name. Franchisee agrees not to register any
Intemet domain name in any class or category that contains words used in or similar to any brand name
owned by Franchisor or its affiliates or any abbreviation, acronym, phonetic variation or visual variation
of those words.
(6)
Franchisee shail not use the Marks or any abbreviation or other name associated
with Franchisor or the System as part of any e-mail address, domain name, or other identification of
Franchisee in any electronic medium. Franchisee agrees not to transmit or cause any other party to
transmit advertisements or solicitations by e-mail or other electronic media without first obtaining
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Franchisor's written consent as to the content of such e-mail advertisements or solicitations as well as
Franchisee's plan for transmitting such advertisements. In addition. Franchisee shall be solely
responsible for compliance with any laws pertaining to sending e-mails including but not limited to the
Controlling the Assault of Non-Solicited Pomography and Marketing Act of 2003 (the "CAN-SPAM Act
of 2003").
D.
InfringemenL Franchisee shall notify Franchisor immediately of any apparent
infringement of or challenge to Franchisee's use of any Mark, of any claim by any person of anyrightsin
any Mark, and Franchisee and the Controlling Principals shall not communicate with any person other
than Franchisor or any designated affiliate thereof, their counsel and Franchisee's counsel in connection
with any such infringement, challenge or claim. Franchisor shall have complete discrefion to take such
action as it deems appropriate in connection with the foregoing, and the right to control exclusively, or to
delegate control to any of its afflliates of, any settlement, litigation or Patent and Trademark Office or
other proceeding arising out of any such alleged infringement, challenge or claim or otherwise relating to
any Mark. Franchisee agrees to execute any and all instruments and documents, render such assistance,
and do such acts or things as may, in the opinion of Franchisor, reasonably be necessary or advisable to
protect and maintain the interests of Franchisor or any affiliate in any litigation or Patent and Trademark
Office or other proceeding or to otherwise protect and maintain the interests of Franchisor or any other
interested party in the Marks. Franchisor will indemnify Franchisee against and reimburse Franchisee for
all damages for which Franchisee is held liable in any proceeding arising out of Franchisee's use ofany
of the Marks (including settlement amounts), provided that the conduct of Franchisee and the Controlling
Principals with respect to such proceeding and use of the Marks is in full compliance with the terms of
this Agreement.
E.
Scope ofLicense. The right and license of the Marks granted hereunder to Franchisee is
nonexclusive and Franchisor and its afflliates thus have and retain the following rights, among others,
subject only to the limitations of Section I.:
(1)
To grant other licenses for use of the Marks, in addition to those licenses already
granted to existing Franchisees;
(2)
To develop and establish other systems using the Marks or other names or marks
and to grant licenses thereto without providing any rights to Franchisee; and
(3)
To engage, directly or indirectly, through their employees, representatives,
licensees, assigns, agents and others, at wholesale, retail or otherwise, in (1) the producfion, distribution,
license and sale of products and services, and (2) the use in connection with such production, distribution
and sale, of the Marks and any and all trademarks, trade names, service marks, logos, insignia, slogans,
emblems, symbols, designs and other identifying characteristics as may be developed or used from time
to time by Franchisor.
X.
CONFIDENTIALITY AND NONCOMPETITION COVENANTS
A.
Manuals.
(1)
To protect the reputation and goodwill of Franchisor and to maintain high
standards of operation under Franchisor's Marks, Franchisee shall conduct its business in accordance
with the Manuals, other written directives which Franchisor may issue to Franchisee from time to time
whether or not such directives are included in the Manuals, and any other manuals and materials created
or approved for use in the operation of the licensed business.
DALO 1 1155855.41194849.3
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(2)
Franchisee and the Controlling Principals shall at all times treat the Manuals,
any written directives of Franchisor, and any other manuals and materials, and the information contained
therein, as confidential and shall maintain such information as secret and confidential in accordance with
this Secfion X. Franchisee and the Controlling Principals shall not at any time copy, duplicate, record or
otherwise reproduce these materials, in whole or in part, or otherwise make the same available to any
unauthorized person.
(3)
The Manuals, wrirten directives, other manuals and materials and any other
confidential communications provided or approved by Franchisor shall at all times remain the sole
property of Franchisor, shall at all times be kept in a secure place on the Restaurant premises, and shall
be retumed to Franchisor immediately upon request or upon termination or expiration of this Agreement.
(4)
The Manuals, any wrirten direcfives, and any other manuals and materials issued
by Franchisor and any modifications to such materials shall supplement this Agreement.
(5)
Franchisor may from time to time revise the contents of the Manuals and the
contents ofany other manuals and materials created or approved for use in the operation of the licensed
business. Franchisee expressly agrees to comply with each new or changed standard.
(6)
Franchisee shall at all times ensure that the Manuals are kept cunent and up to
date. In the event of any dispute as to the contents of the Manuals, the terms of the master copy of the
Manuals maintained by Franchisor at Franchisor's corporate office shall control.
(7)
Franchisor will charge a replacement fee of One Hundred Dollars ($100.00) for
any replacement Manuals requested by Franchisee.
B.
Confidentiality. Neither Franchisee nor any Controlling Principal shall, during the term
of this Agreement and thereafter, communicate, divulge or use for the benefit of any other person,
persons, partnership, limited liability company, association or corporation and, following the expiration
or termination ofthis Agreement, or the transfer of their interest in this Agreement, they shall not use for
their own benefit, any confidential or proprietary information, trade secrets, knowledge or know-how
conceming the methods of conducting the business contemplated by this Agreement, including without
limitation the methods of establishing and operating a CiCi's Pizza restaurant and other information
contained in the Manuals or otherwise disclosed or communicated to them or of which they may be
apprised under the terms of this Agreement ("Confidential Information"). Any and all information,
knowledge, know-how, techniques and any materials used in or related to the System which Franchisor
provides to Franchisee in connection with this Agreement shall be deemed Confidential Information for
purposes ofthis Agreement Franchisee and the Controlling Principals shall divulge such Confidential
Informafion only to such of Franchisee's employees as must have access to it in order to operate the
Restaurant. Neither Franchisee nor the Controlling Principals shall at any time, without Franchisor's
prior written consent, copy, duplicate, record or otherwise reproduce such Confidential Informafion, in
whole or in part, nor otherwise make the same available to any unauthorized person. The covenant in
this Section shall survive the expiration, termination or transfer of this Agreement or any interest herein
and shall be perpetually binding upon Franchisee and each of the Controlling Principals.
(1)
At Franchisor's request, Franchisee shall require and obtain execution of
covenants similar to those set forth in Section X.B. from its Operator, General Manager, Assistant
Managers and any other personnel of Franchisee who have received or will have access to Confidential
Information, and any holder of a beneficial interest in Franchisee who is not designated as a Controlling
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Principal and does not execute this Agreement as a Controlling Principal. Such covenants shall be
substantially in the form set forth in Attachment D. All of Franchisee's Principals must also execute
such covenants.
(2)
If Franchisee or the Controlling Principals develop any new concept, process or
improvement in the operation or promotion of the Restaurant, Franchisee is required to promptly notify
Franchisor and provide Franchisor with all necessary related information, without compensation.
Franchisee and the Controlling Principals acknowledge that any such concept, process or improvement
will become the property of Franchisor, and Franchisor may use or disclose such information to other
Franchisees as it determines to be appropriate.
C.
Noncompetition Covenants. Franchisee and the Controlling Principals specifically
acknowledge that, pursuant to this Agreement, Franchisee and the Controlling Principals will receive
valuable training and Confidential Information which are beyond their present skills and experience,
including, without limitation, information regarding operational, sales, promotional and marketing
methods and techniques of Franchisor and the System. Franchisee and the Controlling Principals
acknowledge that (i) such specialized training and Confidential Information provide a competitive
advantage and will be valuable to them in the development and operation of the Restaurant, and (ii)
gaining access to such specialized training and Confidential Information is, therefore, a primary reason
for entering into this Agreement. In consideration for such specialized training, Confidential Information
and rights, Franchisee and the Controlling Principals covenant that:
(1)
With respect to Franchisee, during the term of this Agreement (or with respect to
each of the Controlling Principals, during the term of this Agreement for so long as such individual or
entity remains a Controlling Principal), except as otherwise approved in writing by Franchisor, neither
Franchisee nor any of the Controlling Principals shall, either directly or indirectly, for themselves or
through, on behalf of or in conjunction with any person, persons, partnership, limited liability company,
corporation or other entity or association:
(a)
Divert, or attempt to divert, any business or customer of the Restaurant
to any competitor, by direct or indirect inducement or otherwise, or do or perform, directly or
indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and
the System.
(b)
Except with respect to facilities operated under valid Franchise
Agreements with Franchisor, own, maintain, operate, engage in, be employed by or have any
financial or beneficial interest in (including any interest in limited liability companies,
corporations, partnerships, trusts, unincorporated associations or joint ventures), advise, assist,
aid, make loans to, or otherwise support, any business located within the United States, its
tenitories or commonwealths, or any other country, province, state or geographic area in which
Franchisor has used, sought registration of or registered the Marks or the same or similar marks
or operates or licenses others to operate a business under the Marks or the same or similar marks,
which business (i) is of a charocter and concept similar to CiCi's brand food service
fflcilities,--including-tt--business---which-offefs-as-a-primary—menu—item-or--mix—of-nienukemsderives more than fiftv percent (50%^ of its revenue from selling pizza (including, but
not limited to, fresh, frozen or unbaked pizza) and other Italian foods using the distribution
methods (including dine-in, carry-out or catering) authorized by Franchisor, or (ii) functions as a
commissary to sell or lease to or supply any such business.
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(2)
With respect to Franchisee and for a continuous unintermpted period
commencing upon the expiration, termination, or transfer of all of Franchisee's interest in this Agreement
(or, with respect to each of the Controlling Principals, commencing upon the earlier of (i) the expiration,
termination, or transfer of all of Franchisee's interest in this Agreement or (ii) the time such individual or
entity ceases to be a Controlling Principal) and continuing for two (2) years thereafter, except as
otherwise approved in writing by Franchisor, neither Franchisee, nor any of the Controlling Principals
shall, directly or indirectly, for themselves, or through, on behalf of or in conjunction with any person,
persons, partnership, limited liability company, corporation or other entity or association:
(a)
Divert, or attempt to divert, any business or customer of the Restaurant
to any competitor, by direct or indirect inducement or otherwise, or do or perform, directly or
indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and
the System.
(b)
Employ, or seek to employ, any person who is at that time or was within
the preceding sixty (60) days employed by Franchisor or by any other developer or franchisee of
Franchisor, or otherwise directly or indirectly induce such person to leave that person's
employment.
(c)
Except with respect to facilities operated under valid Franchise
Agreements with Franchisor, own, maintain, operate, engage in, be employed by or have any
financial or beneficial interest in (including any interest in limited liability companies,
corporations, partnerships, tmsts, unincorporated associations or joint ventures), advise, assist,
aid, make loans to, or otherwise support any business that (i) is of o character and concept
similar—to-CiCi's brand food scrvice-faeilities, including a—business which offers-as-aprimarv menu item or mix of menu itemsdcrives more than fifty ^50%^ of its revenue from
se^^H}T pizza (including, but not limited to, fresh, frozen or unbaked pizza) ond other Itolian
faeds-using the distribution methods (including dine-in, cany-out or catering) authorized by
Franchisor, or (ii) functions as a commissary to sell or lease to or supply any such business and
which is located, or is intended to be located:
(!)
at the Approved Location; or
(2)
within the Protected Area; or
(3)
i f this Agreement is executed pursuant to a development
agreement, within the development tenitory; or
(4)
within a twentvten (201fl) mile radius of (A) the Approved
Locafion, (B) the Protected Area, (C) the development tenitory, if applicable, or (D) any
CiCi's brand food service facility in existence or under constmction as of the earlier of
(x) the expiration or termination of, or the transfer of all of Franchisee's interest in, this
Agreement; or (y) the time a Controlling Principal ceases to satisfy the definition of
Controlling Principal, as applicable.
(3)
The parties acknowledge and agree that each of the covenants contained herein
contain reasonable limitations as to time, geographical area and scope of activity to be restrained and do
not impose a greater restraint than is necessary to protect the goodwill or other business interests of
Franchisor. The parties agree that each of the covenants herein shall be constmed as independent of any
other covenant or provision of this Agreement. If all or any portion of a covenant in this Section is held
DALO 111155855.41194849.3
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unreasonable or unenforceable by a court or agency having valid jurisdiction in an unappealed final
decision to which Franchisor is a party, Franchisee and the Controlling Principals expressly agree to be
bound by any lesser covenant subsumed within the terms of such covenant that imposes the maximum
duty permitted by law, as if the resulting covenant were separately stated in and made a part of this
Section.
(a)
Franchisee and the Controlling Principals understand and acknowledge
that Franchisor shall have the right, in its sole discretion, to reduce the scope of any covenant set
forth in this Section X.C, or any portion thereof, without their consent, effective immediately
upon notice to Franchisee; and Franchisee and the Controlling Principals agree that they shall
promptly comply with any covenant as so modified, which shall be fully enforceable
notwithstanding the provisions of Section XIX.B. hereof
(b)
Franchisee and the Controlling Principals expressly agree that the
existence of any claims they may have against Franchisor, whether or not arising from this
Agreement, shall not constitute a defense to the enforcement by Franchisor of the covenants in
this Section.
(4)
At Franchisor's request. Franchisee shall require and obtain execution of
covenants similar to those set forth in this Section X.C. (including covenants applicable upon the
termination of a person's employment with Franchisee) from its Operator, General Manager, Assistant
Managers and any personnel of Franchisee who have received or will have access to training from
Franchisor. Such covenants shall be substantially in the form set forth in Attachment D. All of
Franchisee's Principals must also execute such covenants, provided that Franchisor reserves the right, in
its sole discretion, to decrease the period of time or geographic scope of the noncompetition covenant set
forth in Attachment D, or to eliminate such noncompetition covenant altogether for any party required to
execute such agreement under this Section X.C.(4).
D.
Iniunctive Relief Franchisee and the Controlling Principals acknowledge that any
failure to comply with the requirements of this Section shall constitute a material breach under Section
XVII. hereof Franchisee and the Controlling Principals acknowledge that a violation ofthe terms of this
Section would result in irreparable injury to Franchisor for which no adequate remedy at law may be
available, and Franchisee and the Controlling Principals accordingly consent to the issuance of an
injunction prohibiting any conduct by Franchisee or the Controlling Principals in violation of the terms
of this Section. Franchisee and the Controlling Principals agree to pay all court costs and reasonable
attorneys' fees incuned by Franchisor in connection with the enforcement of this Section, including
payment of all costs and expenses for obtaining injunctive relief or any other remedy available to
Franchisor for any violation of the requirements of this Section.
XI.
BOOKS AND RECORDS
A.
Maintenance Requirement. Franchisee shall maintain during the term of this Agreement,
and shall preserve for at least five (5) years from the dates of their preparation, full, complete and
accurate books, records and accounts, including, but not limited to, sales slips, coupons, purchase orders,
payroll records, check stubs, bank statements, sales tax records and retums, cash receipts and
disbursements, joumals and ledgers in accordance with generally accepted accounting principles and in
the form and manner prescribed by Franchisor from time to time in the Manuals or otherwise in writing.
B.
Reporting. In addition to the remittance reports required by Sections IV. and VIII.
hereof, Franchisee shall comply with the following reporting obligations:
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(1)
Franchisee shall submit to Franchisor, in the form prescribed by Franchisor,
Franchisee's monthly balance sheet and profit and loss statement (which may be unaudited) and
Franchisee's monthly sales tax retum for the Restaurant within twenty (20) days after the end of each
month during the term hereof. Each such statement shall be signed by Franchisee's treasurer, chief
financial officer or comparable officer attesting that it is tme, complete and correct;
(2)
Franchisee shall provide to Franchisor Franchisee's complete annual financial
statement (which, at Franchisor's request, must be audited), including a balance sheet, profit and loss
statement, and statement of cash flows, prepared in accordance with generally accepted accounting
principles by an independent certified public accountant satisfactory to Franchisor and showing the
results of operations of Franchisee during such fiscal year, within sixty (60) days after the end of each
fiscal year of Franchisee during the term hereof; and
(3)
Franchisee shall also submit to Franchisor (or, at Franchisor's direction, to a
third party designated by Franchisor to maintain and/or process such information for a fee), for review or
auditing, such other forms, reports, records, information and data as Franchisor may reasonably
designate, in the form and at the times and places reasonably required by Franchisor, upon request and as
specified from time to time in writing.
C.
Audits. Franchisor or its designees shall have the right at all reasonable times to review,
audit, examine and copy the books and records of Franchisee as Franchisor may require at the Restaurant.
If any required royalty payments to Franchisor are delinquent, or if an inspection should reveal that such
payments have been understated in any report to Franchisor, then Franchisee shall immediately pay to
Franchisor the amount overdue or understated upon demand with interest determined in accordance with
the. provisions of Section IV.E. I f an inspection discloses an understatement in any report of three
percent (3%) or more. Franchisee shall, in addition, reimburse Franchisor for all costs and expenses
connected with the inspection (including, without limitation, reasonable accounting and attomeys' fees).
These remedies shall be in addition to any other remedies Franchisor may have at law or in equity.
D.
No Waiver. Franchisee understands and agrees that the receipt or acceptance by
Franchisor of any of the statements fumished or royalties paid to Franchisor (or the cashing of any
royalty checks) shall not preclude Franchisor from questioning the conectness thereof at any time and, in
the event that any inconsistencies or mistakes are discovered in such statements or payments, they shall
immediately be rectified by the Franchisee and the appropriate payment shall be made by the Franchisee.
E.
Authorization to Release Information. Franchisee hereby authorizes (and agrees to
execute any other documents deemed necessary to effect such authorization) all banks, financial
institutions, businesses, suppliers, manufacturers, contractors, vendors and other persons or entities
(including, without limitation, the providers of data warehouse services) with which Franchisee does
business to disclose to Franchisor any requested financial information in their possession relating to
Franchisee or the Restaurant. Franchisee authorizes Franchisor to disclose data from Franchisee's
reports, i f Franchisor determines, in its sole discretion, that such disclosure is necessary or advisable,
which disclosure may include disclosure to prospective or existing Franchisees or other third parties.
FJ
Power of Attorn^—Notwithstanding any forms and documents which may hove
been executed by Franchisee under Section VII.J., Franchisee hereby appoints Franchisor its true
and lawful attorney in fact with full power and authority, for the sole purpose of obtaining any
and oil returns and reports filed by Franchisee with ony stote and/or federol taxing outhority. This
power of attorney shall sunivc the expiration or termination ofthis Agreement.
DALOl :H5585fc41i24Si2^
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XH,
INSURANCE
A.
Insurance Coverage Requirements. Not later thanUpon the
Franchisee's execution of this Agreement or sixty (60) days prior to the Opening Date, Franchisee
shall procure and shall maintain in full force and effect at all times during the term of this Agreement an
insurance policy or policies protecting Franchisee and Franchisor and its affiliates, successors and
assigns, and the officers, directors, shareholders, partners, agents, representatives, independentcontractors and employees of each of them against any demand or claim with respect to personal injury,
death or property damage, or any loss, liability or expense whatsoever arising or occuning upon or in
connection with the Restaurant. Such policy or policies shall be written by a responsible canier or
caniers rated "A VTl" or better by the A.M. Best Company, Inc. and otherwise reasonably acceptable to
Franchisor and shall include, at a minimum (except as additional coverages and higher policy limits may
reasonabfy be specified by Franchisor from time to time, including, without limitation, any insurance
required by Franchisor in the event Franchisor authorizes, and Franchisee elects to offer, beer and/or
wine), in accordance with standards and specifications set forth in writing, the following:
(1)
Commercial General Liability Insurance, including broad form contractual
liability, brood form property damage, personal injury, advertising injury, completed operations,
products liability and fire damage coverage, in the amount of One Million Dollars ($1,000,000)
($rOoToOOrgfnerI^^^^^
UmitT,
fire legal liabilitv of Fifty Thousand Dollars ($50,000), and a premises medical limit of Two Thousand
Five Hundred Dollars ($2.5Q0L This policv must contain a primary and non-contributorv provision
in favor of the Addifional In.'^ur^f^.
(2)
"All Risks" coverage for the full cost of replacement of the Restaurant premises
and all other property in which Franchisor may have an interest with no coinsurance clause for the
premisesand
business income insurance in an amount sufficient to cover continuing
obligations to Franchisor in the event of a covered loss.
(3)
Automobile liability coverage, including coverage of owned, non-owned and
hired vehicles, with coverage in amounts not less than One Million Dollars ($1,000,000) combined single
limit.
(4)
General Liahilit
($1,000,000).
An "umbrella" policy providing excess coverage of the Automobile Liability.
Liability policies with limits of not less than One Million Dollars
(5)
Worker's compensation insurance to provide statutory coverage in the applicable
state, and Employers Liability Coverage with limits of $5OO,O00/$5O0,O00/$500,000 or, if permissible
under applicable law, any legally appropriate alternative i f supported by third party coverage issued
by-a-cari4er-r^asonably acccptable-to-Franchisor, provided that Franchisee (i) maintains an excess
indemnity or "umbrella" policy covering employer's liability and/or a medical/disability policy covering
medical expenses for on-the-job accidents, which policy or policies shall be written by a responsible
canier meeting the requirements set forth above and which shall contain such coverage amounts as
Franchisee and Franchisor shall mutually agree upon and (ii) conducts and maintains a risk management
and safety program for its employees as the Franchisee and Franchisor shall mutually agree is
appropriate. Such policies shall also include a waiver of subrogation in favor of Franchisor and its
DALO 1:11S5855.11194849.3
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affiliates, and the officers, directors, shareholders, partners, agents, representatives^ independent
contractors, ser\^ants and employees of each of them.
(6)
Such other insurance as may be required by the landlord of the premises and by
the state or locality in which the Restaurant is located and operated.
B.
Deductibles: Waiver of Subrogation. Franchisee may elect to have reasonable
deductibles in connection with the coverage required under Sections XII.A(l)-(6) hereof Such policies
shall also include a waiver of subrogation provision or endorsement in favor of Franchisor, its affiliates
and the officers, directors, shareholders, partners, agents, representatives, independent contractors,
servante-and employees of each of them.
C.
Builder's Risk Insurance.
In connection with any construction, renovation,
refurbishment or remodeling of the Restaurant, Franchisee shall maintain Builder's Risks/Installation
insurance and performance and completion bonds in forms and amounts, and written by a canier or
caniers, reasonably satisfactory to Franchisor.
D.
No Limitation of Other Obligations. Franchisee's obligation to obtain and maintain the
foregoing policy or policies in the amounts specified shall not be limited in any way by reason of any
insurance which may be maintained by Franchisor, nor shall Franchisee's performance of that obligation
relieve it of liability under the indemnity provisions set forth in Section XV. of this Agreement.
E.
Rccoveiy of Loss. All public liability and property' domagc policies shall contain o
provision that Franchisor and its nffiliotcs, and the officers, directors, shareholders, partners,
agents, represcntotivcs, independent contractorSi servants and employees of each of them, although
named as insureds^ shall nevertheless be entitled to recover under such policies on any loss
occosioned to Franchisor or its sertHints, agents or employees by reason of the negligence of
Fronchisee or its scr\'ants, agents or employees.
¥^
Certificates of Insurance.
Upon
execution of this Agreement, and thereafter thirty (30) days prior to the expiration of any such policy,
Franchisee shall deliver to Franchisor Certificates of Insurance evidencing the existence and continuation
of proper coverage with limits not less than those required hereunder. In addition, if requested by
Franchisor, Franchisee shall deliver to Franchisor a copy of the insurance policy or policies required
hereunder. All insurance policies required hereunder, with the exception of workers' compensation, shall
name Franchisor and its afflliates, and the officers, directors, shareholders, partners, agents,
representatives, independent controctors, scr^^onts and employees of each of them, as additional
insureds, and shall expressly provide that any interest of same therein shall not be affected by any breach
by Franchisee of any policy provisions. Further, all insurance policies required hereunder shall expressly
provide that no less than thirty (30) days' prior written notice shall be given to Franchisor in the event of
a material alteration to or cancellation of anv of the policies.
GERemedies. Should Franchisee, for any reason, fail to procure or maintain the insurance
required by this Agreement, as such requirements may be revised from time to time by Franchisor in
writing. Franchisor shall have the right and authority (without, however, any obligation to do so)
immediately to procure such insurance and to charge same to Franchisee, which charges, together with a
reasonable fee for Franchisor's expenses in so acting, shall be payable by Franchisee immediately upon
DALOl :MS585S41194849.3
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notice. The foregoing remedies shall be in addition to any other remedies Franchisor may have at law or
in equity.
Xm.
DEBTS AND TAXES
A.
Payment of Taxes and Other Obligations. Franchisee shall promptly pay when due all
Taxes (as defined below), levied or assessed, and all accounts and other indebtedness of every kind
incuned by Franchisee in the conduct of the licensed business under this Agreement. Without limiting
the provisions of Section XV., Franchisee shall be solely liable for the payment of all Taxes and shall
indemnify Franchisor for the full amount of all such Taxes and for any liability (including penalties,
interest and expenses) arising from or conceming the payment of Taxes, whether Taxes were conectly or
legally asserted or not.
B.
No Deduction. Each payment to be made to Franchisor hereunder shall be madefreeand
clear and without deduction for any Taxes. The term "Taxes" means any present or future taxes, levies,
imposts, duties or other charges of whatsoever nature, including any interest or penalties thereon,
imposed by any government or political subdivision of such government on or relating to the operation of
the licensed business, the payment of monies, or the exercise of rights granted pursuant to this
Agreement, except Taxes imposed on or measured by Franchisor's net income.
C.
Disputed Liability. In the event of any bona fide dispute as to Franchisee's liability for
taxes assessed or .other indebtedness. Franchisee may contest the validity or the amount of the tax or
indebtedness in accordance with the procedures of the taxing authority or applicable law. However, in
no event shall Franchisee permit a tax sale or seizure by levy of execution or similar writ or wanant or
artachment by a creditor, to occur against the premises of the licensed business or any improvements
thereon.
D.
Credit Standing. Franchisee recognizes that the failure to make payments or repeated
delays in making prompt payments under or in accordance with the terms of agreements, invoices and
other statements for purchases of products or services will result in a loss of credit rating or standing
which will be detrimental to the goodwill associated with the Marks and the System. Except for
payments which are disputed by Franchisee in good faith, Franchisee agrees to promptly pay when due
all amounts owed by Franchisee to Franchisor, its afflliates, or other suppliers.
E.
Notice of Adverse Orders. Franchisee shall notify Franchisor in writing within five (5)
days of the commencement of any action, suit or proceeding and of the issuance of any order, writ,
injunction, award or decree of any court, agency or other govemmental instrumentality, which may
adversely affect the operation or financial condition of the licensed business.
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XIV.
TRANSFER OF INTEREST
A.
By Franchisor. Franchisor and its affiliates shall have the right to transfer or assign this
Agreement and all or any part of their rights, interests or obligations herein or in Franchisor to any
person or legal enfity without Franchisee's consent. Specifically, and without limitation to the foregoing.
Franchisee agrees that Franchisor may sell its assets, the Marks or the System to a third party; may offer
its securities privately or publicly; may merge, acquire other corporations or be acquired by another
corporation; may undertake a refinancing, recapitalization, leveraged buyout or other economic or
financial restructuring; and with regard to any or all of the above sales, assignments and dispositions,
Franchisee expressly and specifically waives any claims, demands, or damages against Franchisor arising
from or related to the transfer of the Marks (or any variation thereof) or the System from Franchisor to
any other party. Nothing contained in this Agreement shall require Franchisor to offer any services or
products, whether or not bearing the Marks, to Franchisee if Franchisor assigns its rights in this
Agreement.
B.
By Franchisee and Principals. Franchisee understands and acknowledges that the rights
and duties set forth in this Agreement are personal to Franchisee, and that Franchisor has granted rights
under this Agreement in reliance on the business skill, financial capacity and personal character of
Franchisee and the Principals. Accordingly, neither Franchisee nor any Principal, nor any successor or
assign of Franchisee or any Principal, shall sell, assign, transfer, convey, give away, pledge, mortgage or
otherwise dispose of or encumber any direct or indirect interest in this Agreement, in the Restaurant or in
Franchisee without the prior written consent of Franchisor. Any purported assignment or transfer, by
operation of law or otherwise, made in violation of this Agreement shall be null and void and shall
constitute a material breach under this Agreement.
(1)
If Franchisee wishes to transfer all or part of its interest in the Restaurant or this
Agreement or if Franchisee or a Principal wishes to transfer any ownership interest in Franchisee,
transferor and the proposed transferee shall apply to Franchisor for its consent. Franchisor shall not
unreasonably withhold its consent to a transfer of any interest in Franchisee, in the Restaurant or in this
Agreement. Franchisor may, in its sole discretion, require any or all of the following as conditions of its
approval:
(a)
All ofthe accmed monetary obligations of Franchisee and its affiliates
and the Controlling Principals and all other outstanding obligations to Franchisor and its
afflliates and the Controlling Principals arising under this Agreement or any other agreement
shall have been satisfied in a timely manner and Franchisee shall have satisfied all trade accounts
and other debts, of whatever nature or kind, in a timely manner;
(b)
Franchisee and its affiliates and the Controlling Principals shall not be in
default of any provision of this Agreement, any amendment hereof or successor hereto, or any
other agreement between Franchisee or any of its afflliates or Controlling Principals and
Franchisor or any of its affiliates, and Franchisee and its affiliates and the Controlling Principals
shall have substantially and timely complied with all the terms and conditions of such
agreements during the terms thereof;
(c)
The transferor and its principals (if applicable) shall have executed a
general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor, its
aflfiliates and the officers, directors, shareholders, partners, agents, representatives, independent
contractors, servants and employees of each of them, in their corporate and individual capacities.
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including, without limitation, claims arising under this Agreement and federal, state and local
laws, rules, regulations and orders;
(d)
The transferee shall enter into a written agreement, in a form satisfactory
to Franchisor, assuming full, unconditional, joint and several liability for, and agreeing to
perform from the date of the transfer, all obligations, covenants and agreements contained in this
Agreement; and, if transferee is a corporation, partnership, or limited liability company, such of
transferee's principals as Franchisor may designate as controlling principals shall execute such
agreement as transferee's controlling principals and guarantee the performance of all such
obligations, covenants and agreements;
(e)
The transferee shall execute, for a term ending on the expiration date of
this Agreement and with such renewal terms as may be provided by this Agreement, the standard
form franchise agreement then being offered to new System Franchisees, including, without
limitation, a Controlling Principals Acknowledgement and Agreement in a form similar to the
one attached hereto, and other ancillary agreements as Franchisor may require for the Restaurant,
which agreements shall supersede this Agreement and its ancillary documents in all respects and
the terms of which agreements may differ from the terms of this Agreement, including, without
limitation, a higher percentage royalty fee, advertising contribution or expenditure requirement;
provided, however, that the transferee shall not be required to pay any initial franchise fee; and,
if transferee is a corporation, partnership or limited liability company, such of transferee's
principals as Franchisor may designate as controlling principals shall execute such agreement as
transferee's controlling principals and guarantee the performance of all such obligations,
covenants and agreements;
(f)
The transferee shall demonstrate to Franchisor's satisfaction that
transferee meets the criteria considered by Franchisor when reviewing a prospective Franchisee's
application for a license, including, but not limited to, Franchisor's educational, managerial and
business standards; transferee's good moral character, business reputation and credit rating;
transferee's aptitude and ability to conduct the business licensed herein (as may be evidenced by
prior related business experience or otherwise); transferee's financial resources and capital for
operation of the business; and the geographic proximity of other CiCi's Pizza restaurants owned
or operated by transferee;
(g)
The transferee, at its expense, shall renovate, modemize and otherwise
upgrade the Restaurant and, i f applicable, any Restaurant delivery vehicles to conform to the
then-cunent standards and specifications of the System, and shall complete the upgrading and
other requirements within the time period reasonably specified by Franchisor;
(h)
The transferor shall remain liable for all of the obligations to Franchisor
in connection with this Agreement and the Restaurant incuned prior to the effective date of the
transfer and shall execute any and all instruments reasonably requested by Franchisor to evidence
such liability;
(i)
At the transferee's expense, the transferee, the transferee's general
manager and the transferee's assistant managers shall complete any training programs then in
effect for CiCi's Pizza restaurants upon such terms and conditions as Franchisor may reasonably
require;
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G)
Franchisee shall pay a transfer fee of Five Thousand Dollars ($5,000.00)
to Franchisor, plus such amount as is necessary to reimburse Franchisor for its reasonable
out-of-pocket costs and expenses associated with reviewing the application to transfer, including,
without limitation, legal and accounting fees; and
(k)
I f the transferee is a corporation, partnership or limited liability
company, the fransferee shall make and will be bound by any or all of the representations,
wananties and covenants set forth at Section VI. as Franchisor requests. Transferee shall
provide to Franchisor evidence satisfactory to Franchisor that the terms of such Section have
been satisfied and are true and conect on the date of transfer.
(2)
Franchisee shall not grant a security interest in the Restaurant or in any of
Franchisee's assets without Franchisor's prior written consent, which shall not be unreasonably withheld.
In connection therewith, the secured party will be required by Franchisor to agree that in the event of any
default by Franchisee under any documents related to the security interest. Franchisor shall have the right
and option to be substituted as obligor to the secured party and to cure any default of Franchisee.
(3)
Franchisee acknowledges and agrees that each condition which must be met by
the transferee is reasonable and necessary to assure such transferee's full performance of the obligations
hereunder.
Franchisee
qpaliiffiipftfions of potential transferees and the tt
their purchase contracts with Franchisee
for the nurnoses of protecting Frt
authorizes Franchisor to communicate with any potential transferee and waives anv claims that
any such acfions hv Franchisor consfitute tortious interference with contractual or business
conduct.
C.
Transfer for Convenience of Ownership and for Estate Planning.
(1)
In the event the proposed transfer is to a corporation formed solely for the
convenience of ownership. Franchisor's consent may be conditioned upon any of the requirements set
forth at Section XIV.B(l), except that (i) the requirements set forth at Sections XIV.B(l)(c), (e), (f), (g),
and (i) shall not apply, and (ii) the fee provided for in Section XIV.B(i)(j) shall be equal to Franchisor's
reasonable out-of-pocket costs and expenses (including legal and accounting fees) associated with
reviewing the application to transfer. With respect to a transfer to a corporation formed for the
convenience of ownership, Franchisee shall be the owner of all of the voting stock or interest of the
corporation and i f Franchisee is more than one individual, each individual shall have the same
proportionate ownership interest in the corporation as he had in Franchisee prior to the transfer.
(2)
Anything in this Secfion XIV. to the contrary notwithstanding, any individual
holding an interest in Franchisee may transfer all or a portion of his or her interest in Franchisee to any
immediate family member or to a tmst established for the benefit of any such immediate family member,
provided (a) there is no uncured event of default under this Agreement, (b) the transferor provides prior
written notice to Franchisor, and (c) if the transfer is of a controlling interest, (i) the transferee executes a
guaranty and undertaking substantially similar to the form of the Controlling Principals signature page
attached to this Agreement, and (ii) the transferor continues to maintain the unrestricted power to direct,
directly or indirectly, the management and policies of the Franchisee, including those relating to the
payment of financial obligations, as reasonably determined by Franchisor. As used herein, a "controlling
interest" means the direct or indirect power to direct the management and policies of the Franchisee,
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including those relating to the payment of financial obligations, whether through the ownership of voting
securities or interests, by contract, or otherwise, each as reasonably determined by Franchisor, and an
"immediate family member" means the spouse of a person, the natural and adoptive parents, natural and
adopted siblings, and natural and adopted children of such person and their spouses.
D.
Right of First Refusal. If Franchisee or a Principal wishes to transfer all or part of its
interest in the Restaurant or this Agreement or if Franchisee or a Principal wishes to transfer any
ownership interest in Franchisee, pursuant to any bona fide offer received from a third party to purchase
such interest, then such proposed seller shall promptly notify Franchisor in writing of each such offer,
and shall provide such information and documentation relating to the offer as Franchisor may require.
Franchisor shall have the right and option, exercisable within thirty (30) days after receipt of such written
notification and copies of all required documentation describing the terms of such offer, to send written
notice to the seller that Franchisor intends to purchase the seller's interest on the same terms and
conditions offered by the third party. In the event that Franchisor elects to purchase the seller's interest,
closing on such purchase must occur within sixty (60) days from the date of notice to the seller of the
election to purchase by Franchisor, or such other date as the parties agree upon in writing. Any material
change in the terms of any offer prior to closing shall constitute a new offer subject to the same right of
first refusal by Franchisor as in the case of an initial offer. Failure of Franchisor to exercise the option
afforded by this Section XIV.D shall not constitute a waiver of any other provision of this Agreement,
including all of the requirements of Section XIV., with respect to a proposed transfer.
(1)
In the event an offer from a third party provides for payment of consideration
other than cash or involves certain intangible benefits. Franchisor may elect to purchase the interest
proposed to be sold for the reasonable cash equivalenL If the parties cannot agree within a reasonable
time on the reasonable cash equivalent of the non-cash part of the offer, then such amount shall be
determined by two (2) appraisers, with each party selecting one (1) appraiser, and the average of their
determinations shall be binding. In the event of such appraisal, each party shall bear its own legal and
other costs and shall split the appraisal fees. In the event that Franchisor exercises its right offirstrefusal
herein provided, it shall have the right to set off against any payment for the interest (i) all fees for any
such independent appraiser due from Franchisee hereunder and (ii) all amounts due from Franchisee, its
afflliates and the Controlling Principals to Franchisor or any of its affiliates.
(2)
Failure to comply with the provisions of this Section prior to the transfer of any
interest in Franchisee, tbe Restaurant or this Agreement shall constitute a material breach under this
Agreement.
E.
Death or Permanent Disability.
(1)
Upon the death of Franchisee (if Franchisee is a natural person) or any Principal
who is a natural person (the "Deceased"), the executor, administrator or other personal representative of
the Deceased shall, subject to Section XIV.E.(5) below, transfer such interest to a third party approved by
Franchisor within twelve (12) months after the date of death. If no personal representative is designated
or appointed or no probate proceedings are instituted with respect to the estate of the Deceased, then the
distributee of such interest must be approved by Franchisor. I f the distributee is not approved by
Franchisor, then the distributee shall transfer such interest to a third party approved by Franchisor within
twelve (12) months after the death of the Deceased.
(2)
Upon the permanent disability of Franchisee (if Franchisee is a natural person)
or any Principal who is a natural person, Franchisor may, in its sole discretion, require such interest to be
transfened to a third party in accordance with the condifions described in this Section XIV. within six (6)
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months after notice to Franchisee. "Permanent disability" shall mean any physical, emotional or mental
injury, illness or incapacity which would prevent a person from performing the obligations set forth in
this Agreement or in the guaranty made part of this Agreement for at least ninety (90) consecutive days
and from which condition recovery within ninety (90) days from the date of determination of disability is
unlikely. Permanent disability shall be determined by a licensed practicing physician selected by
Franchisor, upon examination of the person; or if the person refuses to submit to an examination, then
such person automatically shall be deemed permanently disabled as of the date of such refusal for the
purpose of this Section XIV.E. The costs of any examination required by this Section shall be paid by
Franchisor.
(3)
Franchisee or a representative of Franchisee must promptly notify Franchisor of
the death or claim of permanent disability of Franchisee or any Principal. At Franchisor's request, within
a reasonable period of time not to exceed seven (7) days from the date of death or permanent disability,
the executor, administrator or other personal representative of the Deceased or disabled person shall
provide for interim management of the Restaurant until such time as a transfer has been effected in
accordance with the provisions of this Section XIV.E. Such interim management shall be approved by
Franchisor and shall be conducted in accordance with the terms of this Agreement. Franchisor may (but
is not obligated to) assume such interim management of the Restaurant, provided that (i) interim
management of the Restaurant by Franchisor shall not relieve Franchisee of its obligations under this
Agreement; (ii) Franchisor shall not be liable for any debts, losses, costs or expenses incuned in the
operafion of the Restaurant during any such period of interim management; (iii) Franchisor shall have the
right to charge a reasonable fee for its management services; and (iv) Franchisee shall, and hereby does,
indemnify and hold Franchisor harmless against any and all judgments, fines, losses, liabilities, costs,
amounts paid in settlement and reasonable expenses (including, but not limited to attomeys' fees)
incuned in connection with Franchisor's interim management of the Restaurant, except by reason of
Franchisor's gross negligence or willful misconduct.
(4)
Any transfer upon death or permanent disability shall be subject to the same
terms and conditions as described in this Section for any inter vivos transfer. If an interest is not
transfened upon death or permanent disability as required in this Section, then such failure shall
constitute a material breach under this Agreement.
(5)
Anything contained in this Section XIV.E. to the contrary notwithstanding, upon
the death or permanent disability of the Franchisee (if the Franchisee is a natural person) or any
Managing Principal of a corporate or partnership Franchisee, Franchisor (or its designee) shall have the
option, to be exercised in writing within twenty (20) days from the date Franchisor receives notice of the
death or claim of permanent disability pursuant to Section XIV.E.(3) (the "Option Period"), to elect to
purchase the interest ofthe Franchisee and/or the Managing Principal in this Agreement, the Restaurant,
or Franchisee, as applicable, as well as the further option to elect to purchase the interest of any other
Principal owning an interest in this Agreement, the Restaurant, or Franchisee (individually, an "Interesf
and collectively, the "Interests") at the price and upon the terms set forth below.
DAL01:1I5S8S5.'1J
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(a)
During the Option Period, the purchase price for the Interests shall be
determined with reference to the agreed value of the Restaurant (the "Agreed Value"), as set
forth below. If the Franchisee operates the Restaurant as a sole proprietor, then the purchase
price shall be an amount equal to one hundred percent (100%) of the Agreed Value. If the
Franchisee is a corporation, partnership or limited liability company, then the purchase price for
any Interest shall be an amount which bears the same relationship to the Agreed Value as the
interest of the Operating or other Principal bears to the total ownership interests in the
Franchisee.
(b)
The Agreed Value shall be an amount equal to the Initial Value (defined
below), less the total cunent and long term liabilities assumed by Franchisor (or its designee).
The Initial Value shall equal the following:
(i)
If the death or permanent disability of the Franchisee and/or the
Managing Principal occurs prior to six (6) months following the Opening Date of the
Restaurant (as defined in Section lI.E. of this Agreement), then the Initial Value shall be
an amount equal to the Franchisee's Original Cost (defined below), plus ten percent
(10%). The Franchisee's Original Cost shall include all expenditures related to the
execution of this Agreement and the opening of the Restaurant ("Start-Up
Expenditures"), exclusive of those such as lease deposits, utility deposits, and prepaid
expenses to be refunded by third parties and exclusive of wages paid to the Franchisee
and/or the Managing Principal and any family member prior to the Opening Date.
Start-Up Expenditures shall include, without limitation, the initial franchise fee paid
pursuant to Section IV.A. of this Agreement, any local govemmental impact fees, costs
incuned for site location, leasehold improvements, equipment, inventory and
smallwares, signage, the hiring and training of managers, and other miscellaneous
Start-Up Expenditures, provided that all Start-Up Expenditures shall be documented to
Franchisor's reasonable satisfaction.
(ii)
If the death or permanent disability of the Franchisee and/or the
Managing Principal occurs on or after six (6) months following the Opening Date, but
prior to twelve (12) months following the Opening Date, then the Initial Value shall be
an amount equal to the Net Sales of the Restaurant for the five (5) month period
immediately preceding the month in which the death or permanent disability of the
Franchisee and/or the Managing Principal occurs, annualized, then divided by two (2).
(iii)
If the death or permanent disability of the Franchisee and/or the
Managing Principal occurs on or after twelve (12) months following the Opening Date,
then the Initial Value shall be an amount equal to the total Net Sales of the Restaurant for
the twelve (12) month period immediately preceding the month in which the death or
permanent disability of the Franchisee and/or the Managing Principal occurs, divided by
two (2).
(c)
If one or more of the options provided for in this Section XIV.E.(5) are
exercised, closing of the purchase shall occur on or before thirty (30) days following the date on
which Franchisor receives notice of the death or claim of permanent disability, or, in the event
additional time is required to document the Start-Up Expenditures pursuant to Section
XIV.E.(5)(b)(i) above, within forty-five (45) days of such date. Anything contained herein to the
contrary notwithstanding, however, Franchisor (or its designee) shall have no obligation to close
unless and until any and all third party consents deemed necessary by Franchisor (or its
DALO 1:1155855.41194849.3
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designee), including, without limitation, any consent of the landlord for the Restaurant premises
to the assignment of the lease therefor, or to the transfer of the Operating or other Principal's
interest in a corporate or partnership lessee, have been secured. At the closing, the parties (or
their authorized representatives)
shall execute and deliver any and all documents and
instmments deemed necessary by Franchisor or its counsel to effect a valid and binding transfer
of the Interest(s) to Franchisor (or its designee) and the assumption of any liabilities assumed by
them.
(d)
Anything contained in this Section XIV.E.(5) to the contrary
notwithstanding, if Franchisor (or its designee) elects not to exercise the options described above
during the Option Period, then subsequent to the expiration of such Option Period, Franchisor (or
its designee) and the owner of any Interest (or such person's personal representative or
distributee) may nevertheless mutually agree that Franchisor (or its designee) shall purchase such
Interest upon mutually satisfactory terms. In such event, the parties shall not be bound by the
price and terms applicable to the purchase of an Interest during the Option Period, as described
above, but rather, may mutually agree to another price and other terms of purchase.
(e)
Upon the executien-ef-this-Agreement, each Principal not othei'wise
signing this Agreement as a Controlling Principal and their respective spouses, as well as
the-rcspeotive-spQuscs-of-<:ach-Gontrolling Prineipal-cxcei
a consent to the provisions of this Section XrV.E.(5), the form of whici
Agreement. Such consent shall subject any interest they may have in an Interest covered
by the options provided for in this Section XIV.E.(5) (whether o separote property interest,
joint ownership- property—interest, eommunity-propcFty—interest, or otherwise) to the
provisions hereof.
F.
No Waiver. Franchisor's consent to a transfer of any interest described herein shall not
constitute a waiver ofany claims which Franchisor may have against the transfening party, nor shall it be
deemed a waiver of Franchisor's right to demand exact compliance with any of the terms of this
Agreement by the transferee.
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G.
Securities Offerings. Securities or partnership interests in Franchisee may not be offered
to the public under the Securities Act of 1933, as amended, nor may they be registered under the
Securities Exchange Act of 1934, as amended, or any comparable federal, state or foreign law, mle or
regulation and may be offered by private offering or otherwise only with the prior written consent of
Franchisor, which consent shall not be unreasonably withheld. All materials required for any such
private offering by federal or state law shall be submirted to Franchisor for a limited review as described
below prior to being filed with any govemmental agency (if applicable) and prior to their use. No
Franchisee offering shall imply (by use of the Marks or otherwise) that Franchisor is participating in an
underwriting, issuance or offering of securities of Franchisee or Franchisor, and Franchisor's review of
any offering materials shall be limited solely to the subject of the relationship between Franchisee and
Franchisor and its affiliates. Franchisor may, at its option, require Franchisee's offering materials to
contain a written statement prescribed by Franchisor conceming the limitations described in the
preceding sentence. Franchisee, its Controlling Principals and the other participants in the offering must
fully indemnify Franchisor, and its affiliates, and the officers, directors, shareholders, partners, agents,
representatives, independent contractors, servants and employees of each of them, in connection with the
offering. For each proposed offering. Franchisee shall pay to Franchisor a non-refundable fee of Three
Thousand Dollars ($3,000.00), or such greater amount as is necessary to reimburse Franchisor for its
reasonable costs and expenses associated with reviewing the proposed offering materials, including,
without limitation, legal and accounting fees. Franchisee shall give Franchisor written notice at least
thirty (30) days prior to the date of commencement of any offering or other transaction covered by this
Section XIV.G.
XV.
INDEMNIFICATION
A.
Indemnity. Franchisee and each of the Controlling Principals shall, at all times,
indemnify and hold harmless to the fullest extent permitted by law Franchisor, its afflliates, successors
and assigns and the officers, directors, shareholders, partners, agents, representatives, independent
contractors, servants and employees of each of them ("Indemnitees"), from all "losses and expenses" (as
defined in Section XV.D(2) below) incurred in connection with any action, suit, proceeding, claim,
demand, investigation or inquiry (formal or informal), or any sertlement thereof (whether or not a formal
proceeding or action has been instituted) which arises out of or relates to this Agreement in any way or
which arises out of or is based upon any of the following:
(1)
The infringement, alleged infringement, or any other violation or alleged
violation by Franchisee or any of the Controlling Principals of any patent, mark or copyright or other
proprietary right owned or controlled by third parties (except as such may occur with respect to any right
to use the Marks, any copyrights or other proprietary information granted hereunder pursuant to Section
X.);
(2)
The violation, breach or asserted violation or breach by Franchisee or any of the
Controlling Principals of any federal, state or local law, regulation, mling, standard or directive or any
industry standard;
(3)
Libel, slander or any other form of defamation of Franchisor, the System or any
franchisee or developer operating under the System, by Franchisee or by any of the Controlling
Principals;
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(4)
The violation or breach by Franchisee or by any of the Controlling Principals of
any wananty, representation, agreement or obligation in this Agreement or in any other agreement
between Franchisee or any of its afflliates and Franchisor or any of its afflliates, or the officers, directors,
shareholders, partners, agents, representatives, independent contractors, servants and employees of any of
them; and
(5)
Acts, errors, or omissions of Franchisee, any of Franchisee's afflliates, any of the
Controlling Principals and the respective officers, directors, shareholders, partners, agents,
representatives, independent contractors servants and employees of any of them in connection with the
establishment, constmction, operation or closing of the Restaurant including, but not limited to, any acts,
enors or omissions of any of the foregoing in the operation of any motor vehicle or the use of any
product or service (including, without limitation, those recommended or required by Franchisor).
B.
Defense of Claim. Franchisee and each of the Controlling Principals agree to give
Franchisor immediate notice of any such action, suit, proceeding, claim, demand, inquiry, or
investigation. Franchisor may elect to assume (but under no circumstance is obligated to undertake) or
associate counsel of its own choosing with respect to, the defense and/or settlement of any such action,
suit, proceeding, claim, demand, inquiry or investigation. Such an undertaking by Franchisor shall, in no
manner or form, diminish the obligation of Franchisee and each of the Controlling Principals to
indemnify the Indemnitees and to hold them harmless.
C.
Remedial Action. In order to protect persons or property, or its reputation or goodwill,
or the reputation or goodwill of others. Franchisor may, at any time and without notice, as it, in its
judgment deems appropriate, consent or agree to settlements or take such other remedial or conective
action as it deems expedient with respect to the action, suit, proceeding, claim, demand, inquiry or
investigation if, in Franchisor's sole judgment, there are reasonable grounds to believe that:
(1)
any of the acts or circumstances enumerated in Section XV.A(l)-(4) above has
occuned; or
(2)
any act, enor, or omission as described in Section XV.A(5) may result directly
or indirectly in damage, injury, or harm to any person or any property.
D.
Losses and Expenses.
(1)
All losses and expenses incuned under this Section XV. shall be chargeable to
and paid by Franchisee or any of the Controlling Principals pursuant to its obligations of indemnity under
this Section, regardless of any action, activity or defense undertaken by Franchisor or the subsequent
success or failure of such action, activity, or defense.
(2)
As used in this Section XV., the phrase "losses and expenses" shall include,
without limitation, all losses, compensatory, exemplary or punitive damages, fines, charges, costs,
expenses, lost . profits, reasonable attomeys' fees, court costs, settlement amounts, judgments,
compensation for damages to the Franchisor's reputation and goodwill, costs of or resulting from delays,
financing costs, costs of advertising material and media time/space and costs of changing, substituting or
replacing the same, any and all expenses of recall, refunds, compensation, and public notices and all
other payments of money incuned in connection with the matters described.
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E.
Contributory Negligence. The Indemnitees do not assume any liability whatsoever for
acts, enors, or omissions of any person with whom Franchisee, any of the Controlling Principals,
Franchisee's affiliates or any of the officers, directors, shareholders, partners, agents, representatives,
independent contractors and employees of Franchisee or its affiliates may contract, regardless of the
purpose. Franchisee and each of the Controlling Principals shall hold harmless and indemnify the
Indemnitees for all losses and expenses which may arise out of any acts, enors or omissions of
Franchisee, the Controlling Principals, Franchisee's affiliates, the officers, directors, shareholders,
partners, agents, representatives, independent contractors and employees of Franchisee and its affiliates
and any such other parties without limitation and without regard to the cause or causes thereof or the
negligence (whether such negligence be gross, sole, joint or concunent, or active or passive) or strict
liability of Franchisor or any other party or parties arising in connection therewith, including, without
limitation, the other Indemnitees. Franchisee acknowledges that this Section XV.E. clearly and
unequivocally meets the requirements of the express negligence mle of the Texas Supreme Court and
inevocably waives any claim to the contrary.
F.
Mitigation Not Required. Under no circumstances shall the Indemnitees be required or
obligated to seek recovery from third parties or otherwise mitigate their losses in order to maintain a
claim against Franchisee or any of the Controlling Principals. Franchisee and each of the Controlling
Principals agree that the failure to pursue such recovery or mitigate loss will in no way reduce the
amounts recoverable from Franchisee or any of the Controlling Principals by the Indemnitees.
G.
Survival of Obligation. Franchisee and the Controlling Principals expressly agree that
the terms of this Section XV. shall survive the termination, expiration or transfer of this Agreement or
any interest herein.
XVI.
RELATIONSHIP OF THE PARTIES
A.
Independent Contractor Relationship. The parties acknowledge and agree that this
Agreement does not create a fiduciary relationship between them, that Franchisee shall be an independent
contractor, and that nothing in this Agreement is intended to constitute either party an agent, legal
representative, subsidiary, joint venturer, partner, employee, joint employer or servant of the other for
any purpose. Franchisee shall have no right to bind or obligate Franchisor in any way, and shall in no
way represent any right to do so. Franchisee shall exercise full and complete control over and have full
responsibility for its contracts, daily operations, and employment practices and policies, including,
without limitation, recruitment, selection, hiring, disciplining, firing, compensation, and work rules..
B.
Notice of Relationship. During the term of this Agreement, Franchisee shall hold itself
out to the public as an independent contractor conducting its Restaurant operations pursuant to the rights
granted by Franchisor. Franchisee agrees to take such action as shall be necessary to that end, including,
without limitation, exhibiting a notice of that fact in a conspicuous place on the Restaurant premises
established for the purposes hereunder or on any Restaurant delivery vehicle, the content and form of
which Franchisor reserves the right to specify in writing.
C.
No Liability. Franchisee understands and agrees that nothing in this Agreement
authorizes Franchisee or any of the Controlling Principals to make any contract, agreement, wananty or
representation on Franchisor's behalf, or to incur any debt or other obligation in Franchisor's name, and
that Franchisor shall in no event assume liability for, or be deemed liable under this Agreement as a
result of, any such action, or for any act or omission of Franchisee or any of the Controlling Principals or
any claim or judgment arising therefrom.
DALQl.nSSSSSAUmm
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XVH.
TERMINATION
A.
Default and Termination.
(1)
Franchisee acknowledges and agrees that each of Franchisee's obligations
described in this Agreement is a material and essential obligation of Franchisee; that nonperformance of
such obligations will adversely and substantially affect the Franchisor and the System; and that the
exercise by Franchisor of the rights and remedies set forth herein is appropriate and reasonable.
(2)
Franchisee shall be deemed to be in default under this Agreement, and all rights
granted herein shall automatically terminate without notice to Franchisee, if Franchisee shall become
insolvent or makes a general assignment for the benefit of creditors; or if Franchisee files a voluntary
petition under any section or chapter of federal bankmptcy law or under any similar law or statute of the
United States or any state thereof, or admits in writing its inability to pay its debts when due; or if
Franchisee is adjudicated a bankmpt or insolvent in proceedings filed against Franchisee under any
section or chapter of federal bankmptcy laws or under any similar law or statute of the United States or
any state; or if a bill in equity or other proceeding for the appointment of a receiver of Franchisee or
other custodian for Franchisee's business or assets is filed and consented to by Franchisee; or if a
receiver or other custodian (permanent or temporary) of Franchisee's assets or property, or any part
thereof, is appointed by any court of competent jurisdiction; or if proceedings for a composition with
creditors under any state or federal law should be instituted by or against Franchisee; or if a final
judgment remains unsatisfied or of record for thirty (30) days or longer (unless supersedeas bond is
filed); or if Franchisee is dissolved; or if execution is levied against Franchisee's business or property; or
if judicial, non-judicial or administrative proceedings to foreclose any lien or mortgage against the
Restaurant premises or equipment is instituted against Franchisee and not dismissed within thirty (30)
days, or i f the real or personal property of the Restaurant shall be sold after levy thereupon by any
sheriff, marshal or constable or is otherwise sold by means of a foreclosure sale or a public or private
auction or sale conducted in accordance with applicable law.
(3)
Franchisee shall be deemed to be in material default and Franchisor may, at its
option, terminate this Agreement and all rights granted hereunder, without affording Franchisee any
opportunity to cure the default, effective immediately upon notice to Franchisee, upon the occunence of
any of the following events:
(a)
I f Franchisee operates the Restaurant or sells any products or services
authorized by Franchisor for sale at the Restaurant at a location which has not been approved by
Franchisor;
(b)
I f Franchisee fails to acquire an Approved Location for the Restaurant
within the time and in the manner specified in the CiCi's Development Agreement or Site
Selection Addendum to this Agreement, as applicable;
(c)
If Franchisee fails to constmct or remodel the Restaurant in accordance
with the plans and specifications provided to Franchisee under Section V.A. as such plans may
be adapted with Franchisor's approval in accordance with Section II.C;
(d)
If Franchisee fails to open the Restaurant for business as a CiCi's Pizza
restaurant within the period specified in Section lI.E. hereof;
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(e)
I f Franchisee at any time ceases to operate or otherwise abandons the
Restaurant, or loses the right to possession of the premises, or otherwise forfeits the right to do or
transact business in the jurisdiction where the Restaurant is located; provided, however, that this
provision shall not apply in cases of Force Majeure (acts of God, strikes, lockouts or other
industrial disturbances, war, riot, epidemic, fire or other catastrophe or other forces beyond
Franchisee's control), if through no fault of Franchisee, the premises are damaged or destroyed
by an event as described above, provided that Franchisee applies within thirty (30) days after
such event, for Franchisor's approval to relocate or reconstruct the premises (which approval
shall not be unreasonably withheld) and Franchisee diligently pursues such reconstruction or
relocation; and provided further, that any such approval may be conditioned upon the payment of
an agreed minimum royalty to Franchisor during the period in which the Restaurant is not in
operation;
(f)
If Franchisee or any of the Controlling Principals is convicted of, or has
entered a plea of nolo contendere to, a felony, a crime involving moral turpitude, or any other
crime or offense that Franchisor believes is reasonably likely to have an adverse effect on the
System, the Marks, the goodwill associated therewith, or Franchisor's interests therein;
(g)
I f a threat or danger to public health or safety results from the
constmction, maintenance, or operation of the Restaurant;
(h)
I f Franchisee (i) fails to desipnate the Managing Principal and/or
Operator hv the time set forth in Section VI.C. (ii) fails to maintain at all times a qualified
Managing Principal and/or Operator meeting the requirements of Section VI.C hereof, or (iii)
fails to have an Operator satisfactorilv complete the management traininp nropram on or
before the Restaurant Opening Date.:
(i)
If Franchisee or any of the Controlling Principals purports to transfer
any rights or obligations under this Agreement or any interest in Franchisee or the Restaurant to
any third party without Franchisor's prior written consent or without offering Franchisor a right
of first refusal with respect to such transfer, contrary to the terms of Section XIV. of this
Agreement;
(j)
I f Franchisee or any of its affiliates or Controlling Principals fails,
refuses, or neglects promptly to pay any monies owing to Franchisor or any of its afflliates, when
due under this Agreement or any other agreement (including, without limitation, any other
development or franchise agreement with Franchisor for any type of facility), or to submit the
financial or other information required by Franchisor under this Agreement and does not cure
such default within five (5) days following notice from Franchisor;
(k)
If Franchisee or any of the Controlling Principals fails to comply with
the in-term covenants in Section X.C hereof or Franchisee fails to obtain execution of the
covenants and related agreements required under Section X.C(4) hereof within thirty (30) days
after being requested to do so by Franchisor;
(1)
If, contrary to the terms of Section X.B hereof. Franchisee or any of the
Controlling Principals discloses or divulges any Confidential Information provided to Franchisee
or the Controlling Principals by Franchisor, or fails to obtain execution of covenants and related
agreements required under Section X.B(l) hereof within thirty (30) days after being requested to
do so by Franchisor;
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(m)
If a transfer upon death or permanent disability is not transfened in
accordance with Section XIV. and within the time periods therein;
(n)
If Franchisee knowingly maintains false books or records, or submits any
false reports to Franchisor;
(o)
If Franchisee breaches in any material respect any of the covenants set
forth in Section VI. or has falsely made any of the representations or wananties set forth in
Section VI.;
(p)
If Franchisee fails to maintain at all times a qualified General Manager
or Assistant Manager meeting the requirements of Section Vl.D. and Section VI.E., respectively;
(q)
If Franchisee fails to procure and maintain such insurance policies as
required by Section XII. and Franchisee fails to cure such default within seven (7) days following
notice from Franchisor;
(r)
i f Franchisee misuses or makes any unauthorized use of the Marks or
otherwise materially impairs the goodwill associated therewith or Franchisor's rights therein;
provided that, notwithstanding the above. Franchisee shall be entitled to notice of such breach
and shall have twenty-four (24) hours to cure such default;
(s)
If Franchisee fails to comply with the software license requirements in
Section VII.F. and fails to cure such default within thirty (30) days following written notice from
Franchisor;
(t)
If Franchisee, or any of the Controlling Principals repeatedly commits a
material breach under this Agreement, whether or not such breaches are of the same or different
nature and whether or not such breaches have been cured by Franchisee after notice by
Franchisor;
(u)
If the person initially appointed hy Franchisee^ as its Operator fails to
satisfactorily complete Franchisor's management training program as required in Section
VI.C.(4D and Franchisee fails to cure such defnultappoint a qualified replacement within
»«*«fytlUltX i^OM) days following notice from Franchisor;
(v)
Anything in this Agreement to the contrary notwithstanding, if
Franchisee fails to have a certified Manager on duty at the Restaurant during all hours of
operafion, as required by Section VII.E.9., and fails to cure such default within twenty-four (24)
hours following notice from Franchisor; or
(w)
If any Guarantor files a voluntary petition under any section or chapter
of federal bankruptcy law or under any similar law or statute of the United States or any state
thereof, or admits in writing its inability to pay its debts when due; or i f any Guarantor is
adjudicated a bankrupt or insolvent in proceedings filed against such Guarantor under any
section or chapter of federal bankmptcy laws or under any similar law or statute of the United
States or any state.
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B.
Other Terminable Events. Except as provided in Sections XVILA(2) and (3) of this
Agreement, upon any default by Franchisee which is susceptible of being cured. Franchisor may
terminate this Agreement by giving written notice of termination stating the nature of such default to
Franchisee at least thirty (30) days prior to the effective date of termination. However, Franchisee may
avoid termination by immediately initiating a remedy to cure such default and curing it to Franchisor's
satisfaction within the thirty (30) day period and by promptly providing proof thereof to Franchisor. If
any such default is not cured within the specified time, or such longer period as applicable law may
require, this Agreement shall terminate without further notice to Franchisee effective immediately upon
the expiration ofthe thirty (30) day period or such longer period as applicable law may require. Defaults
which are susceptible of cure hereunder may include, but are not limited to, the following illustrative
events:
(1)
If Franchisee fails to comply with any of the requirements imposed by this
Agreement, as it may from time to time be amended or reasonably be supplemented by Franchisor, or
fails to cany out the terms of this Agreement in good faith.
(2)
If Franchisee fails to maintain or observe any of the standards, specifications,
policies or procedures prescribed by Franchisor in this Agreement or otherwise in writing, including,
without limitation, any failure to comply with Franchisor's quality assurance program and to cure any
default thereunder within the applicable cure period.
(3)
If Franchisee fails, refuses, or neglects to obtain Franchisor's prior written
approval or consent as required by this Agreement.
X V m . POST-TERMINATION
Upon expiration ofthis Agreement or upon termination hereof in accordance with Section XVII.
(including, without limitation, the expiration of all applicable cure periods), all rights granted hereunder
to Franchisee shall forthwith terminate, and:
A.
Cease Operations. Franchisee shall immediately cease to operate the Restaurant under
this Agreement, and shall not thereafter, directly or indirectly, represent to the public or hold itself out as
a present or former franchisee of Franchisor.
B.
Cease Use of the Marks and Confidential Materials. Franchisee shall immediately and
permanently cease to use, in any manner whatsoever, any confidential methods, computer software
(including, without limitation, any point of sale software adapted for use by the System), procedures, and
techniques associated with the System; the mark "CiCi's"; and all other Marks and distinctive forms,
slogans, signs, symbols, and devices associated with the System. In particular, and without limitation.
Franchisee shall cease to use "all signs, advertising materials, displays, stationery, forms and any other
articles which display the Marks. Franchisee agrees that it will promptly remove all signage bearing the
Marks. In the event Franchisee fails to promptly remove such signage. Franchisor will have the right to
remove the signage, and Franchisee must reimburse Franchisor for all costs incuned in such removal. I f
Franchisee fails or refuses to comply with the requirements of this Section XVIII.B., Franchisor shall
have the right to enter upon the premises of the licensed business, without being guilty of trespass or any
other crime or tort, to make or cause to be made such changes as may be required.
C.
Cancel Assumed Name Registrations. Franchisee shall take such action as may be
necessary to cancel any assumed name or equivalent registration which contains the mark "CiCi's" or
any other service mark or trademark of Franchisor, and Franchisee shall fiiraish Franchisor with evidence
DALO 1:115585.S.41194849.3
079684.0103
-49-
satisfactory to Franchisor of compliance with this obligation within five (5) days after termination or
expiration of this Agreement.
D.
No Future Identification with CiCi's. Franchisee agrees, in the event it continues to
operate or subsequently begins to operate any other business, not to use any reproduction, counterfeit,
copy or colorable imitation of the Marks, either in connection with such other business or the promotion
thereof, which is likely to cause confusion, mistake, or deception, or which is likely to dilute Franchisor's
rights in and to the Marks, and further agrees not to utilize any designation of origin or description or
representation which falsely suggests or represents an association or connection with Franchisor
constituting unfair competition.
E.
Pay Amounts Owed. Franchisee and its Controlling Principals shall promptly pay all
sums owing to Franchisor and its subsidiaries or afflliates. Such sums shall include all damages, costs
and expenses, including reasonable attorneys' fees, incurred by Franchisor as a result of any default by
Franchisee, which obligation shall give rise to and remain, until paid in full, a lien in favor of Franchisor
against any and all of the personal property, fumishings, equipment, signs, fixtures, and inventory owned
by Franchisee and on the premises operated hereunder at the time of default.
F.
Enforcement Costs. Franchisee and the Controlling Principals shall pay to Franchisor all
damages, costs and expenses, including reasonable attorneys' fees, incurred by Franchisor in connection
with obtaining any remedy available to Franchisor for any violation of this Agreement and subsequent to
the termination or expiration of this Agreement in obtaining injunctive or other relief for the enforcement
of any provisions of this Section XVIII.
G.
Deliver Manuals and Other Materials. Franchisee shall immediately deliver to
Franchisor all Manuals, records, files, instructions, conespondence, all materials related to operating the
Restaurant, including, without limitation, agreements, invoices, and any and all other materials relating to
the operation of the Restaurant in Franchisee's possession or control, and all copies thereof (all of which
are acknowledged to be Franchisor's property), and shall retain no copy or record of any of the
foregoing, except Franchisee's copy ofthis Agreement and of any conespondence between the parties
and any other documents which Franchisee reasonably needs for compliance with any provision of law.
H.
Compliance With Confldentiality and Noncompetition Covenants. Franchisee and the
Controlling Principals shall comply with the non-competifion covenants and the restrictions on
Confidential Information contained in Section X. of this Agreement. Any other person required to
execute similar covenants pursuant to Section X. shall also comply with such covenants.
I.
Franchisor's Option to Purchase Materials Bearing the Marks. Franchisee shall also
immediately fumish Franchisor an itemized list of all advertising and sales promotion materials bearing
the Marks or any of Franchisor's distinctive markings, designs, labels, or other marks thereon, whether
located on Franchisee's premises or under Franchisee's control at any other location. Franchisor shall
have the right to inspect these materials. Franchisor shall have the option, exercisable within thirty (30)
days after such inspection, to purchase any or all of the materials at Franchisee's cost. Materials not
purchased by Franchisor shall not be utilized by Franchisee or any other party for any purpose unless
authorized in writing by Franchisor.
J.
Franchisor's Option to Acquire Leases. I f Franchisee operates the Restaurant under a
lease or sublease for the Restaurant premises with a third party or, with respect to any lease for
equipment used in the operation of the licensed business, then Franchisee shall, at Franchisor's option,
assign to Franchisor any interest which Franchisee has in any lease or sublease for the premises of the
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Restaurant or any equipment related thereto for the consideration set forth in Section XVIII. K. below.
Franchisor may exercise such option at or within thirty (30) days after either termination or (subject to
any existing right to renew) expiration of this Agreement.—Franchisee hereby appoints^Pranehisor itstrue and lawful ogcnt and attorney in foct with full power ond authority, for the sole purpose of
taking such action-as-is necessary to complete the ossignment of Franchisee's interest in ony Icasoor sublcosc for the prcmiscs-of-the-Restanrant upon the exercise of Franchisor's option describedhcrein. This powcr-of-attorncy shall survive the cxpirotion or termination of this Agreements In
the event Franchisor does not elect to exercise its option to acquire the lease or sublease for the
Restaurant premises (or, if applicable, does not exercise the options provided for in Sections XVIII.K.(2)
or (3) below) or does not have such option, Franchisee shall make such modifications or alterafions to the
Restaurant premises as are necessary to distinguish the appearance of the Restaurant from that of other
restaurants operating under the System and shall make such specific additional changes as Franchisor
may reasonably request. If Franchisee fails or refuses to comply with the requirements of this Secfion
XVIII.J., Franchisor shall have the right to enter upon the premises of the licensed business, without
being guilty of trespass or any other crime or tort, to make or cause to be made such changes as may be
required.
K.
Franchisor's Option to Acquire Restaurant and Assets.
(1)
Except as provided in Section XVIII.I., Franchisor shall have the option, to be
exercised within thirty (30) days after termination or expiration of this Agreement, to purchase from
Franchisee any or all of the leasehold interests, furnishings, equipment (including any computer hardware
and software not licensed by Franchisor), signs, fixtures, motor vehicles, supplies, and inventory of
Franchisee related to the operation of the Restaurant (the "Assets"), nt the price ond upon the terms set
forth below: and, if Franchisee owns the Restaurant premises, then Franchisor shall have the
, to be exercised within such thirty f30^ dav period, to purchase the Restaurant
including the land and/or anv buildiup situated thereon tthe "Premises"^.
(ft)
The purchosc price for the Assets shall be equal to twenty five
percent (25%) of the amount, up to the first Three Hundred Thousand Dollars
($300,000.00)» of monthly Net Sales ("Base Amount") of the Rcstouront during the t^vclvc
(12) colendor months immediately preceding the effective dote of termination or expiration
plus thirty five percent (35%) of the amount of monthly Net Soles in excess of the Bosc
Amount during soid period. I f the Rcstouront has been in operation less thon t^velvc (13)
months preceding the effective dote of termination or expiration^ the purchase price shall
be the cost of the Restaurant, less 10% of such cost.—"Cost of the Restaurant" sholl be
defined as Franchisee's—documented expenditures for the equipment, inventory ondIcQSchold improvements of the Rcstouront but sholl not include any charges for Inbor
performed by Franchisee or any family membci's of Franchisee.
(b)
The purchase price for the Assets will be reduced by:
(i)
The total current and long term liabilities of the Restaurant
assumed by Franchisor.—Franchisor will assume oil current ond long term
liabilities (except liabilities to Fronchisee ond the Controlling Principals) up to the
amount of the purchosc price os determined pursuant hereto subject^ however, to
all defenses ovoiloble to Fronchisee.
(ii)
The amount necessary to upgrade, remodel and/or rcpoir the
Rcstouront, as the case may be, to meet Fronchisor's then current architccturol
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plans, specifications, standards,—requirements and—identity for Restaurants,
provided that the omount ottributoblc to upgrading, remodeling ond repairing the
Rcstouront w i l l not exceed one and one half percent (1'/^%) o f t h e Net Sales of the
Rcstouront f r o m the date it opens for business to the effective dote of termination
or expiration, reduced by an amount cquol to the total expenditures mode by
Fronchisee f o r upgrading, remodeling and repairing Restaurant at Franchisor's
request-up to the effective dote of termination or cx|
affiliates and any
(including rcos(
A l l amounts due f r o m Franchisee to Frt
;d in connection with any escrow arrangement
ic price shnll bo allocated omong the Assets in the manner prescribed by Fronchisor.
M
The purchase price f o r the Assets and, i f applicable, for the
Premises, shall be fair market value. Franchisor and Franchisee shall first attempt to determine
the fair market value of the Assets and, i f applicable, the Premises bv mutual agreement. As soon
as either Frqnchisgr or Franchisee decides that mutual agreement will not he reached, it (the
"First Sidc"^ mav Pive written notice fthe " F M V Nofice"> to the other side (the "Second Side"^
demanding that fair i^iark^t yalue he determined through appraisal and including the name of the
annraiser selected hv the First Side. Within 10 davs after the giving of the F M V Notice, the Second
Side shall notify (the "Second Notice"^ the First Side of the appraiser selected bv the Second Side.
provided, i f the Second Side fails to select its appraiser, the appraiser selected bv the First Side
shall be the sole appraiser. Within 15 davs after the selection of tj^e final appraiser, the two
appraisers so selected shall each prepare and submit a proposed fair market value and the average
o f t h e two submissions shall he final and binding. The cost of such appraisal shall be paid in equal
portions bv Franchisor an^ Franchisee, except that each shall bear the fees and exnenses of the
appraiser selected bv it. Each annraiser selected pursuant hereto shall be certified and qualified,
meaning that the appraiser would be considered an exnert for purposes of giving testimony with
respect to fair market value in a judicial or similar proceeding, and independent, meaning that the
appraiser does not directlv or indirectly own anv interest in and is not directiy or indirecfiy in
>l of. controlled bv. or under common control with Franchisor or Franchisee or their
^e owners or affiliates.
The bok
jhase price remaining oftcr the deductions
described above
£^
Unless otherwise mutuallv agreed bv Franchisor and
Franchisee, the purchase price (minus customary pro ratas (including, without limitation, utilities
and taxes) and minus the pav-off of anv exisfing mortgage liens, i f applicable^ will be payable as
follows: ten percent (10%) o f the balance at the time o f closing and the remainder in sixty (60) equal
monthly installments o f principal plus interest at a rate o f interest per annum equal to the prime lending
rate charged by Bonk of AmcricaWells f ^ r g o . National Association or its successors in interest,
determined as o f the closing date with annual adjustments based on the prime rate charged on each
anniversary date. The first payment will be due on the first day of the second calendar month following
closing and the remaining payments on the first day of each month thereafter. On the first payment date,
interest from the date o f closing shall also be paid.
(^
The portics agree that
the purchosc price described in this section is the agreed upon method of arriving ot a price for the
Assets of the Restaurant in the event Fronchisor elects to exercise the option contoincd in this
section and is not-to-be-deemed a conclusive-ind ication of the voluc o f t h e Rcstourant under-other
cireumstanccs. The purchase price shall he allocated among the Assets in the manner prescribed
DAL01:1155855.4J
079684.0103
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(2)
In-addition—to--the-options described above-ond if-FranelHSCC-owns-thc
Restaurant premises, then Franchisor shall hove tho further option, to be exercised-at or withinthirty (30) doys after termination or expiration of this Agreement) to purchase the Restaurant
premises, including any building thereon^ i f applicable^ ot the price and upon the terms set forth
(a)
The purchase price will be the fair market value of the lond and
building, as—determined—by on—independent appraiser selected—by Franchisor and
Franchisee cannot agree on on independent appraiser
Franchisee
Frnnchi
lisor's exer-cise-of-its-optionr-Franehisor-and-4:jicensee-shallHser-wjio-shgll-select-ft-third-indepcndent-appraiser. The
liser-seiected-by the-parties—respective-^pprnisers-shnU determine
the-fair-market-voluc of-soid-land-and -building and his determination-sholl-bc finol ond
binding on- the porties. In-the-event of such appraisal, each party-shall bear-its-own legal
^oisol fces. The purchase-pFice-will-be-payablo in full
)sing minus customary pr-o-t-atfts-(iiicludingy-without-limitation, utilities and taxes)
ond minus the pay off of ony existing niortgogc liens.
—(b (c^
I f Franchisor does not elect to purchase said land and huildingPremi.ses from
Franchisee. Franchisor or its designee will have the option to enter into a lease of said lond and
huildingPremises for a term of not more than ten (10) years with an option by the lessee to extend the
term of the lease for an additional term of ten (10) years. The lease shal! contain the terms and
conditions contained in the form of lease then used by Franchisor in connection with Restaurants owned
and operated by Franchisor. The rental under the lease for the initial ten (10) year term shall be the fair
rental value of the property as determined pursuant to agreement or the appraisal procedure described
above. Said lease, and any renewals or extensions of said lease shall provide that Franchisor or its
designee, as the case may be, may terminate said lease on not less than thirty (30) days written notice, at
any time after the first twelve (12) months of the lease term and that in such an event Franchisor or its
designee, must pay a sum equal to three (3) months rent as the sole and exclusive compensation to the
landlord.
(3)
If-Fronchisee-does-not-own-the-land on which the-Rcstaurant is operated
and Fronchisor exercises its option for an ossignment of the lease os provided in Section XVIII.J.
above. Franchisor may exercise the option described in Section X^^H.K.(2) for the purpose of
purebftsing the building-if owncd-by-Fr-anchisee, with the purchase-price and-terms-dctcrmincd in
occordoncc with procedure described therein. ( 1 ^ With respect to the options described in
Sections XVIII.J. and XVIII.K(l), (2) ond (3) Franchisee shall deliver to Franchisor in a form
satisfactory to Franchisor, such wananties, deeds, releases of lien, bills of sale, assignments and such
other documents and instruments which Franchisor deems necessary in order to perfect Franchisor's title
and possession in and to the properties being purchased or assigned and to meet the requirements of all
tax and govemment authorities. If, at the time of closing, Franchisee has not obtained all of these
certificates and other documents. Franchisor may, in its sole discretion, place the purchase price in
escrow pending issuance of any required certificates or documents.
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(5D
The time for closing of the purchase and sale of the properties described in
Section XVIII.K(l), (2) and (3) shall be a date not later than thirty (30) days after the purchase price is
determined by the portics or the determination of the opproiscrs, whichever is later, unless the
parties mutually agree to designate another date. The time for closing on the assignment of the lease
described in Section XVIII.J. shall be a date no later than ten (10) days after Franchisor's exercise of its
option thereunder unless Franchisor is exercising its options under either-Section XVIII.K(l), (2) or (3)
in which case the date of the closing shall be on the same closing date prescribed for such option.
Closing shall take place at Franchisor's corporate offices or at such other location as the parties may
agree. Franchisor shall have the right (but not the obligation) upon written notice to Franchisee to
assume interim management of the Restaurant during the period following any exercise of the options
described herein on the terms and conditions set forth in Section XIV.E.(3).
L.
Franchisor's Opfion to Acquire Telephone Numbers and Other Business Lisfings. At
Franchisor's option. Franchisee shall assign to Franchisor all rights to the telephone numbers of the
Restaurant and any related Yellow Pages trademark listings, as well as all rights to any Intemet websites,
listings, services, search engines or systems and any other business listings related to the Restaurant.
Franchisee shall execute all forms and documents required by Franchisor, the telephone company,
Intemet provider, or other third party to transfer the telephone service, telephone numbers and other
rights listed above to Franchisor. In addition to any power of attorney signed pursuant to Section
Vn.J., Franchisee hereby appoints Franchisor as its true and lawful agent ond attorney in fact
with full power and authority, for the sole purpose of taking oil action nccessor)^ to complete such
assignment. This power of attorney will survive the expiration or termination of this Agreement.
After the assignment, Franchisee sholl use different telephone numbers and listings at or in
tent business Franchisee
M.
Assignment of Option Rights. Franchisor shall be entitled to assign any and all of its
options in this Section to any other party, without the consent of Franchisee.
N.
Pay Liquidated Damages. Franchisee acknowledges and agrees that in the event this
Agreement is terminated as a result of Franchisee's default, such termination may result in lost future
revenue and profits to Franchisor, harm to the goodwill associated with the System and the Marks, and
increased costs to Franchisor to redevelop or re-franchise the market in which the Restaurant is located.
Franchisor and Franchisee agree that such damages may be difficult to quantify or estimate. Therefore,
Franchisee agrees to pay Franchisor, as liquidated damages for the premature tennination of this
Agreement and not as a penalty for breaching this Agreement or in lieu of any other payment, a lump
sum equal to the weekly average of Franchisee's Net Sales for the fifty-two (52) week period preceding
the termination (or if the Restaurant has not been operating as a CiCi's Pizza restaurant for fifty-two (52)
weeks, the weekly average of Franchisee's Net Sales for the actual period of operations preceding the
termination) multiplied by the applicable royalty fee percentage (as described in Section IV.B.),
multiplied by one hundred four (104) weeks, which is the equivalent of two (2) years, multiplied by
seventy-five percent (75%). Notwithstanding the foregoing sentence, if the number of months remaining
between the date of Franchisor's written notice of termination (or, in the event of termination pursuant to
Section XVII.A.(2), the occunence of the termination event) and the date on which the term of this
Agreement would otherwise have ended pursuant to Section III.A. hereof is less than one hundred four
(104) weeks, then the time period for calculating the amount of liquidated damages shall be the number
of weeks remaining in the term. Liquidated Damages are payable on a weekly basis and shall begin from
the earlier of the termination date or the date that Franchisee ceased to operate the Restaurant, if
different, and shall continue until the earlier of (i) the opening of a replacement CiCi's Pizza restaurant in
the market that was previously served by the Restaurant or by Franchisee or another CiCi's developer or
franchisee or (ii) the original expiration date of the Franchise Agreement.
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The parties acknowledge that a precise calculation of the full extent of the damages which
Franchisor will incur in the event of termination of this Agreement is difficult in the extreme, and agree
that the payment provided under this Section XVIII.N. is reasonable in light of the damages which
Franchisor will incur in the event of termination. In addition to Franchisor's right to the payment of
liquidated damages as provided in this Secfion XVIII.N., Franchisor shall not otherwise be limited in its
ability to recover other monies due under the Agreement (including under Section XVIII.E.) and to
otherwise seek damages or equitable relief for the harm caused by the conduct which gave rise to the
termination, as well as for any other defaults of Franchisee under the Agreement and to obtain such other
relief in law or equity as provided for in this Agreement, including without limitation, enforcing
Franchisee's compliance with the post-termination obligations set forth herein; provided, that Franchisor
shall not be entitled to recover damages for lost future revenue or profits in excess of the liquidated
damages specified in this Section XVIII.N.
XIX.
MISCELLANEOUS
A.
Notices.
(1)
Except as expressly provided in subsection (2) below, any and all notices
required or permitted under this Agreement shall be in writing and shall be delivered by electronic mail
to the parties at the following e-mail addresses:
Notices to Franchisor:
[email protected]
Notices to Franchisee
and Controlling Principals:
[insert cicispizza.com e-mail address issued
to Managing Principal and Operator]
All notices and other written communications shall be sent through Franchisor's server and shall be
deemed delivered and received on the date the transmission is received in the e-mail box designated
above, whether or not the party receiving such message opens and reads the message in a fimely manner.
Franchisor and Franchisee and Franchisee's Managing Principal have, and each of them hereby accept,
the obligation to check, open and read the messages in the e-mail boxes designated above at least once
each business day. Franchisee and Franchisee's Managing Principal further agree to forward any such
message received to the Controlling Principals.
(2)
Upon the expirafion or termination of this Agreement or if, for any reason.
Franchisor no longer provides a cicispizza.com e-mail account to Franchisee, then all future notices shall
be in writing and shall be personally delivered or mailed by expedited delivery service or certified or
registered mail, retum receipt requested, first-class postage prepaid, or sent by prepaid facsimile
(provided that the sender confirms the facsimile by sending an original confirmation copy by expedited
delivery service or certified or registered mail within three (3) business days after transmission) to the
respective parties at the addresses set forth below unless and until a different address has been designated
by written notice to the other party. Any notice shall be deemed to have been given (whether or not
delivery is accepted) at the time of personal delivery or, in the case of expedited delivery service on the
next business day, or, in the case of registered or certified mail, three (3) business days after the date and
time of mailing, or, in the case of facsimile, upon transmission (provided confirmation is sent by
expedited delivery service or registered or certified mail as provided below).
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Notices to Franchisor:
CiCi Enterprises, LP
1080 W. Bethel Road
Coppell, Texas 75019
Attention: Lori Bolin, Complioncc OfficerDi rector
Facsimile: (972) 745-4204
Notices to Franchisee and
the Controlling Principals:
Attention:,
Facsimile:
B.
Entire., AgreemenL This Agreement, the documents refened to herein, and the
Attachments hereto, constitute the entire, full and complete agreement between Franchisor and
Franchisee and the Controlling Principals conceming the subject matter hereof and shall supersede all
prior related agreements between Franchisor and Franchisee and the Controlling Principals; provided,
however, that nothing in this or any related agreement is intended to disclaim the representafions made
by Franchisor in the franchise disclosure document that it fumished to Franchisee. Except for those
permitted to be made unilaterally by Franchisor hereunder, no amendment, change or variance from this
Agreement shall be binding on either party unless mutually agreed to by the parties and executed by their
authorized officers or agents in writing.
C.
No Waiver. No delay, waiver, omission or forbearance on the part of Franchisor to
exercise any right, option, duty or power arising out of any breach or default by Franchisee or the
Controlling Principals under this Agreement shall constitute a waiver by Franchisor to enforce any such
right, option, duty or power against Franchisee or the Controlling Principals, or as to a subsequent breach
or defauh by Franchisee or the Controlling Principals. Acceptance by Franchisor of any payments due to
it hereunder subsequent to the time at which such payments are due shall not be deemed to be a waiver
by Franchisor of any preceding breach by Franchisee or the Controlling Principals of any terms,
provisions, covenants or conditions of this AgreemenL
D.
Procedure for Approval or Consent. Whenever this Agreement requires the prior
approval or consent of Franchisor, Franchisee shall make a timely wrirten request to Franchisor, and such
approval or consent shall be obtained in writing.
E.
No Implied Wananties. Franchisor makes no wananties or guarantees upon which
Franchisee may rely and assumes no liability or obligation to Franchisee or any third party to which it
would not otherwise be subject, by providing any waiver, approval, advice, consent or suggestion to
Franchisee in connection with this Agreement, or by reason of any neglect, delay or denial of any request
therefor.
F.
Force Majeure. If a Force Majeure event shall occur, then Franchisee shall continue to
be obligated to pay to Franchisor any and all amounts that it shall have duly become obligated to pay in
accordance with the terms of this Agreement prior to the occunence of any Force Majeure event and the
Indemnitees shall continue to be indemnified and held harmless by Franchisee in accordance with
Section XV. Except as provided in the immediately preceding sentence herein, none of the parties hereto
shall be held liable for a failure to comply with any terms and conditions of this Agreement when such
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failure is caused by an event of Force Majeure. Upon the occunence of any event of the type refened to
herein, the party affected thereby shall give prompt nofice thereof to the other parties, together with a
description of the event, the duration for which the party expects its ability to comply with the provisions
of the Agreement to be affected thereby and a plan for resuming operation under the Agreement, which
the party shall promptly undertake and maintain with due diligence. Such affected party shall be liable
for failure to give timely notice only to the extent of damage actually caused.
G.
MEDIATION. FRANCHISEE AND THE CONTROLLING PRINCIPALS AND
FRANCHISOR AGREE TO SUBMIT ANY CLAIM, CONTROVERSY OR DISPUTE ARISING
OUT OF OR RELATING TO THIS AGREEMENT (AND ATTACHMENTS) OR THE
RELATIONSHIP CREATED BY THIS AGREEMENT TO NON-BINDING MEDIATION
PRIOR TO BRINGING SUCH CLAIM, CONTROVERSY OR DISPUTE IN A COURT OR
BEFORE ANY OTHER TRIBUNAL. THE MEDIATION SHALL BE CONDUCTED TIIROUGH
EITHER AN INDIVIDUAL MEDIATOR OR A MEDIATOR APPOINTED BY A MEDIATION
SERVICES ORGANIZATION OR BODY, EXPERIENCED IN THE MEDIATION OF FOOD
SERVICE BUSINESS DISPUTES, AGREED UPON BY THE PARTIES TO THE MEDIATION
AND, FAILING SUCH AGREEMENT WITHIN A REASONABLE PERIOD OF TIME AFTER
ANV PARTY HAS NOTIFIED THE OTHER(S) OF ITS DESIRE TO SEEK MEDIATION OF
ANY CLAIM, CONTROVERSY OR DISPUTE (NOT TO EXCEED FIFTEEN (15) DAYS), BY
THE AMERICAN ARBITRATION ASSOCIATION IN ACCORDANCE WITH ITS RULES
GOVERNING MEDIATION, AT FRANCHISOR'S CORPORATE HEADQUARTERS. THE
COSTS AND EXPENSES OF MEDIATION, INCLUDING COMPENSATION AND EXPENSES
OF THE MEDIATOR (AND EXCEPT FOR THE ATTORNEYS FEES INCURRED BY ANY
PARTY), SHALL BE BORNE BY THE PARTIES EQUALLY. IF THE PARTIES TO THE
MEDIATION ARE UNABLE TO RESOLVE THE CLAIM, CONTROVERSY OR DISPUTE
WITHIN NINETY (90) DAYS AFTER THE MEDIATOR HAS BEEN CHOSEN, THEN ANY
PARTY MAY BRING A LEGAL PROCEEDING UNDER SECTION XIX.H. BELOW TO
RESOLVE SUCH CLAIM, CONTROVERSY OR DISPUTE UNLESS SUCH TIME PERIOD IS
EXTENDED BY WRITTEN AGREEMENT OF THE PARTIES. NOTWITHSTANDING THE
FOREGOING, FRANCHISOR MAY BRING AN ACTION (1) FOR MONIES OWED, (2) FOR
INJUNCTIVE OR OTHER EXTRAORDINARY RELIEF, OR (3) INVOLVING THE
POSSESSION OR DISPOSITION OF, OR OTHER RELIEF RELATING TO, REAL
PROPERTY IN A COURT HAVING JURISDICTION AND IN ACCORDANCE WITH
SECTION XIX.H. BELOW, WITHOUT FIRST SUBMITTING SUCH ACTION TO
MEDIATION.
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H.
JURISDICTION AND VENUE: GOVERNING LAW. WITH RESPECT TO ANY
CLAIMS, CONTROVERSIES OR DISPUTES WHICH ARE NOT FINALLY RESOLVED
THROUGH MEDIATION OR AS OTHERWISE PROVIDED ABOVE, FRANCHISEE AIVD THE
CONTROLLING PRINCIPALS HEREBY IRREVOCABLY SUBMIT THEMSELVES TO THE
JXnUSDICTION OF THE STATE AND FEDERAL DISTRICT COURTS LOCATED IN THE
STATE, COUNTY OR JUDICIAL DISTRICT IN WHICH THE FRANCHISOR'S PRINCIPAL
PLACE OF BUSINESS IS LOCATED, FRANCHISEE AND THE CONTROLLING
PRINCIPALS HEREBY WAIVE A L L QUESTIONS OF PERSONAL JURISDICTION FOR THE
PURPOSE OF CARRYING OUT THIS PROVISION AND AGREE THAT ANY LITIGATION
RELATING TO OR ARISING OUT OF THIS AGREEMENT OR THE RELATIONSHIP
CREATED BY THIS AGREEMENT SHALL TAKE PLACE IN THE STATE OF TEXAS.
FRANCHISEE AND THE CONTROLLING PRINCIPALS HEREBY AGREE THAT SERVICE
OF PROCESS MAY BE MADE UPON ANY OF THEM BY ANY MEANS ALLOWED BY
TEXAS OR FEDERAL LAW. FRANCHISEE AND THE CONTROLLING PRINCIPALS
FURTHER AGREE THAT VENUE FOR ANY PROCEEDING RELATING TO OR ARISING
OUT OF THIS AGREEMENT SHALL BE THE COUNTY OR JUDICIAL DISTRICT IN
WHICH THE FRANCHISOR'S PRINCIPAL PLACE OF BUSINESS IS LOCATED;
NOTWITHSTANDING THE FOREGOING, FRANCHISOR SHALL HAVE THE RIGHT AND
OPTION TO BRING ANY ACTION (1) FOR MONIES OWED, (2) FOR INJUNCTIVE OR
OTHER EXTRAORDINARY RELIEF OR (3) INVOLVING POSSESSION OR DISPOSITION
OF, OR OTHER RELIEF RELATING TO, REAL PROPERTY, IN ANY STATE OR FEDERAL
DISTRICT COURT WHICH WOULD ALSO HAVE JTURISDICTION IN THE ABSENCE OF
THIS PROVISION OR WHICH FRANCHISOR DEEMS APPROPRIATE TO OBTAIN THE
RELIEF SOUGHT. WITH RESPECT TO A L L CLAIMS, CONTROVERSIES, DISPUTES OR
ACTIONS, THIS AGREEMENT SHALL BE INTERPRETED AND CONSTRUED UNDER
TEXAS LAW (EXCEPT FOR TEXAS CHOICE OF LAW RULES).
I.
PARTIES' AGREEMENT REGARDING GOVERNING LAW AND FORUM.
FRANCHISEE, THE CONTROLLING PRINCIPALS AND FRANCHISOR ACKNOWLEDGE
THAT THE PARTIES' AGREEMENT REGARDING APPLICABLE STATE LAW AND
FORUM SET FORTH IN SECTION XIX.H. ABOVE PROVIDE EACH OF THE PARTIES
WITH THE MUTUAL BENEFIT OF UNIFORM INTERPRETATION OF THIS AGREEMENT
AND ANY DISPUTE ARISING OUT OF THIS AGREEMENT OR THE PARTIES'
RELATIONSHIP CREATED BY THIS AGREEMENT. EACH OF FRANCHISEE, THE
CONTROLLING PRINCIPALS AND FRANCHISOR FURTHER ACKNOWLEDGES THE
RECEIPT AND SUFFICIENCY OF MUTUAL CONSIDERATION FOR SUCH BENEFIT.
J.
EXECUTION AND ACCEPTANCE OF AGREEMENT. FRANCHISEE, THE
CONTROLLING PRINCIPALS AND FRANCHISOR ACKNOWLEDGE THAT THE
EXECUTION OF THIS AGREEMENT AND ACCEPTANCE OF THE TERMS BY THE
PARTIES OCCURRED IN COPPELL, TEXAS, AND FURTHER ACKNOWLEDGE THAT THE
PERFORMANCE OF CERTAIN OBLIGATIONS OF FRANCHISEE ARISING UNDER THIS
AGREEMENT, INCLUDING, BUT NOT LIMITED TO, THE PAYMENT OF MONIES DUE
HEREUNDER AND THE SATISFACTION OF CERTAIN TRAINING REQUIREMENTS OF
FRANCHISOR, SHALL OCCUR IN COPPELL, TEXAS.
K.
INTERNAL DISPUTE RESOLUTION PROGRAM. WITHOUT LIMITING ANY
OF THE FOREGOING, FRANCHISOR RESERVES THE RIGHT, AT ANY TIME, TO
CREATE A DISPUTE RESOLUTION PROGRAM AND RELATED SPECIFICATIONS,
STANDARDS, PROCEDURES AND RULES FOR THE IMPLEMENTATION THEREOF TO BE
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ADMINISTERED BY FRANCHISOR OR ITS DESIGNEES FOR THE BENEFIT OF A L L
FRANCHISEES AND/OR DEVELOPERS CONDUCTING BUSINESS UNDER THE SYSTEM,
THE STANDARDS, SPECIFICATIONS, PROCEDURES AND RULES FOR SUCH DISPUTE
RESOLUTION PROGRAM SHALL BE MADE PART OF THE MANUALS AND IF MADE
PART OF THE MANUALS, ON EITHER A VOLUNTARY OR MANDATORY BASIS,
FRANCHISEE SHALL COMPLY WITH A L L SUCH STANDARDS, SPECIFICATIONS,
PROCEDURES AND RULES IN SEEKING RESOLUTION OF ANY CLAIMS,
CONTROVERSIES OR DISPUTES WITH OR INVOLVING FRANCHISOR OR OTHER
FRANCHISEES OR DEVELOPERS, IF APPLICABLE UNDER THE PROGRAM, IF SUCH
DISPUTE RESOLUTION PROGRAM IS MADE MANDATORY, THEN FRANCHISEE AND
FRANCHISOR AGREE TO SUBMIT ANY CLAIMS, CONTROVERSIES OR DISPUTES
ARISING OUT OF OR RELATING TO THIS AGREEMENT (AND ATTACHMENTS) OR THE
RELATIONSHIP CREATED BY THIS AGREEMENT FOR RESOLUTION IN ACCORDANCE
WITH SUCH DISPUTE RESOLUTION PROGRAM PRIOR TO SEEKING RESOLUTION OF
SUCH CLAIMS, CONTROVERSIES OR DISPUTES IN THE MANNER DESCRIBED IN
SECTIONS XIX.G.-J. (PROVIDED THAT THE PROVISIONS OF SECTION XIX
CONCERNING FRANCHISOR'S RIGHT TO SEEK RELIEF IN A COURT FOR CERTAIN
ACTIONS INCLUDING FOR INJUNCTIVE OR OTHER EXTRAORDINARY RELIEF SHALL
NOT BE SUPERSEDED OR AFFECTED BY THIS SECTION XIX.K), OR IF SUCH CLAIM,
CONTROVERSY OR DISPUTE RELATES TO ANOTHER FRANCHISEE OR DEVELOPER,
FRANCHISEE AGREES TO PARTICIPATE IN THE PROGRAM AND SUBMIT ANY SUCH
CLAIMS, CONTROVERSIES OR DISPUTES IN ACCORDANCE WITH THE PROGRAM'S
STANDARDS, SPECIFICATIONS, PROCEDURES AND RULES, PRIOR TO SEEKING
RESOLUTION OF SUCH CLAIM BY ANY OTHER JUDICIAL OR LEGALLY AVAILABLE
MEANS.
L.
WAIVER OF DAMAGES: WAIVER OF JURY TRIAL.
(1)
FRANCHISEE AND THE CONTROLLING PRINCIPALS HEREBY
WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO OR CLAIM
OR ANY PUNITIVE, EXEMPLARY, INCIDENTAL, INDIRECT, SPECIAL, CONSEQUENTIAL
OR OTHER DAMAGES (INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS)
AGAINST FRANCHISOR, ITS AFFILIATES, AND THE OFFICERS, DIRECTORS,
SHAREHOLDERS,
PARTNERS,
AGENTS,
REPRESENTATIVES,
INDEPENDENT
CONTRACTORS, SERVANTS AND EMPLOYEES OF EACH OF THEM, IN THEIR
CORPORATE AND INDIVIDUAL CAPACITIES, ARISING OUT OF ANY CAUSE
WHATSOEVER (WHETHER SUCH CAUSE BE BASED IN CONTRACT, NEGLIGENCE,
STRICT LIABILITY, OTHER TORT OR OTHERWISE) AND AGREE THAT IN THE EVENT
OF A DISPUTE, FRANCHISEE AND THE CONTROLLING PRINCIPALS SHALL BE
LIMITED TO THE RECOVERY OF ANY ACTUAL DAMAGES SUSTAINED BY THEM. IF
ANY OTHER TERM OF THIS AGREEMENT IS FOUND OR DETERMINED TO BE
UNCONSCIONABLE OR UNENFORCEABLE FOR ANY REASON, THE FOREGOING
PROVISIONS OF WAIVER BY AGREEMENT OF PUNITIVE, EXEMPLARY, INCIDENTAL,
INDIRECT, SPECIAL, CONSEQUENTIAL OR OTHER DAMAGES (INCLUDING, WITHOUT
LIMITATION, LOSS OF PROFITS) SHALL CONTINUE IN FULL FORCE AND EFFECT.
(2)
FRANCHISOR
AND
FRANCHISEE
AND
FRANCHISEE'S
CONTROLLING PRINCIPALS HEREBY FURTHER IRREVOCABLY WAIVE ANY RIGHT
TO A JURY TRIAL I N ANY ACTION ARISING OUT OF OR IN CONNECTION WITH THIS
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AGREEMENT OR ANY OTHER AGREEMENTS BETWEEN THEM OR THEIR RESPECTIVE
AFFILIATES.
M.
JUDGMENT:
DISCRETION.
FRANCHISEE, THE CONTROLLING
PRINCIPALS AND FRANCHISOR ACKNOWLEDGE THAT VARIOUS PROVISIONS OF
THIS AGREEMENT SPECIFY CERTAIN MATTERS THAT ARE WITHIN THE DISCRETION
OR JUDGMENT OF FRANCHISOR OR ARE OTHERWISE TO BE DETERMINED
UNILATERALLY BY FRANCHISOR. IF THE EXERCISE OF FRANCHISOR'S DISCRETION
OR JUDGMENT AS TO ANY SUCH MATTER IS SUBSEQUENTLY CHALLENGED, THE
PARTIES TO THIS AGREEMENT EXPRESSLY DIRECT THE TRIER OF FACT THAT
FRANCHISOR'S RELIANCE ON A BUSINESS REASON IN THE EXERCISE OF ITS
DISCRETION OR JUDGMENT IS TO BE VIEWED AS A REASONABLE AND PROPER
EXERCISE OF SUCH DISCRETION OR JUDGMENT, WITHOUT REGARD TO WHETHER
OTHER REASONS FOR ITS DECISION MAY EXIST AND WITHOUT REGARD TO
WHETHER THE TRIER OF FACT WOULD INDEPENDENTLY ACCORD THE SAME
WEIGHT TO THE BUSINESS REASON.
N.
Counterpart Execution. This Agreement may be executed in multiple counterparts, each
of which when so executed shall be an original, and all of which shall constitute one and the same
instmment.
O.
Headings. The captions used in connection with the sections and subsections of this
Agreement are inserted only for purpose of reference. Such captions shall not be deemed to govem,
limit, modify or in any other manner affect the scope, meaning or intent of the provisions of this
Agreement or any part thereof nor shall such captions otherwise be given any legal effect.
P.
Survival. Any obligation of Franchisee or the Controlling Principals that contemplates
performance of such obligation after termination or expiration of this Agreement or the transfer of any
interest of Franchisee or the Controlling Principals therein, shall be deemed to survive such termination,
expiration or transfer.
Q.
Severability. Except as expressly provided to the contrary herein, each portion, section,
part, term and provision of this Agreement shall be considered severable; and if, for any reason, any
portion, section, part, term or provision is determined to be invalid and contrary to, or in conflict with,
any existing or future law or regulation by a court or agency having valid jurisdiction, this shall not
impair the operation of, or have any other effect upon, the other portions, sections, parts, terms or
provisions of this Agreement that may remain otherwise intelligible, and the larter shall continue to be
given full force and effect and bind the parties; the invalid portions, sections, parts, terms or provisions
shall be deemed not to be part of this Agreement; and there shall be automatically added such portion,
section, part, term or provision as similar as possible to that which was severed which shall be valid and
not contrary to or in conflict with any law or regulation.
R.
Gender. All references herein to the masculine, neuter or singular shall be constmed to
include the masculine, feminine, neuter or plural, where applicable. Without limhing the obligations
individually undertaken by the Controlling Principals under this Agreement, all acknowledgments,
promises, covenants, agreements and obligations made or undertaken by Franchisee in this Agreement
shall be deemed, jointly and severally, undertaken by all of the Controlling Principals.
079684.0103
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S.
Remedies Cumulative. All rights and remedies of the parties to this Agreement shall be
cumulative and not altemative, in addition to and not exclusive of any other rights or remedies which are
provided for herein or which may be available at law or in equity in case of any breach, failure or default
or threatened breach, failure or default of any term, provision or condition of this Agreement or any other
agreement between Franchisee or any of its afflliates, and Franchisor or any of its affiliates. The rights
and remedies of the parties to this Agreement shall be continuing and shall not be exhausted by any one
or more uses thereof, and may be exercised at any time or from time to time as often as may be
expedient; and any option or election to enforce any such right or remedy may be exercised or taken at
any time and from time to time. The expiration, earlier termination or exercise of Franchisor's rights
pursuant to Section XVII. of this Agreement shall not discharge or release Franchisee or any of the
Controlling Principals from any liability or obligation then accrued, or any liability or obligation
continuing beyond, or arising out of, the expiration, the earlier termination or the exercise of such rights
under this Agreement. Additionally, in the event there is any dispute between the parties arising out
of or relating to this Agreement, Franchisee and the Controlling Principals shall pay all court costs and
reasonable attomeys' fees incuned by Franchisor in any such dispute.
T.
Definitions. The term "Principals" shall include, collectively and individually.
Franchisee's spouse, if Franchisee is an individual, all officers and directors of Franchisee (including the
officers and directors of any general partner of Franchisee) whom Franchisor designates as Franchisee's
Principals, all holders of an ownership interest in Franchisee and in any entity directly or indirectly
controlling Franchisee, and any other person or entity controlling, controlled by, or under common
control with Franchisee. The initial Franchisee's Principals shall be listed in Attachment C to this
Agreement. The term "Controlling Principals" shall include, collectively and individually, any
Franchisee's Principal who has been designated by Franchisor as a Controlling Principal hereunder. For
the purposes of this Agreement and the Attachments hereto, an "affiliate" of any entity means any entity
that is controlled by, controlling or under common control with such other entity.
U.
No Third Party Beneficiary. Except as expressly provided to the contrary herein, nothing
in this Agreement is intended, nor shall be deemed, to confer upon any person or legal entity other than
Franchisee, Franchisor, Franchisor's officers, directors and personnel and such of Franchisee's and
Franchisor's respective successors and assigns as may be contemplated (and, as to Franchisee, authorized
by Section XIV.), any rights or remedies under or as a result of this Agreement.
V.
Expenses. Except as otherwise expressly provided herein, any action or obligation that
Franchisee is required to undertake or may be required to undertake in this Agreement, or any action or
obligation that Franchisor performs on Franchisee's behalf in accordance with the terms of this
Agreement, shall be at Franchisee's sole expense. Franchisee agrees to pay or reimburse Franchisor for
any such expenses on demand.
W.
Public Announcements. Franchisee agrees that Franchisor may use Franchisee's name
and otherwise identify Franchisee in any public announcement regarding the existence or nature of this
Franchise Agreement or any matters contemplated herein.
XX,
ACKNOWLEDGMENTS
A.
Independent Investigation. Franchisee acknowledges that it has conducted an
independent investigation of the business venture contemplated by this Agreement and recognizes that
the success of this business venture involves substantial business risks and will largely depend upon the
ability of Franchisee. Franchisor expressly disclaims making, and Franchisee acknowledges that it has
079684.0103
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not received or relied on, any wananty or guarantee, express or implied, as to the potential volume,
profits or success of the business venture contemplated by this Agreement.
B.
Consuhation with Advisors. Franchisee acknowledges that Franchisee has received, read
and understands this Agreement and the related Attachments and agreements and that Franchisor has
afforded Franchisee sufficient time and opportunity to consult with advisors selected by Franchisee about
the potential benefits and risks of entering into this Agreement.
C
FTC Rule Compliance. Franchisee acknowledges that it received a complete copy of the
disclosure document required by the Trade Regulation Rule of the Federal Trade Commission entitled
"Disclosure Requirements and Prohibitions Conceming Franchising" and this Agreement and all related
Attachments and agreements at least fourteen (14) calendar days prior to the date on which this
Agreement was executed.
D.
Reliance on Franchisor. Franchisee acknowledges that Franchisee is relying solely on
Franchisor, and not on any afflliated entities or parent companies related to Franchisor, with regard to
Franchisor's financial and other obligations under this Agreement, and no employee or other person
speaking on behalf of, or otherwise representing, Franchisor has made any statement or promise to the
effect that Franchisor's afflliated entities or parent companies guarantee Franchisor's performance or
financially back Franchisor.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed
by its duly authorized representative as of the date indicated below.
FRANCHISOR:
CiCi Enterprises, LP,
a Delaware limited partnership
By: CiCi GP, LLC, its General Partner
By:
Name:
Title:
Date:
FRANCHISEE:
By:.
Name;
Title: _
Date:
DALO 1 4455855,41194849.3
079684.0103
-63-
CONTROLLING PRINCIPAL SIGNATURE PAGE
(GUARANTY AND ASSUMPTION AGREEMENT)
This Guaranty is given by the undersigned (each, a "Guarantor") as of the
day of
20- , in order to induce Franchisor to accept
("Franchisee") as a franchisee of
Franchisor.
Each Guarantor is included in the term "Controlling Principals" as described in Section XIX.T.
of the Franchise Agreement. Each has read the terms and conditions of the Franchise Agreement and
acknowledges that the execution of this Guaranty and the undertakings of the Controlling Principals in
the Franchise Agreement are in partial consideration for, and a condition to the granting of the franchise
evidenced by the Franchise Agreement, and that Franchisor would not have granted the franchise without
the execution of this Guaranty and such undertakings by each of the undersigned.
Each Guarantor individually, jointly and severally, unconditionally and irrevocably guarantees to
Franchisor and its successors and assigns that all of Franchisee's obligations under the Franchise
Agreement and under any other franchise or other agreement now existing or hereafter entered into
between Franchisee and Franchisor and under any promissory note or other debt instrument that may now
or hereafter be executed by Franchisee in favor of Franchisor will be punctually paid and performed.
Upon default by Franchisee or upon notice from Franchisor, each Guarantor will immediately make each
payment and perform each obligation required of Franchisee under the Franchise Agreement.
Without affecting the obligations of any of the Guarantors under this guaranty. Franchisor may,
without notice to the Guarantors, waive, renew, extend, modify, amend or release any indebtedness or
obligation of Franchisee or settle, adjust or compromise any claims that Franchisor may have against
Franchisee. Each Guarantor waives all demands and notices of every kind with respect to the
enforcement of this guaranty, including, without limitation, notice of presentment, demand for payment
or performance by Franchisee, any default by Franchisee or any Guarantor and any release of any
Guarantor or other security for this guaranty or the obligations of Franchisee. Franchisor may pursue its
rights against any ofthe Guarantors without first exhausting its remedies against Franchisee and without
joining any other Guarantor hereto and no delay on the part of Franchisor in the exercise of any right or
remedy shall operate as a waiver of such right or remedy, and no single or partial exercise by Franchisor
of any right or remedy shall preclude the further exercise of such right or remedy. Upon receipt by
Franchisor of notice of the death of any Guarantor, the estate of the deceased will be bound by the
foregoing guaranty, but only for defaults and obligations under the Franchise Agreement existing at the
time of death, and in such event, the obligations ofthe remaining Guarantors shall continue in full force
and effect.
Each Guarantor individually, jointly and severally, makes all of the covenants, representations,
warranties and agreements of the Controlling Principals set forth in the Franchise Agreement and is
obligated to perform thereunder. Additionally, the individual designated as Managing Principal
individually, jointly and severally, makes all of the covenants, representations and agreements of
Franchisee and of the Managing Principal set forth in the Franchise Agreement and is obligated to
perform thereunder.
Franchisor may designate additional guarantors, and those guarantors will be required to execute
a counterpart of this guaranty.
The undertakings, agreements and assumption of obligations set forth herein shall continue in
full force and effect until the expiration by their terms of Franchisee's obligations under the Franchise
Agreements.
DALO 1:1155855.41194849.3
079684.0103
Controlling Principals' Guaranty and Assumption Agreement- Page 1
ALL DISPUTES INVOLVING A GUARANTOR (WHETHER OR NOT RELATED TO THE
GUARANTY) SHALL BE RESOLVED AND ADJUDICATED IN ACCORDANCE WITH THE
APPLICABLE PROVISIONS OF THE FRANCHISE AGREEMENT AS SET FORTH IN ARTICLE
XIX., WHICH INCLUDES, AMONG OTHER THflvJGS, A WAIVER OF TRIAL BY JURY AND A
WAIVER TO THE EXTENT PERMITTED BY LAW OF ANY RIGHT TO OR CLAIM OF ANY
PUNITIVE, EXEMPLARY, INCIDENTAL, INDIRECT, SPECIAL, CONSEQUENTIAL OR OTHER
DAMAGES (flvICLUDING LOSS OF PROFITS).
GUARANTORS
'Name:
Name:
' Designates Managing Principal
DALO 1:1155855.41I94849.3
079684.0103
Controlling Principals' Guaranty and Assumption Agreement- Page 2
Consent to Franchisor's Purchase Option
Under Section XIV.E,(5) ofthe Franchise Agreement, upon the death or permanent disability of on
individuol Franchisee or the Managing Principal of an entity' Franchisee, the Franchisor has an
option-to-puFchasc thc-intcrcst of the individual Franchisee in the Franchise Agreement ond-tbeRestaurant or the interest ofthe Managing Principal in the Franchisee entity^ The Franchisor-maythis option at the price ond on the terms sot forth in Section XIV.E.(5), and4f-exerciscdrit-extends to the interest of any other Principal of the4Franehiscc-on-the-saffle-tcFmSi
As o Pi
described al
o Principol, you ore being asked to sign this consent to the-optionXIV.E.(5).
lis-conscht docs not mcon that you ore guarantying the Franchisee's perfermonco under
the-Franchisc Agreement. It means that you conscnt-to-the-provisions-of-Section XIV.E.(5) and
ogrcc thot any Interest (os defined in Scction-Xl-V;E.(5))-which-you own (or any interest4n-such anIntcrost, whether a community property-interest, joint ownership interest, or otherwise) will be
tit
Principal or Controlling Principal:
Spouse of Pi
Contrc
Signature
d
Pr-inted-Name
Printed Nome
Signature
Signature
j»
•i'l • m*£\
Printed-Name
Attachment A
SELECTED TERMS:
DESIGNATED AREA, APPROVED LOCATION, AND OPENING DATE
I.
DESIGNATED AREA
DALO 1 115.58.55.41194849.3
079684.0103
Consent to Option^ - Solo Page
Pursuant to Section LB. of the Franchise Agreement, the Approved Location of the Restaurant
shall be within the following geographic area:
2.
APPROVED LOCATION
Pursuant to Section I.B.(l) of the Franchise Agreement, the Restaurant shall be located at the
following approved location:
3.
PROTECTED AREA
Pursuant to Section LB.(2) of the Franchise Agreement, the Protected Area shall be described as
follows:
4.
OPENflMG DATE
Pursuant to Section ILE. of the Franchise Agreement, the Opening Date of the Restaurant is
, 20_.
DALO 1:1155855.41194849.3
079684.0103
Consent to Option^ - Solo Page
Attachment B
SITE SELECTION ADDENDUM TO CICI'S PIZZA FRANCHISE AGREEMENT (TO BE
SIGNED ONLY FOR NEW RESTAURANTS^
THIS ADDENDUM ("Site Selection Addendum") is made part of, and incorporated into, the
Franchise Agreement between CiCi Enterprises, LP ("Franchisor") and
("Franchisee") dated
, 20
(the "Franchise Agreement").
Recitals
Franchisor and Franchisee have entered into the Franchise Agreement not pursuant to any
Development Agreement.
Franchisor and Franchisee desire to modify the Franchise Agreement to provide for certain site
selection procedures and obligations with respect to the Restaurant.
NOW, THEREFORE, Franchisor and Franchisee expressly covenant and agree as follows:
A.
Site Selection. Franchisee assumes all cost, liability, expense and responsibility for
selecting, obtaining and developing a site for the Restaurant within the Designated Area described in
Attachment A to the Franchise Agreement. Franchisee shall not make any binding commitment to a
prospective vendor or lessor of real estate with respect to a site for the Restaurant unless the site is
approved as set forth below. Franchisee acknowledges that the selection, procurement and development
of a site for the Restaurant is Franchisee's responsibility. Franchisee shall engage a licensed commercial
real estate broker approved by Franchisor in connection with the selection and acquisition of a site for
a Restaurant (in addition to any other professionals Franchisee may choose to consult or engage).
Franchisee acknowledges that Franchisor's approval of a prospective site and the rendering of assistance
in the selection of a site does not constitute a representation, promise, wananty or guarantee by
Franchisor that the Restaurant operated at that site will be profitable or otherwise successful.
B.
Site Approval. Prior to acquiring a site for each Restaurant by lease or purchase,
Franchisee shall select a site for each Restaurant that satisfies Franchisor's site selection requirements
and shall submit to Franchisor a description of the site and such other information as Franchisor may
require, including, without limitation:
(a)
evidence satisfactory to Franchisor demonstrating that the site satisfies
Franchisor's site selection requirements including, but not limited to, a letter of intent or other evidence
satisfactory to Franchisor which confirms Franchisee's favorable prospects for obtaining the site; and
(b)
following Franchisor's preliminary approval of the site, a copy of the proposed
purchase agreement or lease, as applicable, and such other information and materials as Franchisor may
reasonably require. No lease shall be approved by Franchisor unless an addendum to the lease,
containing covenants, in substantially the form of those in Schedule 1 hereto, is artached to the lease and
incorporated therein. If Franchisee occupies a location owned by a related party. Franchisee and the
owner must enter into a formal lease containing arms-length terms. Franchisee shall pay or
responsible for itsthe reasonable attomey's fees incuned in connection with itsthe compliance review
DALO 1:11558S5.411948493
079684.0103
B- 1
of the proposed purchase ogreemcnt or lease. Franchisee must provide a fullv executed copy of the
lease to Franchisor prior to the Restaurant opening date.
All such information must be submitted in the form and delivered in the manner specified by Franchisor.
Franchisor will respond to the request for site approval in a timely manner after receipt of all information
and materials required under this Section B., prepared in the required format. Franchisor shall have no
obligation to act on a request by Franchisee for site approval until such time as Franchisor shall have
received all required materials in the format and delivered in the manner required by Franchisor. No site
may be used for a Restaurant unless it is first approved in writing by Franchisor, and Franchisor may
approve or disapprove the proposed site in its sole discretion. Franchisee's failure to comply with this
provision shall constitute a material breach of the Franchise Agreement.
C.
Site Acquisition. Within ninety (90) days after Franchisor has approved the site for each
Restaurant as described above, Franchisee shall acquire the site by purchase or lease. Failure by
Franchisee to acquire the Location for each Restaurant within the time and in the manner required herein
shall constitute a material breach under this Agreement.
D.
Franchisor's Obligations. Franchisor agrees to provide the services described below
with regard to the Restaurant:
(1)
Site Selection Assistance. Such site selection assistance as Franchisor may deem
advisable.
(2)
On-Site Evaluation. Such on-site evaluation as Franchisor may deem necessary
on its own initiative or in response to Franchisee's reasonable request for site approval; provided,
however, that Franchisor shall not provide an on-site evaluation for any proposed site prior to the receipt
of all required information and materials conceming such site pursuant to this Site Selection Addendum.
Upon Franchisee's request. Franchisor (or its designee) will provide at no additional charge to Franchisee
one (1) on-site evaluation for the Restaurant; provided, that Franchisor shall have the right to require
Franchisee to reimburse Franchisor (or its designee) for its reasonable expenses incurred in making such
on-site evaluation. Thereafter, if additional on-site evaluations are deemed appropriate by Franchisor, or
upon Franchisee's reasonable request. Franchisor reserves the right to charge a reasonable fee for
performing each such evaluation and a further amount representing the reasonable expenses incuned by
Franchisor (or its designee) in connection with such on-site evaluation, including, without limitation, the
cost of travel, lodging and meals.
E.
Capitalized Terms. All capitalized terms used but not defined in this Site Selection
Addendum have the meanings prescribed in the Franchise Agreement.
DALO 1:44558S5^1194849.3
079684.0103
B- 2
F.
Conflict with Franchise Agreement. Whenever there is a conflict or inconsistency
between this Site Selection Addendum and any provision of the Franchise Agreement or the attachments
thereto, the provisions of this Site Selection Addendum shall supersede and modify such provision.
FRANCHISOR:
CiCi Enterprises, LP,
a Delaware limited partnership
By: CiCi GP, LLC, its General Partner
By:
Name:.
Title:
FRANCHISEE:
By:.
Name:.
Title:
DAL01:115S855.4J
079684.0103
B- 3
Schedule 1
LEASE ADDENDUM
This Addendum is attached to and made a part of the Lease Agreement (the "Lease") dated
, 20
(the "Lease Execution Date") between
("Landlord") and
("Tenant") for space (the "Premises") described in the
Lease which is a part of the
Shopping Center (the "Shopping Center") in
,
. All capitalized terms shall have the same meanings as in the
Lease unless defined otherwise in this Addendum. If any of the terms of this Addendum conflict with
any of the terms of the Lease, the provisions of this Addendum shall prevail. .
Requirements of Franchisor.
(a)
Landlord acknowledges that Tenant is a franchisee of Franchisor (as defined
below), and that the restaurant, which includes ancillary use of video games and vending machines,
located at the Premises ("Restaurant") is operated under the CiCi's Pizza franchise system, pursuant to a
franchise agreement ("Franchise Agreement") between Tenant and Franchisor. Landlord consents to
Tenant's use at the Premises of such marks and signs, decor items, trade dress, color schemes, fonts,
logos and related components of the CiCi's Pizza system and interior finish out, furniture, fixtures and
equipment, as Franchisor may prescribe for the Restaurant. During the term of the Franchise Agreement,
the Premises may be used only to operate the Restaurant. The term "Franchisor" refers to CiCi
Enteiprises, L.P., or any of its related entities, afflliates, subsidiaries, parents, surviving entities from any
merger or acquisition, successors or assigns.
Landlord and Tenant agree that to the extent permitted under applicable law, Franchisor
is a third party beneficiary of all of the rights and privileges set forth in this Addendum, and it is intended
by Landlord and Tenant that Franchisor will be entitled to enforce this Addendum. Landlord and Tenant
further agree that Franchisor is not liable for and does not assume any duties, obligations or liabilities
under this Addendum or the Lease unless agreed to in writing by Franchisor
(b)
Landlord agrees to furnish to Franchisor copies of all letters and notices sent to
Tenant pertaining to the Lease and the Premises at the same time that such letters and notices are sent to
TenanL Without limiting the foregoing, if Tenant defaults under the Lease, Landlord shall notify
Franchisor in writing of the defauh. If Tenant has failed to cure such default within the applicable cure
period. Landlord shall give Franchisor further written notice of such failure ("Franchisor Notice"). After
Franchisor receives the Franchisor Notice, Franchisor shall have the right (but not the obligation) to cure
Tenant's default within fifteen (15) days after Franchisor receives the Franchisor Notice. During such
fifteen (15) day period. Landlord agrees not to exercise any of Landlord's remedies arising from Tenant's
default, and such cure by Franchisor shall be accepted by Landlord. Except as set forth below, such cure
by Franchisor shall not be deemed to be an elecfion to assume the Lease.
DALO 1:44558554 J
079684.0103
Schedule 1 - 1
(c)
If Franchisor cures Tenant's default, or if Franchisor notifies Landlord that the
Franchise Agreement has been terminated (which termination shall constitute a non-curable default under
the Lease when Landlord receives Franchisor's notice of the default). Landlord agrees, upon Franchisor's
written request, to assign to Franchisor all rights that Landlord may have under the Lease to remove and
evict Tenant from the Premises and shall cooperate with Franchisor to pursue such action to a
conclusion.
(d)
If Franchisor cures Tenant's default or notifies Landlord of the termination of the
Franchise Agreement, Franchisor shall have the right and option, upon written notice to Landlord, to do
the following:
1.
Perform the terms of the Lease on behalf of the Tenant (notwithstanding
any removal or eviction of Tenant) for a period not to exceed six (6) months from the first (1st) date of
any cure by Franchisor for which Franchisor shall remain liable, without assuming the Lease; or
2.
At any time within or at the conclusion of such six (6) month period,
assume the Lease for the remainder of the current term, together with the right to exercise any applicable
renewal options. In such event, Landlord and Franchisor shall enter into a commercially reasonable
agreement to document such assumption. Franchisor is not a party to the Lease and shall have no
liability under the Lease unless the Lease is assigned to, and assumed by, Franchisor as herein provided.
(e)
If, during the six (6) month period set forth in Section (1) (e)l above or at any
time after the assignment to and assumption of the Lease, by Franchisor contemplated in Section (l)(e)2.
Franchisor shall notify Landlord that the franchise for the Restaurant is being granted to another CiCi's
Pizza franchisee, Landlord shall permit the assignment of the Lease to the franchisee, without any further
consent of Landlord being required as a condition thereto and without the payment of any fee or other
cost requirement. Thereafter, Franchisor shall be released from all further liabilities under the Lease.
The parties agree to execute any commercially reasonable documents in furtherance of this section.
(f)
Before the Franchise Agreement is terminated. Tenant will not assign the Lease,
sublease all or any portion of the Premises, or renew or extend the term thereof without the prior written
consent of Franchisor, nor shall Landlord and Tenant amend or otherwise modify the Lease in any
manner that could materially affect any of the terms, covenants and obligations of the Lease without the
prior wrirten consent of Franchisor.
(g)
Following any default under the Lease or the Franchise Agreement or the
expiration or termination of the Lease or the Franchise Agreement, Franchisor, its employees, contractors
and agents shall have the right to enter the Premises to make any modification or alteration necessary to
protect the CiCi's Pizza system signs, marks and intellectual property rights or to cure any defauh under
the Franchise Agreement or under the Lease, without being guilty of trespass or any other crime or tort.
This right shall include the right to remove exterior signs and awnings from the Premises and any
Shopping Center pylon or monument sign provided Franchisor shall patch the fascia at its sole expense.
Franchisor's rights shall also include the right to de-identify the Premises as a Restaurant, which may
include removing interior signs, decor items and materials displaying any marks, designs or logos owned
by Franchisor and removing all other items identifying the Premises as a CiCi's Restaurant and to make
such other modifications (such as repainting) as are reasonably necessary to protect the CiCi's Pizza
system signs marks and intellectual property rights. Landlord will cooperate with and assist Franchisor in
gaining access to the Premises. If applicable law prohibits Landlord from allowing Franchisor to remove
Tenant's exterior and pylon signage. Landlord agrees upon written request from Franchisor to remove the
exterior and pylon signage and store them inside of the Premises. Similarly if Tenant's lender claims a
DALOl :115.5855.41194849.3
079684.0103
Schedule 1 - 2
security interest in Tenant's signs, fumiture, fixtures or equipment Landlord shall nevertheless allow
Franchisor to remove Tenant's exterior and pylon signage and sequester the signs, service items,
fumiture, fixtures or equipment within the Premises outside the view of the general public for Tenant's
lender. Landlord shall not be responsible for any expenses or damages arising from any such action by
Franchisor. Tenant hereby releases, acquits and discharges Franchisor and Landlord, their respective
subsidiaries, afflliates, successors and assigns and the officers, directors, shareholders, partners,
employees, agents and representatives of each of them, from all claims, demands, accounts, actions and
causes of action, known or unknown, vested or contingent, which any of them may have, ever had, now
has, or may hereafter have by reason of any event, transaction or circumstance arising out of or relating
to the exercise of Franchisor's rights pursuant to the Addendum.
(h)
All notices sent pursuant to this Addendum shall be sent in the manner set forth
in the Lease, and delivery of such notices shall be effective as of the times provided for in the Lease. For
notices under the Lease, Franchisor's mailing address shall be 1080 W. Bethel Road, Coppell, Texas
75019; Attn: Real Estate Department, which address may be changed by written notice to Landlord in the
manner provided in the Lease.
Landlord wanants, represents and covenants to Tenant that presently, and during the term of the Lease:
(i)
No part of the Shopping Center shall be leased, sold or used for a bar, pool hall,
dance hall, theaters, bingo parlor or other place of gambling (whether legal or illegal) or a sexually
oriented business including, but not limited to, "romance boutiques", any so-called head shop, or adult
video store (excluding incidental videos sold or rented in a video store as a part of a general, family
oriented video store ).
(j)
An adjacent space to the Premises shall not be leased, sold or used for a
veterinary clinic, boarding/lodging of animals, pet shop, hair salon or nail parlor.
(k)
There are no restrictions, covenants or agreements or zoning regulations
(including pre-existing tenant exclusives and use restrictions) that would prevent the Tenant from selling
pizza, (or any other food item or beverage), operating a buffet style restaurant, operating video games or
using vending machines within the Premises.
If Landlord breaches any of the foregoing representations, wananties or covenants or any such
representations or wananties prove to be untme, then, in addition to any other remedy, Landlord agrees
to indemnify, save and hold Tenant harmless from any loss, cost, expense or damage (including
reasonable attomey's fees and court costs) that Tenant may incur through such breach by Landlord.
(1)
Landlord, on behalf of itself and its successors and assigns, agrees that
regardless of any designated Shopping Center business hours. Tenant shall have the right to operate the
Restaurant on such days and during such hours as are designated by Franchisor regardless of the typical
hours of the Shopping Center.
(m)
Relocation Clause. The Lease shall not contain any provision that would allow
the Landlord to relocate the Premises or the Tenant.
(n)
Radius Restriction: The Lease shall not contain a radius restriction.
(o)
Continuous Operations. The Lease shall not contain any provision that would
require Tenant to continuously operate.
DALO 1:1155855.41194849.3
079684.0103
Schedule 1 - 3
Attachment C
STATEMENT OF OWNERSHIP INTERESTS AND FRANCHISEE'S PRINCIPALS
A.
The following is a list of all shareholders, partners, members or other investors in
Franchisee (including all those who own or hold a direct or indirect interest in Franchisee) and a
description of the nature of their interest:
Name
Nature of Interest
Percentage of
Ownership
B.
The following is a list of all of Franchisee's Principals described in and designated
pursuant to Section XIX.T. of the Franchise Agreement, each of whom shall (unless executing a
Controlling Principal guaranty) execute the Confldentiality Agreement and Ancillary Covenants Not to
Compete substantially in the form set forth in Attachment D to the Franchise Agreement.
DALO 1:445585541194849.3
079684.0103
C - Solo Page
Attachment D
CONFIDENTIALITY AGREEMENT AND
ANCILLARY COVENANTS NOT TO COMPETE
This Agreement is made and entered into this
day of
CiCi Enterprises, LP, a Delaware limited partnership ("Franchisor"),
("Franchisee") and
("Covenantor").
, 20 .20. between
RECITALS
WHEREAS, Franchisor has developed a system (the "System") for the development and
operation of restaurants under the name and mark CiCi's Pizza ("Restaurants"); and
WHEREAS, the System is identified by certain trade names, service marks, trademarks, logos,
emblems and indicia of origin, including, but not limited to, the mark "CiCi's Pizza" and such other trade
names, service marks, trademarks, logos, insignia, slogans, emblems, designs and commercial symbols as
Franchisor may develop in the future to identify for the public the source of services and products
marketed under such marks and under the System and representing the System's high standards of
quality, appearance and service and distinctive exterior and interior design, decor and color scheme and
fumishings ("Marks") and includes, without limitation, certain confidential or proprietary information,
trade secrets, knowledge, or know-how conceming the methods of conducting the business contemplated
by the Franchise Agreement, including without limitation the methods of operating a CiCi's Pizza
restaurant and other information contained in the Manuals or otherwise disclosed in writing
("Confidential Information"); and
WHEREAS, the Marks and Confidential Information provide economic advantages to Franchisor
and to its developers and franchisees operating under the System and are not generally known to, and are
not readily ascertainable by proper means by. Franchisor's competitors who could obtain economic value
from knowledge and use of the Confidential Information; and
WHEREAS, Franchisor has taken and intends to take all reasonable steps to maintain the
confidentiality and secrecy of the Confidential Information; and
WHEREAS, Franchisor has granted Franchisee the limited right to operate a Restaurant using the
System, the Marks and the Confidential Information for the period defmed in the franchise agreement
made and entered into on
, 20
("Franchise Agreement"), by and between
Franchisor and Franchisee; and
WHEREAS, Franchisor and Franchisee have agreed in the Franchise Agreement on the
importance to Franchisor and to Franchisee and other licensed users of the System of restricting the use,
access and dissemination of the Confidential Information; and
WHEREAS, it will be necessary for certain employees, agents, independent contractors, officers,
directors and interest holders of Franchisee, or any entity having an interest in Franchisee ("Covenantor")
DALOl 1155855.41
079684.0103
D- 1
to have access to and to use some or all of the Confidential Information in the management and operation
of Franchisee's business using the System; and
WHEREAS, Franchisee has agreed to obtain from those persons' written agreements protecting
the Confidential Information and the System against unfair competition; and
WHEREAS, Covenantor wishes to remain, or wishes to become associated with or employed by
Franchisee; and
WHEREAS, Covenantor wishes and needs to receive and use the Confidential Information in the
course of his employment by or association with Franchisee in order to effectively perform his services
for Franchisee; and
WHEREAS, Covenantor acknowledges that receipt of and the right to use the Confidential
Information constitutes independent valuable consideration for the representations, promises and
covenants made by Covenantor herein;
NOW, THEREFORE, in consideration of the mutual covenants and obligations contained herein,
the parties agree as follows:
Confldentiality Agreement
1.
Franchisor and/or Franchisee shall disclose to Covenantor some or all of the Confidential
Information relating to the System. All information and materials, including, without limitation, any
manuals, drawings, specifications, techniques and compilations of data which Franchisor provides to
Franchisee and/or Covenantor shall be deemed Confidential Information for the purposes of this
Agreement.
2.
Covenantor shall receive the Confidential Information in confidence and shall, at all
times, maintain it in confidence, and use such Confidential Information only in the course of his
employment or association with a Franchisee and then only in connection with the development and/or
operation by Franchisee of a Restaurant under a valid Franchise or Development Agreement with
Franchisor.
3.
Covenantor shall not at any time make copies of any documents or compilations
containing some or all ofthe Confidential Information without Franchisor's express written permission.
4.
Covenantor shall not at any time disclose or permit the disclosure of the Confidential
Informafion except to other employees of Franchisee and only to the limited extent necessary to train or
assist other employees of Franchisee in the development or operation of a Restaurant using the System.
5.
Covenantor shall sunender any material containing some or all of the Confidential
Information to Franchisee or Franchisor, upon request, or upon termination of employment by
Franchisee, or upon conclusion of the use for which such information or material may have been
fumished to Covenantor and shall not retain any copies or extracts thereof in any form.
6.
Covenantor shall not at any time, directly or indirectly, do any act or omit to do any act
that would or would likely be injurious or prejudicial to the goodwill associated with the Confidential
Information and the System.
DALO 1:1155855.41I94849.3
079684.0103
D- 2
7.
All Manuals are loaned by Franchisor to Franchisee for limited purposes only and remain
the property of Franchisor and may not be reproduced, in whole or in part, without Franchisor's written
consent.
Covenants Not to Compete
In order to protect Franchisor's legitimate business interests, including, without limitafion, the goodwill
associated with the System and the Marks, confidentiality and value of the Confidenfial Information, and
in consideration for the disclosure to Covenantor of the Confidential Information, Covenantor further
agrees and covenants as follows:
1.
During the term of Covenantor's employment by or association with Developer,
Covenantor agrees and covenants that Covenantor will not:
a.
Divert, or attempt to divert, directly or indirectly, any business, business
opportunity, or customer of the Restaurant to any competitor.
b.
Except with respect to facilities operated under valid Franchise Agreements with
Franchisor, directly or indirectly, for himself or through, on behalf of, or in conjunction with any person,
partnership, limited liability company, corporation or other entity or association, without the prior written
consent of Franchisor, own, maintain, operate, engage in, be employed by or have any financial or
beneficial interest in (including any interest in limited liability companies, corporations, partnerships,
tmsts, unincorporated associations or joint ventures), advise, assist, aid, make loans to or otherwise
support, any business located within the United States, its tenitories or commonwealths, or any other
country, province, state or geographic area in which Franchisor has used, sought registration of or
registered the Marks or the same or similar marks or operates or licenses others to operate a business
under the Marks or the same or similar marks, which business (i) is of o character and concept similar
to CiCi's brond food service facifities, including a business which offers as a primary' menu item or
mix of menu items derives more than fiftv percent (50%'> of its revepue from sellin}> pizza
(including, but not limited to, fresh, frozen or unbaked pizza) and other Italian foods using the
distribution methods (including dine-in, carry-out or catering) authorized by Franchisor, or (ii) functions
as a commissary to sell or lease to or supply any such business.
2.
For a continuous unintermpted period of one (1) year following the earlier of the
expirafion, termination or transfer of all of Franchisee's interest in the Franchise Agreement or the
termination of Covenantor's association with or employment by Franchisee, Covenantor agrees and
covenants that Covenantor will not:
a.
Divert, or attempt to divert, directly or indirectly, any business, business
opportunity or customer of the Restaurant to any competitor.
b.
Employ, or seek to employ, any person who is at the time or was within the
preceding sixty (60) days employed by Franchisor or any franchisee or developer of Franchisor, or
otherwise directly or indirectly induce such person to leave that person's employment.
DALO 1:1155855.41194849.3
079684.0103
D- 3
c.
Except with respect to facilities operated under valid Franchise Agreements with
Franchisor, directly or indirectly, for himself or through, on behalf of or in conjunction with any person,
partnership, limited liability company, corporation or other entity or association, own, maintain, operate,
engage in, be employed by or have any financial or beneficial interest in (including any interest in limited
liability companies, corporations, partnerships, tmsts, unincorporated associations or joint ventures),
advise, assist, aid, make loans to or otherwise support, any business that (i) is of a choroctcr and
concept similar to CiCi's brand food service facilities, including o business which offers os o
primary menu item or mix of menu itcmsderives more than fiftv percent (50%) of its revenue from
selliup pizza (including, but not limited to, fresh, frozen or unbaked pizza) and other Italian foods using
the distribution methods (including dine-in, carry-out or catering) authorized by Franchisor, or (ii)
functions as a commissary to sell or lease to or supply any such business and which is located, or is
intended to be located:
(1)
at the Approved Location; or
(2)
within the Protected Area; or
(3)
if this Agreement is executed pursuant to a development agreement,
within the development tenitory; or
(4)
within a twentvten (2010^ mile radius of (A) the Approved Location,
(B) the Protected Area, (C) the development tenitory, if applicable, or (D) any CiCi's brand food service
facility in existence or under constmction as of the earlier of (x) the expiration or termination of, or the
transfer of all of Franchisee's interest in, the Franchise Agreement; or (y) the termination of
Covenantor's association with or employment by Franchisee, as applicable.
Miscellaneous
1.
Franchisee shall make all commercially reasonable efforts to ensure that Covenantor
complies with this Agreement.
2.
Covenantor agrees that in the event of a breach of this Agreement, Franchisor would be
ineparably injured and be without an adequate remedy at law. Therefore, in the event of such a breach,
or threatened or attempted breach of any of the provisions hereof. Franchisor shall be entitled to enforce
the provisions of this Agreement and shall be entitled, in addition to any other remedies which are made
available to it at law or in equity, including the right to terminate the Franchise Agreement, to a
temporary and/or permanent injunction and a decree for the specific performance of the terms of this
Agreement, without the necessity of showing actual or threatened harm and without being required to
fumish a bond or other security.
3.
Covenantor agrees to pay all expenses (including court costs and reasonable attomeys'
fees) incuned by Franchisor and Franchisee in enforcing this Agreement. Notwithstanding the foregoing.
Franchisor may recover its costs incuned in enforcing this Agreement from Franchisee without the
necessity of first making demand upon or bringing an action against Covenantor.
DALO 1:115585S.4I194849J
079684.0103
D- 4
4.
Any failure by Franchisor or the Franchisee to object to or take action with respect to any
breach of any provision of this Agreement by Covenantor shall not operate or be constmed as a waiver of
or consent to that breach or any subsequent breach by Covenantor.
5.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT
REFERENCE TO TEXAS CHOICE OF LAW PRINCIPLES. COVENANTOR HEREBY
IRREVOCABLY SUBMITS HIMSELF TO THE JtHUSDICTION OF THE STATE AND
FEDERAL DISTRICT COURTS LOCATED IN THE STATE, COUNTY OR JUDICIAL
DISTRICT IN WHICH THE FRANCHISOR'S PRINCIPAL PLACE OF BUSINESS IS
LOCATED.
COVENANTOR HEREBY WAIVES ALL QUESTIONS OF PERSONAL
JURISDICTION OR VENUE FOR THE PURPOSE OF CARRYING OUT THIS PROVISION.
COVENANTOR HEREBY AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON
H I M I N ANY PROCEEDING RELATING TO OR ARISING UNDER THIS AGREEMENT OR
THE RELATIONSHIP CREATED BY THIS AGREEMENT BY ANY MEANS ALLOWED BY
TEXAS OR FEDERAL LAW. COVENANTOR FURTHER AGREES THAT VENUE FOR ANY
PROCEEDING RELATING TO OR ARISING OUT OF THIS AGREEMENT SHALL BE THE
COUNTY OR JUDICIAL DISTRICT I N WHICH THE FRANCHISOR'S PRINCIPAL PLACE
OF BUSINESS IS LOCATED; PROVIDED, HOWEVER, WITH RESPECT TO ANY ACTION
WHICH INCLUDES INJUNCTIVE RELIEF OR OTHER EXTRAORDINARY RELIEF,
FRANCHISOR OR FRANCHISEE MAY BRING SUCH ACTION IN ANY COURT IN ANY
STATE WHICH HAS JURISDICTION.
6.
The parties acknowledge and agree that each of the covenants contained herein contain
reasonable limitations as to time, geographical area, and scope of activity to be restrained and do not
impose a greater restraint than is necessary to protect the goodwill or other business interests of
Franchisor. The parties agree that each of the foregoing covenants shall be construed as independent of
any other covenant or provision of this Agreement. If all or any portion of a covenant in this Agreement
is held unreasonable or unenforceable by a court or agency having valid jurisdiction in any unappealed
final decision to which Franchisor is a party. Covenantor expressly agrees to be bound by any lesser
covenant subsumed within the terms of such covenant that imposes the maximum duty permitted by law,
as if the resulting covenant were separately stated in and made a part of this Agreement.
7.
This Agreement contains the entire agreement of the parties regarding the subject matter
hereof. This Agreement may be modified only by a duly authorized writing executed by all parties.
8.
All notices and demands required to be given hereunder shall be in writing and shall be
personally delivered or mailed by expedited delivery service or certified or registered mail, retum receipt
requested,first-classpostage prepaid, or by prepaid facsimile or electronic mail (provided that the sender
confirms the facsimile or electronic mail by sending an original confirmation copy by expedited delivery
service or certified or registered mail within three (3) business days after transmission), to the respective
parties at the following addresses unless and until a different address has been designated by written
notice to the other parties.
DALOl :H5585S4imS42a
079684.0103
D- 5
If directed to Franchisor, the notice shall be addressed to:
CiCi Enterprises, LP
1080 W. Bethel Road
Coppell, Texas 75019
Attention: Lori Bolin, Compliance OfficorDii
Facsimile: (972) 745-4204
If directed to Franchisee, the notice shall be addressed to:
Attention:.
Facsimile:
If directed to Covenantor, the notice shall be addressed to:
Attention:.
Facsimile:
Any notice shall be deemed to have been given at the time of personal delivery or, in the case of
expedited delivery service on the next business day, or, in the case of registered or certified mail three (3)
business days after the date and time of mailing, or, in the case of facsimile or electronic mail, upon
transmission (provided confirmation is sent by expedited delivery service or registered or certified mail
as provided above). Any change in the foregoing addresses shall be effected by giving fifteen (15) days
written notice of such change to the other parties.
9.
The rights and remedies of Franchisor under this Agreement are fully assignable and
transferable and shall inure to the benefit of its respective affiliates, successors and assigns. The
respective obligations of Franchisee and Covenantor hereunder may not be assigned by Franchisee or
Covenantor, without the prior written consent of Franchisor.
DALO 1:145585&41194849.3
079684.0103
D- 6
IN WITNESS WHEREOF, the undersigned have entered into this Agreement as witnessed by
their signatures below.
FRANCHISOR:
CiCi Enterprises, LP,
a Delaware limited partnership
By: CiCi GP, LLC, its General Partner
By:.
Name:
Title: _
Date:
FRANCHISEE:
By:
Name:
Title: _
Date:
COVENANTOR:
By:
Name:
Title: _
Date:
DALO 1 115.5855.41194849.3
079684.0103
D-7
Attachment E
ELECTRONIC FUNDS TRANSFER
AUTHORIZATION TO HONOR CHARGES DRAWN BY AND PAYABLE TO
CICI ENTERPRISES, LP/PAYEE
BANK NAME
ACCOUNT #
ABA#
FEIN
JMC RESTAURANT DISTRIBUTION, LP/PAYEE
BANK NAME
ACCOUNT #
ABA#
FEIN
The undersigned Depositor hereby authorizes and requests the Depository designated below to honor
and to charge to the following designated account, checks, and electronic debits (collectively, "debits")
drawn on such account which are payable to either or both of the above named Payees. It is agreed that
Depository's rights with respect to each such debit shall be the same as i f it were a check drawn and
signed by the Depositor. It is further agreed that if any such debit is not honored, whether with or without
cause and whether intentionally or inadvertently. Depository shall be under no liability whatsoever. This
authorization shall continue in force until Depository and Payee have received at least thirty (30) days
written notification from Depositor of its termination.
The Depositor agrees with respect to any action taken pursuant to the above authorization:
(1)
To indemnify the Depository and hold it harmless from any loss it may suffer resulting from or in
connection with any debit, including, without limitation, execution and issuance of any check, draft or
order, whether or not genuine, purporting to be authorized or executed by the Payee and received by the
Depository in the regular course of business for the purpose of payment, including any costs or expenses
reasonably incuned in connection therewith.
(2)
To indemnify Payee and the Depository for any loss arising in the event that any such debit shall
be dishonored, whether with or without cause and whether intentionally or inadvertently.
(3)
To defend at Depositor's own cost and expense any action which might be brought by a
depositor or any other persons because of any actions taken by the Depository or Payee pursuant to the
foregoing request and authorization, or in any manner arising by reason of the Depository's or Payee's
participation therein.
DALO 11155855.41194849.3
079684.0103
E- 1
Name of Depository:.
Name of Depositor: _
Designated Bank Acct.:
(Please attach one voided check for the above account.)
Store Location:
Store #:
For informafion call:
Address:
Phone #:
Fax#:
Name of Franchisee/Depositor (please print)
By:
Signature and Title of Authorized Representative
Date:
DALO 11155855.41194849.3
079684.0103
E- 2
Attachment F
ASSIGNMENT AND AUTHORIZATION
This Agreement will constitute an assignment by
, a franchisee of CiCi
Enterprises, LP ("CiCi's") of Marketing Funds and Cooperative Media Advertising Funds (collectively,
"Marketing Allowances") and Mechanical Services Funds provided by Coca-Cola Company
("Company") in connection with the purchase and promotion of Company's post-mix products.
Company offers a competitive marketing program to CiCi's and its franchisees which includes
Marketing Allowances to be used in the promotion of Company's products by means of marketing
activities. featuring Company's renditions of Company's trademarks and/or logos. Company also
provides CiCi's and its franchisees a service fund to offset the cost of mechanical service. In order to
increase the value of such system-wide marketing and advertising activities and to defray the cost of
participation in such activities, I hereby assign to CiCi's and authorize Company to pay directly to CiCi's
any and all Marketing Allowances and Mechanical Service Funds which are based on purchases of the
Company's post-mix products by any and all CiCi's Pizza franchise restaurants owned by me.
1 also understand that promotional support and business development funds will be paid to CiCi's
on behalf of the CiCi's Pizza System (including CiCi's Pizza outlets owned by CiCi's or Participating
Franchisees) and are intended to reimburse CiCi's for expenditures for approved activities and
advertising designed to benefit the system.
Agreed to and effective this
By:.
Name:.
Tftle^-
~DALLDOCS:181574.v2
220091-4
day of
, 20
.
AMENDMENT TO CICI ENTERPRISES, LP
FRANCHISE AGREEMENT
FOR THE STATE OF CALIFORNIA
The CiCi Enterprises, LP Franchise Agreement between
("Franchisee" or "You") and CiCi Enterprises, LP (the "Franchisor") dated
(the
"Agreement") shall be amended by the addition of the following language, which shall be considered an
integral part of the Agreement (the "Amendment"):
CALIFORNIA LAW MODIFICATIONS
1.
The California Department of Corporations requires that certain provisions contained in
franchise documents be amended to be consistent with Califomia law, including the Califomia Franchise
Investment Law, CAL. CORP. CODE Section 31000 et seq., and the Califomia Franchise Relations Act,
CAL. BUS. & PROF. CODE Section 20000 et seq. To the extent that the Agreement contains provisions
that are inconsistent with the following, such provisions are hereby amended:
DAL0I:1195371.1
079684.0103
a.
California Business and Professions Code Sections 20000 through 20043 provide
rights to the franchisee conceming termination or non-renewal of a franchise. If
the franchise agreement contains a provision that is inconsistent with the law, the
law will control.
b.
The franchise agreement provides for termination upon bankruptcy. This
provision may not be enforceable under federal bankruptcy law (11 U.S.C.A.
Sec. 101 etseq.).
c.
The franchise agreement contains a covenant not to compete which extends
beyond the termination of the franchise. This provision may not be enforceable
under California law.
d.
The franchise agreement requires mediation through either an individual
mediator or a mediator appointed by a mediation services organization or body,
experienced in the mediation of food service business disputes, agreed upon by
the parties. If no agreement, mediation to be conducted by the American
Arbitration Association at Franchisor's corporate headquarters with the costs
being bome equally by the parties. Prospective franchisees are encouraged to
consult private legal counsel to determine the applicability of California and
federal laws (such as Business and Professions Code Secfion 20040.5, Code of
Civil Procedure Section 1281, and the Federal Arbitrafion Act) to any provisions
of a franchise agreement restricting venue to a forum outside the State of
Califomia.
e.
The franchise agreement requires application of the laws of Texas This provision
may not be enforceable under Califomia law.
2.
Each provision of this Amendment shall be effective only to the extent that the
jurisdictional requirements of the Califomia law applicable to the provision are met independent of this
Amendment. This Amendment shall have no force or effect if such jurisdictional requirements are not
met.
IN WITNESS WHEREOF, the Franchisee on behalf of itself and its owners acknowledges that it
has read and understands the contents of this Amendment, tliat it has had the opportunity to obtain the
advice of counsel, and that it intends to comply with this Amendment and be bound thereby. The parties
have duly executed and delivered this Amendment to the Agreement on
.
, 20 .
FRANCHISOR:
CiCi Enterprises, LP,
a Delaware limited partnership
By: CiCi GP, LLC, its Genera! Partner
By:.
Name:
Title: '
FRANCHISEE:
By:.
Name:
Title:
DAL01:1195371.1
079684.0103
-2-
AMENDMENT TO CICI ENTERPRISES, LP
FRANCHISE AGREEMENT
FOR THE STATE OF ILLINOIS
The CiCi Enterprises, LP Franchise Agreement between
("Franchisee" or
"You") and CiCi Enterprises, LP (the "Company") dated
(the "Agreement") shall be
amended by the addition of the following language, which shall be considered an integral part of the
Agreement (the "Amendment"):
ILLINOIS LAW MODIFICATIONS
1.
The Illinois Attorney General's Office requires that certain provisions contained in
franchise documents be amended to be consistent with Illinois law, including the Franchise Disclosure
Act of 1987, 815 ILCS 705/1-44. To the extent that this Agreement contains provisions that are
inconsistent with the following, such provisions are hereby amended:
DAL01:1I95371.1
079684.0103
a.
Illinois Franchise Disclosure Act paragraphs 705/19 and 705/20 providerightsto
You concerning nonrenewal and termination of this Agreement. If this
Agreement (or any exhibit or attachment to this Agreement) contains a provision
that is inconsistent with the Acl, the Act will control.
b.
Any release of claims or acknowledgments of fact contained in the Agreement
(or in any exhibit or attachment to this Agreement) that would negate or remove
from judicial review any statement, misrepresentation or action that would
violate the Act, or a rule or order under the Act shall be void and arc hereby
deleted regarding claims under the Act.
c.
I f this Agreement (or any exhibit or attachment to this Agreement) requires
litigafion to be conducted in a fomm other than the State of Illinois, the
requirement is void regarding claims under the Illinois Franchise Disclosure Act.
d.
If this Agreement (or any exhibit or attachment to this Agreement) requires that it
be governed by a state's law, other than the State of Illinois, to the extent that
such law conflicts with the Illinois Franchise Disclosure Act, the Act will control.
e.
The Work Evaluation Agreement and Confidentiality Agreement provide that a
law other than Illinois law applies. To the extent that the application of another
law conflicts with the Illinois Franchise Disclosure Act's requirement that Illinois
law govern, the Act will control.
2.
Section XVIIA.(3)(r) shall be deleted and replaced with the following:
(r)
If Franchisee misuses or makes any unauthorized use of the Marks or otherwise
materially impairs the goodwill associated therewith or Franchisor's rights therein; provided that,
notwithstanding the above. Franchisee shall be enfitled to notice of such breach and shall have
seventy-two (72) hours to cure such default;
3.
Section XVIlA.(3)(v) shall be deleted and replaced with the following:
(v)
Anything in this Agreement to the contrary notwithstanding, if Franchisee fails to
have a certified Manager on duty at the Restaurant during all hours of operation, as required by
Section VII.E.9., and fails to cure such default within seventy-two (72) hours following notice from
Franchisor.
4.
Section XX.C should be deleted and replaced with the following:
C
FTC Rule Compliance. Franchisee acknowledges that it received a complete
copy of this Agreement and all related Attachments and agreements at least seven (7) calendar
days prior to the date on which this Agreement was executed. Franchisee further acknowledges
that it has received the disclosure document required by the Trade Regulation Rule ofthe Federal
Trade Commission entitled "Disclosure Requirements and Prohibitions Concerning Franchising"
at least fourteen (14) calendar days prior to the date on which this Agreement was executed.
5.
Each provision of this Amendment shall be effective only to the extent that the
jurisdictional requirements of the Illinois Franchise Disclosure Act, with respect to each such provision,
are met independent of this Amendment. This Amendment shall have no force or effect if such
jurisdictional requirements are not met.
DALOlrl 195371.1
079684.0103
-2-
IN WITNESS WHEREOF, the Franchisee on behalf of itself and its owners acknowledges that it
has read and understands the contents of this Amendment, that it has had the opportunity to obtain the
advice of counsel, and that it intends to comply with this Amendment and be bound thereby. The parties
have duly executed and delivered this Amendment to the Agreement on
,
20 .
FRANCHISOR:
CiCi Enterprises, LP,
a Delaware limited partnership
By: CiCi GP, LLC, its General Partner
By:.
Name:.
Title:
FRANCHISEE:
By:.
Name:
Title:
DAL01:1195371.1
079684.0103
-3 -
AMENDMENT TO CICI ENTERPRISES, LP
FRANCHISE AGREEMENT AND WORK EVALUATION AGREEMENT
FOR THE STATE OF MARYLAND
The CiCi Enterprises, LP Franchise Agreement between
("Franchisee" or "You") and CiCi Enterprises, LP (the "Franchisor") dated
(the
"Agreement") shall be amended by the addition of the following language, which shall be considered an
integral part of the Agreement (the "Amendment"):
MARYLAND LAW MODIFICATIONS
1.
The Maryland Securities Division requires that certain provisions contained in franchise
documents be amended to be consistent with Maryland law, including the Maryland Franchise
Registrafion and Disclosure Law, MD. CODE ANN., BUS. REG. §§ 14-201 to 14-233 (2004 Repl. Vol.).
To the extent that this Agreement contains provisions that are inconsistent with the following, such
provisions are hereby amended:
a.
Under the Maryland Franchise Registration and Disclosure Law ("Law"), the
general release required as a condition of renewal, sale, and/or
assignment/transfer does not apply to any liability under the Law.
Any provision in the Agreement that requires you to disclaim and/or
acknowledge the occurrence or nonoccurrence ofany act that violates the Law as
a condition to purchase a franchise, is amended to exclude such representation.
Additionally, such representation will not act as a release, estoppel or waiver of
any liability incuned under the Law.
b.
Any requirement in the Franchise Agreement and the Work Evaluation
Agreement that litigation be conducted in a forum other than the State of
Maryland shall not be interpreted to limit any rights Franchisee may have under
Secfion 14-216(c)(25) of the Maryland Franchise Registrafion and Disclosure
Law to bring suit in the State of Maryland.
c.
Any claims that Franchisee may have under the Maryland Franchise Registration
and Disclosure Law must be brought within 3 years after the grant of the
franchise.
2.
Each provision of this Amendment shall be effective only to the extent that the
jurisdictional requirements of the Maryland Franchise Registration and Disclosure Law, with respect to
each such provision, are met independent of this Amendment. This Amendment shall have no force or
effect if such jurisdictional requirements are not met.
DAL0I:1I95371.1
079684.0103
IN WITNESS WHEREOF, the Franchisee on behalf of itself and its owners acknowledges that it
has read and understands the contents of this Amendment, that it has had the opportunity to obtain the
advice of counsel, and that it intends to comply with this Amendment and be bound thereby. The parties
have duly executed and delivered this Amendment to the Agreement on
, 20 .
FRANCHISOR:
CiCi Enterprises, LP,
a Delaware limited partnership
By: CiCi GP, LLC, its General Partner
By:.
Name:.
Title:
FRANCHISEE:
By:.
Name:
Title:
DAL01;1195371.1
079684.0103
-2-
AMENDMENT TO CICI ENTERPRISES, LP
FRANCHISE AGREEMENT AND FRANCHISE DISCLOSURE DOCUMENT
FOR THE STATE OF MINNESOTA
The CiCi Enterprises, LP Franchise Agreement between
("Franchisee" or "You") and CiCi Enterprises, LP ("Franchisor") dated
(the
"Agreement") shall be amended by the addition of the following language, which shall be considered an
integral part of the Agreement (the "Amendment"):
MINNESOTA LAW MODIFICATIONS
1.
The Commissioner of Commerce for the State of Minnesota requires that certain
provisions contained infranchisedocuments be amended to be consistent with Minnesota Franchise Act,
Minn. Stat. Section SOC.Ol et seq., and of the Rules and Regulations promulgated under the Act
(collecfively the "Franchise Act"). To the extent that the Agreement/and or disclosure document contains
provisions that are inconsistent with the following, such provisions are hereby amended:
a.
The Minnesota Department of Commerce requires that franchisors indemnify
Minnesota franchisees against liability to third parties resulting from claims by
third parties that the franchisee's use of the franchisor's proprietary marks
infringes trademark rights of the third party.
b.
Minn. Stat. Sec. 80C14, Subds. 3, 4., and 5 requires, except in certain specified
cases, that a franchisee be given 90 days notice of termination (with 60 days to
cure) and 180 days notice for non-renewal of the franchise agreement. If the
Agreement contains a provision that is inconsistent with the Franchise Act, the
provisions of the Agreement shall be superseded by the Act's requirements and
shall have no force or effect.
c.
If the Franchisee is required in the Agreement to execute a release of claims or to
acknowledge facts that would negate or remove from judicial review any
statement, misrepresentation or action that would violate the Franchise Act, such
release shall exclude claims arising under the Franchise Act, and such
acknowledgments shall be void with respect to claims under the Franchise Act.
d.
If the Agreement requires that it be govemed by the law of a State other than the
State of Minnesota or arbitration or mediation, those provisions shall not in any
way abrogate or reduce any rights of the Franchisee as provided for in the
Franchise Act, including the right to submit matters to the jurisdiction of the
courts of Minnesota.
2.
Minn. Stat. §80C21 and Minn. Rule 2860.4400J prohibit us from requiring litigation to
be conducted outside Minnesota. In addition, nothing in the disclosure document or agreement can
abrogate or reduce any of your rights as provided for in Minnesota Statutes, Chapter 80C, including your
rights to any procedure, fomm, or remedies provided for in that law.
DAL01:1I9537LI
079684.0103
3.
The Agreement/and or disclosure document is hereby amended to delete all references to
Liquidated Damages (as defined) in violation of Minnesota law; provided, that no such deletion shali
excuse the franchisee from liability for actual or other damages and the formula for Liquidated Damages
in the Agreement/and or disclosure document shall be admissible as evidence of actual damages.
4.
To the extent required by Minnesota Law, the Agreement/and or disclosure document is
amended to delete all references to a waiver of jury trial.
5.
All sections of the Agreement'and or disclosure document referencing Franchisor's right
to obtain injunctive relief are hereby amended to refer to Franchisor's right to seek to obtain.
6.
Each provision of this Agreement shall be effective only to the extent that the
jurisdictional requirements ofthe Minnesota law applicable to the provision are met independent of this
Amendment. This Amendment shall have no force or effect if such jurisdictional requirements are not
met.
fN WITNESS WHEREOF, the Franchisee on behalf of itself and its owners acknowledges that it
has read and understands the contents of this Amendment, that it has had the opportunity to obtain the
advice of counsel, and that it intends to comply with this Amendment and be bound thereby. The parties
have duly executed and delivered this Amendment on
, 20 .
FRANCHISOR:
CiCi Enterprises, LP,
a Delaware limited partnership
By: CiCi GP, LLC, its General Partner
By:.
Name:
Title: "
FRANCHISEE:
By:.
Name:
Title:
DAL011195371.1
079684.0103
-2-
AMENDMENT TO CICI ENTERPRISES, LP
FRANCHISE AGREEMENT
F O R T H E S T A T E O F NEW Y O R K
The CiCi Enterprises, LP Development Agreement between
("Developer" or
"You") and CiCi Enterprises, LP (the "Company") dated
(the "Agreement") shall be
amended by the addition of the following language, which shall be considered an integral part of the
Agreement (the "Amendment"):
NEW YORK LAW MODIFICATIONS
1.
The New York Department of Law requires that certain provisions contained in franchise
documents be amended to be consistent with New York law, including the General Business Law, Article 33,
Sections 680 through 695 (1989). To the extent that the Agreement contains provisions that are inconsistent
with the following, such provisions are hereby amended:
a.
If the Franchisee is required in the Agreement to execute a release of claims or to
acknowledge facts that would negate or remove from judicial review any statement,
misrepresentation or action that would violate the General Business Law, regulation,
rule or order under the Law, such release shall exclude claims arising under the New
York General Business Law, Article 33, Section 680 through 695 and the regulations
promulgated thereunder, and such acknowledgments shall be void. It is the intent of
this provision that non-waiver provisions of Sections 687.4 and 687.5 ofthe General
Business Law be satisfied.
b.
If the Agreement requires that it be governed by the law of a state, other than the
State of New York, the choice of law provision shall not be considered to waive any
rights conferred upon the Franchisee under the New York General Business Law,
Article 33, Sections 680 through 695.
2.
Each provision of this Amendment shall be effecfive only to the extent that the jurisdictional
requirements of the New York General Business Law, with respect to each such provision, are met
independent of this Amendment. This Amendment shall have no force or effect if such jurisdictional
requirements are not met.
DAL01:1I95371.1
079684.0103
IN WITNESS WHEREOF, the Franchisee on behalf of itself and its owners acknowledges that it has
read and understands the contents of this Amendment, that it has had the opportunity to obtain the advice of
counsel, and that it intends to comply with this Amendment and be bound thereby. The parties have duly
executed and delivered this Amendment to the Agreement on
, 20 .
FRANCHISOR:
CiCi Enterprises, LP,
a Delaware limited partnership
By: CiCi GP, LLC, its General Partner
By:.
Name:
Title: '
FRANCHISEE:
By:.
Name:
Title:
DAL01:1I95371.1
079684.0103
-2-
EXHIBIT C-l
CICI'S TO GO ADDENDUM TO FRANCHISE AGREEMENT
DALO 1:44560S4x91194789.3
079684.0103
C I C r S TO GO ADDENDUM
TO FRANCHISE AGREEMENT
This CiCi's To Go Addendum ("Addendum") to Franchise Agreement ("Agreement") is made
and entered into concurrently with the execution of the Franchise Agreement ("Agreement") by and
between CiCi Enterprises,
LP, a Delaware limited partnership ("Franchisor") and
("Franchisee").
RECITALS
The Agreement contemplates the establishment and operation of restaurants featuring an "All
You'd Like To Eat" buffet and offering dine-in and cany-out pizza and other Italian foods and related
items operating under the trademark and the trade name, "CiCi's".
Franchisor has also developed and offers franchises for CiCi's brand units designed for pizza
pick-up and catering, with limited dine-in or delivery capacity, which operate under the trade name and
service mark, "CiCi's To Go".
This Addendum amends the Agreement to establish the terms and conditions applicable to the
operation of a CiCi's To Go unit.
NOW THEREFORE, the parties, in consideration of the mutual agreements set forth herein, the
receipt and sufficiency of which are hereby acknowledged, agree as follows:
1.
following:
Recitals. The first and third recitals of the Agreement are deleted and are replaced by the
"Franchisor, as the result of the expenditure of time, skill, effort and
money, has developed and owns a distinctive system (hereinafter
"System") relating to the establishment and operation of units offering
carry-out pizza and other Italian foods and related items. . ..
Franchisor identifies the System by means of certain trade names, service
marks, trademarks, logos, emblems and indicia of origin, including, but
not limited to, the marks "CiCi's" and "CiCi's To Go" and such other
trade names, service marks, trademarks, logos, emblems and indicia of
origin as are now designated, and may hereafter be designated by
Franchisor in wrifing, for use in connection with the System (hereinafter
refened to as "Marks")."
2.
Definitions and Conventions. All references in the Franchise Agreement (including the
attachments and exhibits thereto) to "CiCi's Pizza restaurant" or "CiCi's Pizza restaurants" are hereby
changed to "CiCi's To Go Unit" or "CiCi's To Go Units", respectively, and all references to "Restaurant"
or "Restaurants" are hereby changed to "Unit" or "Units", respectively. All references to CiCi's To Go
Unit are hereby changed to CiCi's Pizza Restaurant.
3.
Inifial Training. Anything in the Franchise Agreement, including Section VI.C, D., and
E., to the contrary notwithstanding, if Franchisee has already completed the initial training program for
CiCi's Pizza Restaurants or CiCi's To Go Units, no additional initial training is required. Otherwise
Franchisee must complete the initial training program in accordance with the Franchise Agreement.
DAL01:1I95372.1
079684.0103
4.
Operational Requirements.
(a)
Secfion VII.E.(l) is hereby deleted in its entirety and is replaced
by the following:
"To sell or offer for sale all menu items, products and services
required by Franchisor (including, without limitation, beer and/or wine if
permitted by applicable law and required by Franchisor) utilizing the method,
manner and style of distribution prescribed by Franchisor. Distribution methods
currently include carry-out and catering, but no dine-in or delivery. Any change
in distribution methods must be expressly authorized by Franchisor in writing, in
the Manuals or otherwise. Franchisee agrees to comply with the terms of any
such distribution program and, in connection therewith, to execute such
documents or instruments that Franchisor may deem necessary."
(b)
Section V1I.E(8) is hereby deleted in its entirety and is replaced
by the following:
"(8) To open and maintain the Unit in operation at all times specified
by Franchisor in the Manual or otherwise in writing."
5.
Advertising Fund. Anything in Section VIII.C. to the contrary notwithstanding.
Franchisee shall contribute each Accounting Period (as defined in the Franchise Agreement) to the Fund
the greater of (a) One Thousand Dollars ($1,000) or (b) three percent (3%) ofthe Unit's Gross Sales at the
fime and in the manner set forth in Section VIII.C. During the fourth (4"') quarter of each calendar year
during the term hereof. Franchisor will notify Franchisee of any increase in the flat dollar amount
component of the Advertising Fund contribution (that is, the $1,000). The increase (if any) will be based
on the percentage change in the Standard Quotations and Data (SQAD) resource for most recently ended
twelve (12)-month period from October 1 through September 30 and will be effective as of January ofthe
following calendar year. Franchisor may, in its sole discretion, substitute another comparable national,
regional or market media index for the SQAD index if Franchisor determines it to be appropriate. If
Franchisor does so. Franchisor will also notify Franchisee of any change in the media index during the
fourth (4") quarter of the calendar year to take effect the following calendar year. Moreover, during the
term ofthe Agreement, Franchisor may, in its sole discretion, require Franchisee to allocate or reallocate
all or any portion of Franchisee's required contribufions hereunder to expenditures for Local Advertising
described in Section VIII.B.(2) or to a Cooperative as described in Section VIII.D.
6Coke Assignment and Authorization. Attachment F and Section Vlll.J., "Assignment and
Authorization", are hereby deleted in their entirety.
7.
Marks. Section IX.C.(l) is hereby deleted in its entirety and is replaced by the following:
"(1) Unless otherwise authorized or required by Franchisor,
Franchisee shall operate and advertise the Unit only under the name
"CiCi's To Go" without prefix or suffix. Franchisee shall not use the
Marks as part of its corporate or other legal name."
8.
Site Selection. Anything in the Franchise Agreement to the contrary notwithstanding.
Schedule 1 to the Site Selection Addendum, which forms Attachment B to the Franchise Agreement, is
DAL01;1195372.1
079684.0103
hereby replaced by Exhibit A to this Addendum, and any lease submirted pursuant to the Site Selection
Addendum shall be modified by Exhibit A to this Addendum.
9.
Confidentialitv Agreement and Ancillary Covenants Not to Compete. The parties agree
that Attachment D to the Franchise Agreement shall be modified prior to execution as approved by
Franchisor solely for the purpose of changing all references to CiCi's Pizza Restaurants to CiCi's To Go
Units.
10.
Construction. Capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in the Agreement. In the event of any confiict between the terms of this
Addendum and the terms of the Agreement, the terms of this Addendum shall control. Except as
expressly modified by this Addendum, the terms of the Agreement shall continue in full force and effect.
IN WITNESS WHEREOF, each of the parties hereto have caused this Addendum to be executed
by its duly authorized representative as of the date first above written.
FRANCHISOR:
CiCi Enterprises, LP,
a Delaware limited partnership
By: CiCi GP, LLC, its General Partner
By:.
Name:
TitIe:J
Date:
FRANCHISEE:
By:
Name:
Titie: _
Date:
DAL01:1I95372.1
079684.0103
EXHIBIT A
CICI'S TO GO UNIT LEASE ADDENDUM
This Addendum is attached to and made a part of the Lease Agreement (the "Lease") dated
20
(the "Lease Execution Date") between
("Landlord") and
("Tenant") for space (the "Premises") described in the
Lease which is a part of the
Shopping Center (the "Shopping Center") in
.
>
• All capitalized terms shall have the same meanings as in the Lease
unless defined otherwise in this Addendum. If any of the terms of this Addendum conflict with any ofthe
terms ofthe Lease, the provisions of this Addendum shall prevail.
Requirements of Franchisor.
(a)
Landlord acknowledges that Tenant is a franchisee of Franchisor (as defined
below), and that the CiCi's Pizza To Go restaurant, located at the Premises ("Restaurant") is operated
under the CiCi's Pizza franchise system, pursuant to a franchise agreement ("Franchise Agreement")
between Tenant and Franchisor. Landlord consents to Tenant's use at the Premises of such marks and
signs, decor items, trade dress, color schemes, fonts, logos and related components of the CiCi's Pizza
system and interior finish out, furniture, fixtures and equipment, as Franchisor may prescribe for the
Restaurant. During the term of the Franchise Agreement, the Premises may be used only to operate the
Restaurant. The term "Franchisor" refers to CiCi Enterprises, L.P., or any of its related entities, affiliates,
subsidiaries, parents, surviving entities from any merger or acquisition, successors or assigns.
Landlord and Tenant agree that to the extent permitted under applicable law, Franchisor
is a third party beneficiary of all of the rights and privileges set forth in this Addendum, and it is intended
by Landlord and Tenant that Franchisor will be entitled to enforce this Addendum. Landlord and Tenant
further agree that Franchisor is not liable for and does not assume any duties, obligations or liabilities
under this Addendum or the Lease unless agreed to in writing by Franchisor
(b)
Landlord agrees to fumish to Franchisor copies of all lerters and notices sent to
Tenant pertaining to the Lease and the Premises at the same time that such letters and notices are sent to
Tenant. Without limiting the foregoing, i f Tenant defaults under the Lease, Landlord shall notify
Franchisor in writing of the default. If Tenant has failed to cure such default within the applicable cure
period, Landlord shall give Franchisor further written notice of such failure ("Franchisor Notice"). After
Franchisor receives the Franchisor Notice, Franchisor shall have the right (but not the obligation) to cure
Tenant's default within fifteen (15) days after Franchisor receives the Franchisor Notice. During such
fifteen (15) day period. Landlord agrees not to exercise any of Landlord's remedies arising from Tenant's
default, and such cure by Franchisor shall be accepted by Landlord. Except as set forth below, such cure
by Franchisor shall not be deemed to be an election to assume the Lease.
(c)
If Franchisor cures Tenant's default, or if Franchisor notifies Landlord that the
Franchise Agreement has been terminated (which termination shall constitute a non-curable default under
the Lease when Landlord receives Franchisor's notice of the default), Landlord agrees, upon Franchisor's
written request, to assign to Franchisor all rights that Landlord may have under the Lease to remove and
evict Tenant from the Premises and shall cooperate with Franchisor to pursue such action to a conclusion.
(d)
If Franchisor cures Tenant's defauh or notifies Landlord ofthe termination ofthe
Franchise Agreement, Franchisor shall have the right and opfion, upon written notice to Landlord, to do
the following:
DAL01:U95372.1
079684.0103
A- 1
1.
Perform the terms of the Lease on behalf of the Tenant (notwithstanding
any removal or eviction of Tenant) for a period not to exceed six (6) months from the first (1st) date of
any cure by Franchisor for which Franchisor shall remain liable, without assuming the Lease; or
2.
At any time within or at the conclusion of such six (6) month period,
assume the Lease for the remainder of the cunent term, together with the right to exercise any applicable
renewal options. In such event, Landlord and Franchisor shall enter into a commercially reasonable
agreement to document such assumption. Franchisor is not a party to the Lease and shall have no liability
under the Lease unless the Lease is assigned to, and assumed by. Franchisor as herein provided.
(e)
If, during the six (6) month period set forth in Section (1) (e)l above or at any
time after the assignment to and assumption of the Lease, by Franchisor contemplated in Section (l)(e)2.
Franchisor shall notify Landlord that the franchise for the Restaurant is being granted to another CiCi's
Pizza franchisee. Landlord shall permit the assignment of the Lease to the franchisee, without any further
consent of Landlord being required as a condition thereto and without the payment of any fee or other
cost requirement. Thereafter, Franchisor shall be released from all further liabilities under the Lease. The
parties agree to execute any commercially reasonable documents in furtherance of this section.
(f)
Before the Franchise Agreement is terminated. Tenant will not assign the Lease,
sublease all or any portion of the Premises, or renew or extend the term thereof without the prior written
consent of Franchisor, nor shall Landlord and Tenant amend or otherwise modify the Lease in any
manner that could materially affect any of the terms, covenants and obligations of the Lease without the
prior written consent of Franchisor.
(g)
Following any default under the Lease or the Franchise Agreement or the
expiration or termination of the Lease or the Franchise Agreement, Franchisor, its employees, contractors
and agents shall have the right to enter the Premises to make any modification or alteration necessary to
protect the CiCi's Pizza system signs, marks and intellectual property rights or to cure any default under
the Franchise Agreement or under the Lease, without being guilty of trespass or any other crime or tort.
This right shall include the right to remove exterior signs and awnings from the Premises and any
Shopping Center pylon or monument sign provided Franchisor shall patch the fascia at its sole expense.
Franchisor's rights shall also include the right to de-identify the Premises as a Restaurant, which may
include removing interior signs, decor items and materials displaying any marks, designs or logos owned
by Franchisor and removing all other items identifying the Premises as a CiCi's Restaurant and to make
such other modifications (such as repainting) as are reasonably necessary to protect the CiCi's Pizza
system signs marks and intellectual property rights. Landlord will cooperate with and assist Franchisor in
gaining access to the Premises. If applicable law prohibits Landlord from allowing Franchisor to remove
Tenant's exterior and pylon signage. Landlord agrees upon written request from Franchisor to remove the
exterior and pylon signage and store them inside of the Premises. Similarly if Tenant's lender claims a
security interest in Tenant's signs, fumiture, fixtures or equipment Landlord shall nevertheless allow
Franchisor to remove Tenant's exterior and pylon signage and sequester the signs, service items,
fumiture, fixtures or equipment within the Premises outside the view of the general public for Tenant's
lender. Landlord shall not be responsible for any expenses or damages arising from any such action by
Franchisor. Tenant hereby releases, acquits and discharges Franchisor and Landlord, their respective
subsidiaries, affiliates, successors and assigns and the officers, directors, shareholders, partners,
employees, agents and representatives of each of them, from all claims, demands, accounts, actions and
causes of acfion, known or unknown, vested or contingent, which any of them may have, ever had, now
has, or may hereafter have by reason ofany event, transacfion or circumstance arising out of or relating to
the exercise of Franchisor's rights pursuant to the Addendum.
DALOLl 195372.1
079684.0103
A-2
(h)
Ali notices sent pursuant to this Addendum shall be sent in the manner set forth
in the Lease, and delivery of such notices shall be effective as of the times provided for in the Lease. For
notices under the Lease, Franchisor's mailing address shall be 1080 W. Bethel Road, Coppell, Texas
75019; Attn: Real Estate Department, which address may be changed by written notice to Landlord in the
manner provided in the Lease.
Landlord warrants, represents and covenants to Tenant that presently, and during the term of the Lease:
(i)
No part of the Shopping Center shall be leased, sold or used for a bar, pool hall,
dance hall, theaters, bingo parlor or other place of gambling (whether legal or illegal) or a sexually
oriented business including, but not limited to, "romance boutiques", any so-called head shop, or adult
video store (excluding incidental videos sold or rented in a video store as a part of a general, family
oriented video store ).
(i)
An adjacent space to the Premises shall not be leased, sold or used for a
veterinary clinic, boarding/lodging of animals, pet shop, hair salon or nail parlor.
(k)
There are no restrictions, covenants or agreements or zoning regulations
(including pre-existing tenant exclusives and use restrictions) that would prevent the Tenant from selling
pizza, (or any other food item or beverage), operating a buffet style restaurant, operating video games or
using vending machines within the Premises.
If Landlord breaches any of the foregoing representations, warranties or covenants or any such
representations or warranties prove to be untme, then, in addition to any other remedy, Landlord agrees to
indemnify, save and hold Tenant harmless from any loss, cost, expense or damage (including reasonable
attomey's fees and court costs) that Tenant may incur through such breach by Landlord.
(I)
Landlord, on behalf of itself and its successors and assigns, agrees that regardless
ofany designated Shopping Center business hours. Tenant shall have the right to operate the Restaurant
on such days and during such hours as are designated by Franchisor regardless of the typical hours ofthe
Shopping Center.
(m)
Relocation Clause. The Lease shall not contain any provision that would allow
the Landlord to relocate the Premises or the Tenant.
(n)
Radius Restricfion: The Lease shall not contain a radius restriction.
(o)
Continuous Operafions. The Lease shall not contain any provision that would
require Tenant to continuously operate.
DAL01:1195372.1
079684.0103
A-3
EXHIBIT C-2
INCENTIVE PROGRAM AMENDMENTS TO FRANCHISE AGREEMENT
DALO l:H56e54J>li242m
079684.0103
INCENTIVE PROGRAM
AMENDMENT TO FRANCHISE AGREEMENT
This Incentive Program Amendment to Franchise Agreement ("Amendmenf) is made and
entered into this
day of
, 201120 (the "Effective Date") by and between CiCi Enterprises,
LP ("Franchisor") and
("Franchisee"). This Amendment forms an integral part of the
Franchise Agreement (hereinafter defined), being appended thereto and fully incorporated therein.
RECITALS:
Franchisor and Franchisee or its parent company (as Developer) are parties to a certain
Development Agreement dated
, for the development of 1-2 CiCi's Pizza Restaurants, as
amended by an Incentive Program Amendment (the "Development Agreement Amendmenf) to such
Development Agreement of even date therewith (together, the "Development Agreemenf);
Pursuant to the Development Agreement, Franchisor and Franchisee are entering into a Franchise
Agreement of even date herewith (the "Franchise Agreemenf) for CiCi's Pizza Restaurant it
(the^^JlRestauranf);
The Restaurant is a Qualifying Restaurant under Franchisor's Incentive Program (as defined in
the Development Agreement Amendment);
This Amendment to Franchise Agreement is entered into pursuant to the terms of the
Development Agreement Amendment to provide for a discounted initial franchise fee and a reduction in
the weekly royalty fee payable under Section IV.B. of the Franchise Agreement.
AGREEMENT
NOW, THEREFORE, the parties, in consideration of the mutual undertakings and commitments
set forth herein, the receipt and sufficiency of which are acknowledged, agree as follows:
1.
Representations of Franchisee. Franchisee (and, if applicable, its parent company), as
Developer, represents that as of the Effective Date of this Amendment, Developer remains a "Qualified
Developer" as such term is defined in the Development Agreement Amendment.
2.
Discounted Initial Franchise Fee and Royalty Fee Reduction. Anything in the Franchise
Agreement to the contrary notwithstanding (including Sections IV.A. and B.),
A.
The initial franchise fee payable by Franchisee to Franchisor shall be
$
($20,000 less the allocable amount paid in respect of the Restaurant as part of the
development feel. I f the Restaurant is opened for business to the public before December 30. 2012.
Franchisor will refund to Franchisee SIO.OOO of the initial franchise fee naid bv Franchisee.
B.
Provided Franchisee opens the Restaurant before September 1.201^2013 (if this
Amendment is for the first Restaurant to be opened under the Development Agreement) or
September June I , 304^2014 (if this Amendment is for the second Restaurant to be opened under the
Development Agreement) Franchisee shall pay a weekly royalty fee in the amount of 2% of Net Sales, as
set forth in Section IV.B, for a one year period, beginning on the Opening Date until the first year
anniversary of the Opening Date. Following the one year period described above, weekly royalty fees
shall be calculated at the standard rates set forth in Section IV. B. of the Franchise Agreement, without
regard to this Amendment.
DALO 1 1169219.11195373.1
3.
Constmction: Facsimile Signatures. Except as expressly set forth in this Amendment, all
terms and conditions of the Franchise Agreement shall remain in full force and effect. Initially
capitalized terms used but not defined in this Amendment shall have the meanings assigned to them in
the Franchise Agreement. This Amendment may be executed in several counterparts, each of which shall
serve as an original for all purposes, but all of which shall constitute but one and the same Amendment.
Facsimile signatures shall be considered effective for execution purposes. Each party providing
facsimile signatures shall forward to Franchisor an originally executed signature page within five (5)
business days following Franchisor's receipt of the facsimile signature.
FRANCHISOR:
CiCi Enterprises, LP,
a Delaware limited partnership
By: CiCi GP, LLC, its General Partner
By: J. Forbes Anderson, Monogcr
Nam£i
Date:
FRANCHISEE:
By:.
Name:.
Title:
Date:
DALO 11169249.!n95373.1
079684.0103
INCENTIVE PROGRAM
AMENDMENT TO FRANCHISE AGREEMENT
This Incentive Program Amendment to Franchise Agreement ("Amendment") is made and
entered into this
day of
, 201420 (the "Effective Date") by and between CiCi Enterprises,
LP ("Franchisor") and
("Franchisee"). This Amendment forms an integral part of the
Franchise Agreement (hereinafter defined), being appended thereto and fully incorporated therein.
RECITALS:
Franchisor and Franchisee or its parent company (as Developer) are parties to a certain
Development Agreement dated
, for the development of three (3) to five (5) CiCi's Pizza
Restaurants, as amended by an Incentive Program Amendment (the "Development Agreement
Amendmenf) to such Development Agreement of even date therewith (together, the "Development
Agreement");
Pursuant to the Development Agreement, Franchisor and Franchisee are entering into a Franchise
Agreement of even date herewith (the "Franchise Agreement") for CiCi's Pizza Restaurant #
(the-.
Restaurant");
The Restaurant is a Qualifying Restaurant under Franchisor's Incentive Program (as defined in
the Development Agreement Amendment);
This Amendment to Franchise Agreement is entered into pursuant to the terms of the
Development Agreement Amendment to provide for a discounted initial franchise fee and a reduction in
the weekly royalty fee payable under Section IV.B. of the Franchise Agreement.
AGREEMENT
NOW, THEREFORE, the parties, in consideration of the mutual undertakings and commitments
set forth herein, the receipt and sufficiency of which are acknowledged, agree as follows:
1.
Representations of Franchisee. Franchisee (and, if applicable, its parent company), as
Developer, represents that as of the Effective Date of this Amendment, Developer remains a "Qualified
Developer" as such term is defined in the Development Agreement Amendment.
2.
Discounted Initial Franchise Fee and Royalty Fee Reduction. Anything in the Franchise
Agreement to the contrary notwithstanding (including Sections IV.A. and B.),
A.
The initial franchise fee payable by Franchisee to Franchisor shall be
$
($15,000 less the allocable amount paid in respect of the Restaurant as part of the
development feeV I f the Restaurant is opened for business to the public before December 30. 2012.
Franchisor will refund to Franchise SIO.OOO of the initial franchise fee paid bv Franchisee.
B.
Provided Franchisee opens the Restaurant before September 1, 2O412013 (if this
Amendment is for the first or second Restaurant to be opened under the Development Agreement) or
September 1, 20l^2SLiA (if this Amendment is for the third, fourth or fifth Restaurant to be opened under
the Development Agreement) Franchisee shall pay a weekly royalty fee in the amount of 2% of Net
Sales, as set forth in Section IV.B, for a one year period, beginning on the Opening Date until the first
year armiversary of the Opening Date. Following the one year period described above, weekly royalty
fees shall be calculated at the standard rates set forth in Section IV. B. of the Franchise Agreement,
without regard to this Amendment.
DALO 1 1169176.21195374.1
3.
Constmction: Facsimile Signatures. Except as expressly set forth in this Amendment, all
terms and conditions of the Franchise Agreement shall remain in full force and effect. Initially
capitalized terms used but not defined in this Amendment shall have the meanings assigned to them in
the Franchise Agreement. This Amendment may be executed in several counterparts, each of which shall
serve as an original for all purposes, but all of which shall constitute but one and the same Amendment.
Facsimile signatures shall be considered effective for execution purposes. Each party providing
facsimile signatures shall forward to Franchisor an originally executed signature page within five (5)
business days following Franchisor's receipt of the facsimile signature.
FRANCHISOR:
CiCi Enterprises, LP,
a Delaware limited partnership
By: CiCi GP, LLC, its General Parttier
By:
J—For4>es Anderson, Manager
Name:
me:
Date:
FRANCHISEE:
By:.
Name:.
Title:
Date:
DALO 1 1169176.31195374.1
INCENTIVE PROGRAM - EXISTING DEVELOPERS
AMENDMENT TO FRANCHISE AGREEMENT
This Incentive Program Amendment to Franchise Agreement ("Amendment") is made and
entered into this
day of
, 20 (the "Effective Date") by and between CiCi Enterprises, LP
("Franchisor") and
("Franchisee"). This Amendment forms an integral part of the
Franchise Agreement (hereinafter defined), being appended thereto and fully incorporated therein.
RECITALS:
Under the terms of a Development Agreement dated
and Franchisee (as Developer^. Franchisee was scheduled to open
rthe "Required Number of 2012 Restaurants"^ in 2012.
between Franchisor
CiCi's
Franchisee has qualified for a temporor)^ royalty reduction under Franchisor's incentive
program for existing Developers, by opening CiCi's Pizzo Rcstouront it ot least 90 days aheod of
schedule during the time period of June 1, 2011 through June 1, 2012. The opening pf CiC^i's Pizza
Rgfitawrant/^
in 2012 will exceed the Required Number of 2012 Restaurants and, upon such
bv Franchisee and a temporary rovaltv reduction ^thc "Inccntives"L
Franchisor and Franchisee wish to amend the Franchise Agreement to reflect the temporary
AGREEMENT
NOW, THEREFORE, the parties, in consideration of the mutual undertakings and commitments
set forth herein, the receipt and sufficiency of which are acknowledged, agree as follows:
1.
Royalty Fee Red^efienlncentives. Anything in the Franchise Agreement to the
contrary notwithstanding (including Sections IV.B.), i f Franchisee actually opens the Restaurant for
in 2012.
A»
Franchisor wii
franchise fct
•anchisce;
in.ooo of
B.
Franchisee shall pay a weekly royalty fee in the amount of 2%
of Net Sales, as set forth in Section IV.B=. of the Franchise Agreement.
for a six (6) month period^ beginning on the Opening Date until the si*(6) monthfiiat anniversary of the Opening Date. Following the si*one
(61) fflonthvear period described above, weekly royalty fees shall be
calculated at the standard rates set forth in Section IV.B. of the Franchise
Agreement, without regard to this Amendment.
Constmction: Facsimile Signatures. Except as expressly set forth in this Amendment, all
terms and conditions of the Franchise Agreement shall remain in full force and effect. Initially
capitalized terms used but not defined in this Amendment shall have the meanings assigned to them in
the Franchise Agreement. This Amendment may be executed in several counterparts, each of which shall
serve as an original for all purposes, but all of which shall constitute but one and the same Amendment.
Facsimile signatures shall be considered effective for execution purposes. Each party providing
facsimile signatures shall forward to Franchisor an originally executed signature page within five (5)
business days following Franchisor's receipt of the facsimile signature.
DALO 1:11692Sn.31195375 1
[SIGNATURES ON FOLLOWl
FRANCHISOR:
CiCi Enterprises, LP,
a Delaware limited partnership
By: CiCi GP, LLC, its General Partner
By:
J. Forbes Anderson^ Manager
Name:
Title:
Date:
FRANCHISEE:
By:.
Name:
Title:
Date:
-2D ALO1 116935fl.211953751
EXHIBIT C-3
nsTVESTMENT PROGRAM AMENDMENT TO FRANCHISE AGREEMENT
DALO 1:11S6Q.54.9I194789.3
079684.0103
INVESTMENT PROGRAM
AMENDMENT TO FRANCHISE AGREEMENT
This Investment Program Amendment to Franchise Agreement ("Amendmenf) is made and
entered into this
day of
, 201420
(the "Effective Date") by and between CiCi Enterprises,
LP ("Franchisor") and
("Franchisee"). This Amendment forms an integral part of the
Franchise Agreement (hereinafter defined), being appended thereto and fully incorporated therein.
RECITALS:
Franchisee has qualified for the Franchisor's investment program as described in its Franchise
Disclosure Document dated March 25. 201L as amended June 10. 201126. 2012 ("Investment
Program").
Under the Investment Program Franchisor has a non-voting ownership interest in Franchisee
which entitles Franchisor to the preferential retum of its investment on the occunence of a liquidation
event ("Class B Interesf). All other interest holders in Franchisee hold Class A ownership interests
("Class A Interests").
Franchisor and Franchisee wish to amend certain provisions of the Franchise Agreement to
reflect certain terms of the Investment Program.
AGREEMENT
NOW, THEREFORE, the parties, in consideration of the mutual undertakings and commitments
set forth herein, the receipt and sufficiency of which are acknowledged, agree as follows:
1.
Transfer of Interest Section XIV. of the Franchise Agreement is hereby amended by the
addition of the following condition under XIV.B.(1)(1):
"(1)
No Class A Interests may be sold, assigned or otherwise transfened
unless the Class B Interest is sold, assigned or otherwise transfened
contemporaneously."
2.
Post-Termination. Section XVIII of the Franchise Agreement is hereby amended
by the addition of the following Section XVIII.(O):
"(O)
Following the expiration (without renewal) or termination of the
Franchise Agreement, Franchisee shall be dissolved within a reasonable
period of time, not to exceed thirty (30) days unless otherwise agreed by
Franchisor."
DALOl :4469m^ll2522fiJL
3.
Construction: Facsimile Signatures. Except as expressly set forth in this Amendment, all
terms and conditions of the Franchise Agreement shall remain in full force and effect. Initially
capitalized terms used but not defined in this Amendment shall have the meanings assigned to them in
the Franchise Agreement. This Amendment may be executed in several counterparts, each of which shall
serve as an original for all purposes, but all of which shall consfitute but one and the same Amendment.
Facsimile signatures shall be considered effective for execution purposes. Each party providing
facsimile signatures shall forward to Franchisor an originally executed signature page within five (5)
business days following Franchisor's receipt of the facsimile signature.
FRANCHISOR:
CiCi Enterprises, LP,
a Delaware limited partnership
By: CiCi GP, LLC, its General Partner
By: J. Forbes Anderson, Manager
Date:
FRANCHISEE:
By:.
Name:
Title:
Date:
-2DALO1:4469493^119.5376.1
EXHIBIT D
LIST OF FRANCHISED CICI'S PIZZA RESTAURANTS
DALO 1:1156054.911947893
079684.0103
EXHIBIT D
LIST OF FRANCHISEES AND THEIR RESTAURANTS
As of December 26=-3QItl25. 2011
i|*Franchise Agreements signed but restaurant not open-as-of-Deccmber 26, 2010.^
Gitk^^'-;
^toj
•i
'
State
I
S
1
Phone
Hii
i^L'ABAMA
144
1550 Opelika Road,
Aubum
Suite #30
03
428 Palisades Blvd, Ste Birmingham
428
.451-;: -_^3t7.7J^'t Street, N.E.-A
;03
„
. *
AL
36830
334-821-2600
AL
35209
205-870-0005
W0\
~
-
Rogers, Kent
-
t
Karlace Enterprises,
Inc.
Ballew Pizza, LLC
'^ !
AL
35242
Cullman
Decatur
AL
AL
35055 256-736-2662
35603 256-301-5524
Dothan
AL
36303
334-673-3500
Florence
AL
35630
256-765-2424
Foley
Guntersvilie
AL
AL
36535
35976
Hess, Kenneth
Tomlinson, David
4925 University Drive,
Ste 162
10004 Memorial Pkwy
Huntsville
AL
35816
251-970-3242
256-fm486S0753222
256-864-2224
Huntsville
AL
35803
256-885-1595
Tomlinson, David
6750 Airport Blvd, Ste
1
981 Ann Street
Mobile
AL
36608
251-341-0880
Montgomery
AL
36107
334-386-3086
929 McFarland Blvd
East
657 Snow St
2782 Legends Pkwy
Northport
AL
35476
205-333-3920
Oxford
Prattville
AL
AL
36203
36066
256-835-3595
334-387-4640
1250 Old Monilton
Hwy
637 E. Joyce Blvd, Ste
101
8323 Rogers Avenue
3321 Central Avenue
120 John Harden Dr,
Ste 1
2116 S. Caraway
2815 Lakewood Village
Dr
3063 E Main Street, Ste
C
Conway
AR
v.=
72032
501-764-0600
Fayetteville
AR
72703 479-582-9292
Risor, Randy
TJR Foods, Inc.
Fort Smith
Hot Springs
Jacksonville
AR
AR
AR
72903 479-484-0909
71913 501-321-2400
72076 501-241-2224
Bass, Mike
Goff, Mark
Banner, Mike
B & B Bass 11, Inc.
Spa City Pizza, Inc.
Vision Resources, Inc.
Jonesboro
N. Little Rock
AR
AR
72401
72116
870-932-8300
501-753-1182
Reid, Phillip
Banner, Mike
TBB Investments, Inc.
Vision Resources, Inc.
Russellville
AR
72802
479-880-2424
Goff, Mark
BFE Pizza, LLC
90
1011 S. Gilbert Rd
Mesa
AZ
85204
480-545-2866
05
2270 N. 75th Ave, Ste
Phoenix
AZ
85035
623-247-4992
t^esiewMcGuffm
, Re^Icjcrx
Leto, JoeBUl
;92
166
435
07
209
262
,29
706
105
398
734
I^H^^^SAS^;;:- > v.'-.A
284
93
52
139
629
74
152
98
DAIJl:119j;637.1
•i
!
feitlerBallew.
Anthoft¥Ro,J^,ei;t
'205.85^'2'12t.A, .Tomlinson, David K - .Tomlin soflTEfi terbfi
Birmingham
480
276
5287 Hwy 280 South,
Ste 209
1842 Patriot WaySW
303 Beltline Place
S.W., Bldg l/UnitB
3702 Ross Clark Circle,
Ste 7
157 Cox Creek Pkwy
South
3061 S. McKenzie St
11521 US HWY 431
Company Name
Contact-*. '
-T.' •
•''
205-980-0099
i J -
Ballew Pizza, LLC
BafierSaUSE^
AfltbonvRo^iert
Tomlinson, David
Kroeger, Michael
D.D. Pizza, L.L.C.
KRO-TOM
Enterprises, Inc.
Dothan GGMaram.
LLC
KRO-TOM
Enterprises, Inc.
Mulcox I , Inc.
Tomlinson Enterprises,
Inc.
Tomlinson Enterprises,
Inc.
Tomlinson Enterprises,
Inc.
Mulcox 2, Inc.
RuthsQtzRacke.
B«ft»M^rtV.
Kroeger, Michael
Tomlinson, David
I T M t i t l t d 11 1 I j ^ t ^ g ,
Jr., PaulKirk
Gonzalez,
Santiago
Tomlinson, David
-.
Tomlinson, David
Gonzalez,
Santiago
•'
Goff, Mark
.•
Hug & B, Inc.
Tomlinson Enterprises,
Inc.
D.D. Pizza, L.L.C.
Hug & B, Inc.
i
-
Dilhgas Pizza, LLC
i
Brass Maze Pizza
#690, LLC
Del Leto, Inc.
Zip
;Phone • '
P)ntact-
Company Name
101
, j y i . i : B . "1,11 u 1 1 1 M » ^ I \ I I , T 3 I C 'J
94
2912 W Ina Road.Ste
300
• f ~ t H J V l l l A . A <.'i-V
^ ./{•).
Tucson
AX
•I 1
AZ
85741
^'-"^
' , . *-*
520-408-3266 I^esieHrMcGiiffin
, RobJerrv
CA
91709
909-606-5173
CA
92236
760-3SS22S5489fiQQQ
t'lP" \ l t f»'wi:t
\fm'Wrl\
4f'
Brass Maze Pizza
#794, LLC
S®®0JpI^^lillf=
41
48
829
4200 Chino Hills Pkwy, Chino Hills
Ste 890
49291 Grapefmit Blvd, Coachella
ste 2
P?l IN. McKinley. fitif Corona
103 •
29910 Murrleta-llot
rSDrlnEs^oad.3.te.S
5801 University Ave,
San Diego
SteB
^ S i ip)^i^-]Do . - :
433
482
587
14000 E. Mississippi
Aurora
Ave, #7
18648 E. Hampden Ave Aurora
7414 S. University Blvd Centennial
813
3255 E Platte Ave
469
92879
10048 Grant St
5740 W. 88th Avenue
KiT, Inc.
Jenali Group, Inc.
Vatanl. David
Enterpr^.scff, Inp.
Carter. Melissa
^'^''''^^^-''''^
92115
619-287-2424
•
CO
•
80012
•^t. ;^
303-597-0080 Newhall, Quinn
CO
CO
80013
80122
303-617-3222
720-974-3062
Newhall, Quinn
Pizza PALS LP
Newhall, Quinn
Pizza PALS LP
:Newhftli; Quinnt#: ' P i T 7 i ' i ' P \ r S ' l ' P
719-473-6311
Newhall, Quinn
303-996-0919
Newhall, Quinn
1
y^0t
" •.SpFtjftgs:"^'^!'"^^
Colorado
CO
80909
Springs
Denver
CO
80227
Carter, Melissa
",-
CA
3100 South Sheridan,
UnitL
' 72S "'. . 2170,35th Avc^^^Onit B: ^.
667
434
.?5|-27ft-2424-
BtelflgfcWriphL
TimothyLourdes
Cox, George
CE Enterprise, LLC
Pizza PALS LP
It- " V . " ^ f l #
Pizza Pals of the
Springs, LP
Pizza PALS LP
t*9634;
i-PizziiiiPalsIofrGreele
Thornton
Westminster
CO
CO
80229
80031
303-635-6928
303-996-0853
Newhall, Quinn
Newhall, Quinn
Pizza PALS LP
Pizza PALS LP
Newark
DE
19711
302-368-2424
Vovra, Devin
KSD Group, LLC
i3Eii|;!^lRi:i;
821
1150 Capitol Trail,
Units 1 & 2
i. .
fifpiipx/- ^
1. y.'
f
••• ' '' f,.'
,
I - '
•" ^
'.yy
-, ...
^y'
287
73
419 Cortez Road West
1991 West Lumsden
Road
Bradenton
Brandon
FL
FL
34207
33511
941-752-1331
813-657-8400
509
49
12109 Cortez Blvd
1430 Del Prado Blvd
Brooksville
Cape Coral
FL
FL
34613
33990
352-596-9544
239-573-7225
iOl
257
5178 East Bay Drive
2440 state Road 580
Clearwater
Clearwater
FL
FL
33764
33761
727-538-2424
727-725-7200
Bertrand, Giorgio
BcrtrandAstjf^flft
US,
GiorgioSami^fi
Bertrand, Giorgio
SierpMason.
BillReppie
Bertrand, Giorgio
Woody, Dave
811
1850 Victor Posner
Blvd
3912 W Hillsboro Blvd
Davenport
FL
33837
863-424-3800
Bailey, Scott
CiCi's Pizza #201, Inc.
DA PIZZA BOYZ,
LLC
Tri-Bailey Group, LLC
Deerfield
Beach
/ ^
FL
33442
954-570-9900
Parks, Greg
GTF Pizza, LLC
Estero
FL
33928
239-498-5202
Blackmon, Paul
Pizza Pirates, LLC
Fort Myers
FL
33919
239-267-6543
GrosskreutzBlac
kmon, CarfEaidi,
Mvers. LLC
300
' 5^0. f
4957 W Atlantiu-Aw
!, •
741
95
20041 Tamiami Trail
South, Unit 18
9131 College Parkway,
ste. 8
CP287, Inc.
LQTSADQAVA
First Pie, LLC
DTS Enterprises, Inc.
^ 33445'. 561^95-66»L'4:
DALQl:t4S6QS?rH195637.I
079684.0103
- 2-
^3
280
mJOtr
417D Maiy Esther
Cutoff
-
City :" ••.
SUlL
Fort Walton
Beach
FL
\^ •
Contact'v
.vxxmwjy y.^.
32548
749
3024-3028 Jog Rd.
2885 West 68th St, Ste
1
410 W. 49th St, Unit
107
•.%y •
561-641-5888
. CJU TT UI \J9f • VJUI
305-822-0000
Adrian, Matt
Laya, Carlos
305-822-5151
Chiurillo, Toni
Greenacres
Hialeah
FL
FL
33467
33018
Hialeah
FL
33012
FL
322'25'" 904'-226-1000
FL
32218
904-757-4997
FL
32210
904-388-2464
- • * under interim onerfitin;; at're«ni«nt
>64
12777 Atlantic Blvd,
Jacksonville
Ste 31
900-10 Dunn Ave.
Jacksonville
333
Meisner, Gil
'- T^'*
fiO''• 1'
vtra—vyii—tn
VjUlllUaVlllC
••• 'i'yg^y:''r-i>-.'
238
419
850-243-4000
'v-
Coiupany^Nanu'
Pizzacake, LLC
J
ll
:Tartiici^':BLCL#f>^
Kevin Adrian, Inc.
Chente Enterprises,
Inc.
Chente Enterprises 11,
Inc.
;
372
4495 Roosevelt Blvd,
Ste 106
^JTOU V l U
180
291
585
797
Jacksonville
l>Hy-illCllUUiT3;.^
.-l^Li
• ' ' y.? ' •••' :•
4743 66th Sfreet North Kenneth City
1400 E Vine Street, Ste Kissimmee
F
5035 W. Irlo Bronson
Kissimmee
Memorial Hwy
7763 W. Irlo Bronson
Kissimmee
Memorial Hwy
' .'-"^ '
Elangovan,
Saravana
Elangovan,
Saravana
Elangovan,
Saravana
FL
FL
^'Z' 322^6
^.m^''.' . y % '
.
33709 727-548-8888 Bertrand, Giorgio
34744 407-870-7711 Crawford, Rick
FL
34746
407-390-9001
Bauer, David
FL
34746
407-390-6171
Bauer, David
}• !
-
A-3 Hospitahty, LLC
A-l Hospitality LLC
A-2 Hospitality LLC
SpizzaCo, Inc.
Gulfstream Restaurants
Inc.
Pizza Unlimited
Intemational, Inc.
Pizza Unlimited
Intemational Maingate,
Inc.
Pizza Unlimited
Intemational 192
Eastside, Inc.
fr&^-RestaurafttEntcrpfis€S-efJbak«lamlGENP. Inc.
TVT, Inc.
Time To Eat, Inc.
3815 W Vine St
Kissimmee
FL
34741
407-518-5067
Bauer, David
86
4271 S. Florida Avenue
Lakeland
FL
33813
863-644-4477
BeeknerSwinple.
Bebjlosefit
729
416
Lakeland
Longwood
FL
FL
33809
32750
863-815-2000
407-339-2424
Dallman, Vanessa
Wells, Craig
Margate
Melboume
FL
FL
33063
32935
954-979-7747
321-253-1299
Cappiello, Daryl
Word, Milton
815
4266 US N Hwy 98
1155 West State Road
434, Ste 101-103
5379 W. Atlantic Blvd
1270 N. Wickham
Road, Ste 46-47
9609 W. Flagler St
Miami
FL
33174
305-551-2424
Mendez, Andy
846
7572 SW 117th Ave
Miami
FL
33183
305-274-2424
Mendez, Andy
531
2650 Immokalee Rd,
Bldg 300, Unit 2
2427 SW 27th Ave
Naples
FL
34110
239-597-0306
Blackmon, Paul
Ocala
FL
34474
352-861-1800
Edwards, Gary
2448 S. Volusia
Avenue
410 Blanding Blvd., Ste
5
4538 South Semoran
Blvd, Ste 19
8586 Pahn Pkwy
Orange City
FL
32763
386-774-2424
Word, Milton
Piggi Pizza, LLC
Four WORD Motion
LLC
JHR Group Enterprises
Inc.
A & H Group
Enterprises, Inc.
Blueskies Everyday,
L.L.C.
Ocala Pizza Partners,
LLC
Ton of Pizza, LLC
Orange Park
FL
32073
904-272-3733
Gregory, Dean
Jax Pizza Partners, Inc.
Orlando
FL
32822
407-249-3939
Holden, Chad
Orlando
FL
32836
407-238-7711
Bauer, David
C. Holden Enterprises,
Inc.
Pizza Unlimited
Intemational LBV, Inc.
807
566
202
177
194
165
414
430
DALO 1:44S60S7rtXJ25fi22J.
079684.0103
- 3-
i S t o i ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ y S i \ ^'^.-^ ' C i t y . v ^ V * ; ' .;State;, Zip
my
7437.lntcrnatii>nal
Orlando
7137 Intornotionol
l>i4ve13605SR 535.
Suite 101
13605 SR 535, Suite
44>4S540 International
Orlando
Orlando
428
5070 Hwy 90
214
660 W. 23rd Su-eet
^ 3 ^ R i c h j r d Jackson
: ;80
'23.
'
FL
•Plioiie .
Contact
'r^^l^^^^^ 9822
fiaufir. Pavid
Companv; Name "
Bauer, David
FL
33S2132S19
407-2392^44505S5£
Bauer, David
Pizza Unlimited South
Intemational, fafeLLC
Pace
FL
32571
850-994-3993
Ward, Brandon
Panama City
Piinama.Citv
FL
32405
850-784-4420
S50-?49-3(f4Q
Meisner, Gil
Branco Enterprises of
Pace, Inc.
Knead the Do, L.L.C.
Shccliiui.,Tc-ffr>n
32504 850-476-6464
:-^iy£^'
33948 941-627-4443
Mulhem, Jr., Paul
217
32127
Cruz, Jose
3830-B South Nova
Road
40368-S. Federnl l l w \
Port Orange
13141 S. US Highway
301
3695 S. Orlando Ave
Riverview
FL
33578
Sanford
FL
y
32773 407-330-7676
^^••1il'*4T'
*OS1rtl7'Y'
nf*l-wnnrl~Rif1iTr.
i j ^ r,—iirtj
V TV \ 1 U v
tu gC
450
115 Jenkins St, Ste 101
Unlimited* InterjiatiDiiaUnc."
Pizza Unlimited
Intemational, Inc.
407-2262^98224450
7I45-C North 9th Ave
Pensacola
FL
: *-under mterim oncratinp nprccifient. . V".^^] - 46
1700 Tamiami Trail,
Port Charlotte
FL
Suite G-5
278
. Pizza
22821
207
766
.
FL
Porl-SaintIjucie '
'yy.,
' ;" -f-;
St. Augustine
149
176
Gross krcutzPla^
kmpn- GaflPaul*
GEd^bA-EnteFprisesCharlotte. L L C
C & H Pizza Company,
Inc.
••••
^4952 .•-7_7^A-1-17-45AS
. •!
rX/—*j^.r—*rJ\f^
Ft
FL
386-304-3400
. Ih,c.
Mulhem & Co., LLC
813-671-8265
Trout, Eric
Forschner, Matt
'W32086
904-429-7787
MOJH Enterprises,
LLC
MGF Restaurants, Inc.
^- f ~ ^ n r r i t n i l l " g • L f ! ~ ^ f * f t f f '
\ : ; U i l J l i i l i l 7 « \ j ^ r U t l .-i'*'^
i3 tl rtt 3 VI
tt-1—1
•^
• PaVtncrsf L l ! c |
The Cajun Connection
Pizza, LLC
Word, Milton
8253 Sunset Strip
Sunrise
FL
1214 Capital Cir. S. E.
Tallahassee
FL
1312lT:NT-4)ale7Mabry- '
T-HIRpa y.
-Hwyt'
, ^
'
!
497 i'6821 W . HiHsborotiglh-1
Tampii . - •
Ph
Ave
^ 3^
• ^'
3910 S. Dale Mabry
Tampa
FL
303
808
12883 Citms Park Dr.
Tampa
FL
339
5771 E. Fowler Ave
Temple
FL
Terrace
33322 954-578-7099
Orcinolo, Tony
A-E-O, Inc.
32301 850-216-2225
Dowling, Wendell Moore Pizza, Inc.
33618 813-968-2426'
Bertrfindr^iorgio
a (-I*f^l88, U - C
33611
33625
33617
813-832-3334
813-792-9600
813-914-7788
Elzayat, Edward
Woody, Dave
Bertrand, Giorgio
Felopatir, LLC
Woody Bros. LLC
SpizzaCo, Inc.
801
243 Colony Boulevard
The Villages
FL
32162
352-259-5508
Ryden, Gary
231
347 Cypress Gardens
Blvd
Winter Haven
FL
33880
863-291-0505
Bailey, Scott
Foxden Enterprises,
Inc.
Tri-Bailey Group, LLC
182
5864 Red Bug Lake Rd
Winter Springs
FL
32708
407-695-3555
Wells, Craig
2 C's, LLC
786
6834 US 301
Zephyrhills
FL
33542
33634
843-884-79m»
-'s^
'•• •
Athens
GA
381
3190 Atlanta Hwy, Stes
5/6
240 Cherokee Place
813-780-1014
Bertrand, Giorgio
^: i
.
30606 706-613-2424
Tumblin, Trippy
Cartersville
GA
30121
770-387-9797
Wiggins, Stuart
. 08
1931 Aubum Ave
Columbus
GA
31906
706-569-9096
GfweMotaleb.
rlwAn|Vln<ien
1660 Whittlesey Rd,
Ste 300
Columbus
GA
31904
706-317-3332
SIS i^Eoiasi^i^
128
24
y^^^
JnanMosen
DALO 1:11S6057.11I95637.I
079684.0103
- 4-
M
Alert imnd^-Giofgio >
••• 'f^j- • ,-
Zephyr Pie, LLC
\
.
"
J
- ,
*
,
Tumblin Company,
LLC
Baker/Wiggins Interest
- Cartersville, LLC
Evan Enterprises, LLC
Emilia Enterprises,
LLC
'
^^press
' .^•y
i'City, «,>Ys
\
' (
314
115
765
208
145
346
5 ~
v
States Zip
I- ^ «
'
Phone
/Contact
:
"
1503 Hwy 138 SE, B102&B-104
655 Atlanta Road, Ste
606/607
2920 Ronald Reagan
Blvd
1345 West Walnut Ave
Conyers
GA
30013
770-929-3350
Murphy, Dan
CiCi's #314, L.L.C.
Gumming
GA
30040
770-886-0055
Rowland, Ken
Gumming
GA
30041
770-886-7800
Edwards, Scott
Dalton
GA
30720
706-278-2424
McElroy, John
3912 N. Druid Hills
Road
723 Battlefield Pkwy
Decatur
GA
30033
404-329-1535
Murphy, Dan
Ft. Oglethorpe
GA
30742
706-858-7401
Potts, Steve
DOUGH BOYS
CUMMINGS, LLC
Proud Pizza Partners,
LLC
K&K Pizza Partners
Dalton, LLC
LH.H.N.
ENTERPRISES, INC.
Potts & Pans, Inc.
Gainesville
GA
30501
770-534-9400
Rowland, Ken
263
250 John W Morrow Jr
Pkwy
27-3,
N Exprc'^'^wdy'
Suite L14
'
319 230 General Screven
Way, Ste 100
204' ' Jlfifl Cnhh PItwv \ W
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63 4020 Washington Rd.,
Ste D/ E/ F
417
1876 Jonesboro Road
"6050 Pc-irhtrcV Plcivv"
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GA
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GA
McDonough
GA
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Cniit-Ii
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2519 Redmond Circle
Rome
GA
30165
706-235-8800
Wiggms, Stuart
137
10516 Alpharetta
Highway
7400 Abercom SL, Ste
801
1825 Rockbridge Rd
Roswell
GA
30076
770-645-1550
Kling, John
Savannah
GA
31406
912-691-2777
Hayman, Michael
Stone
Mountain
Suwanee
GA
30087
678-476-9399
Park, Lee
GA
30024
678-482-9117
Rowland, Ken
Valdosta
GA
31601
229-244-2464
Gardner, Steve
487
399
390
3255 LawrencevilleSuwanee Rd, Ste M
1717 Norman Drive
537
12186 Hwy 92, Ste 110
Woodstock
GA
30188
770-592-6885
Wiggins, Stuart
11
2315 Edgewood Road,
Suite 170
3411 S.E. 14th St
Cedar Rapids
lA
52404
319-396-6666
Des Moines
IA
50320
515-280-1640
HarmerBrown.
CfeadDoug
Paporello, Randi
4349 Merle Hay Road,
Ste 6
Des Moines
IA
50310
515-252-1616
Paporello, Randi
584
694
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ii.cj.-i*icei-inter-e-
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2014 W Wilson
Batavia
IL
60510
630-482-9160
Zak, Frank
700
1340 BurterfieldRd
IL
60515
630-424-1520
Zak, Frank
791
16131 S. Farrell Rd
Downers
Grove
Lockport
IL
60441
815-838-0202
Davies, Todd
803
8225 WGolf
Niles
IL
60714
847-965-3911
Rinaldi, Bob
DALO 1:1156057J]
079684.0103
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Baker/Wiggins
Interest
- Rome, LLC
Resource 360
Restaurants, LLC
P & M Holdings, Inc.
Stevens-Park
Enterprises #487, LLC
DOUGH BOYS
SUWANEE, LLC
Gardner's Interest,
LLC
Baker/Wiggins Interest
- Woodstock, LLC
Dough Daddy I, LLC
Rongela Pizza
Company
Rongela Pizza
Company
^wyi§^^
742
»t^"L
Northern Pizza Co.,
LLC
Red Bluff Foods, LLC
Cj2f
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129
179
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FJ Zak Enterprises #2,
LLC
FJ Zak Enterprises,
LLC
TMD Lockport
Associates, LLC
Pizza Enterprises Inc.
is
City
State', Zip • \ r Phone
Contact
,Go iii pany Name
670
602
11830-A South Rte 59
127 E. Irving Park Blvd
Plainfield
Streamwood
IL
IL
60585
60107
815-267-8500
630-372-2424
Davies, Todd
Zak, Frank
T.M. Davies, LLC
FJ Zak Enterprises #3,
LLC
397
INDIANA
;
101-B Green River Rd
Evansville
IN
47715
812-477-2424
Crockett, Brad
500
5625 Pearl Drive, Ste G
Evansville
IN
47712
812-962-0034
Crockett, Brad
1830 Rieth Blvd
Goshen
IN
46526
574-875-0888
355
3459 West 86th Street
Indianapolis
IN
46268
317-471-8001
Lindcmonghufn^
Id, JantesRoh
Coffland, Mel
Crockett Enterprises,
Inc.
Crockett Enterprises,
Inc.
Hoosier Pizza, LLC
360
9982 E. Washington St
Indianapolis
IN
46229
317-895-0850
Coffland, Mel
635
3652 South East St
Indianapolis
IN
46227
317-781-1772
Coffland, Mel
M83
4320 Grape Rd
Mishawaka
IN
46545
574-272-3000
535
493
470 New Albany Plaza
6028 Central Ave
New Albany
Portage
IN
IN
47150
46368
812-944-4942
219-764-8045
LindemanShuffie
Id, JamesRflb
Westberg, Steve
Abbasi, Ed
28
ZS5
2020 W. 23rd SL Ste A
8520 W. 135th St
Lawrence
Overland Park
KS
KS
66046
66223
785-832-1110
913-851-7760
Sasko, Hal
Haskins, Steve
559
4990 Roe Blvd
Roe land Park
KS
66205
913-677-9605
Haskins, Steve
81
2450 S. 9th St, Ste 304
Salina
KS
67401
785-404826-
315
Topeka
KS
66614
785-273-9300
768
439
2130 SW Wanamaker
Road, Ste 110
3501 S Topeka Blvd
8320 W. Central
KeHevSasko.
GregHal
Sasko, Hal
Topeka
Wichita
KS
KS
66611
67212
785-267-3211
316-773-1782
Sasko, Hal
Altenburg, Troy
468
6505 E. 37th St North
Wichita
KS
523
3109 S. Seneca
Wichita
KS
42104
270-843-9299
Saldana, Karl
40422
859-936-1616
41042
859-525-6380
McG ranahanKir
ta&L, JifflJ^ike
JenesSquibbBrvftftPavid
';33
400
2157 Harrodsburg Rd
Lexington
KY
40504
859-275-1980
Walter, IV, Pat
71
1315 Winchester Rd
Lexington
KY
40505
859-246-1116
McG ranahanKir
114
DAL01;4456057vil
079684.0103
Emily LLC
Haskins Enterprises
IV, L.P.
Haskins Enterprises
IV, L.P.
Always Hot #581, LLC
Always Hot, LLC
Sasko's Pizza LLC
Kolander Group
Kansas 439, LLC
67226 316-683-2559 Altenburg, Troy
Kolander Group
Kansas 468, LLC
67217 316-260-3360 Altenburg, Troy
Kolander Group
Kansas 523, LLC
V 67207. -.316-683-2424
ArlteRburgi-T-roy ' Kolander G f o u p l ^
Ktmsas;'576;^LLiCi5
14-333 li.iKeHoggvvSuite-" WiolHttt^ . J
400 '
'KENTUCKY
760 Campbell Ln, Ste
Bowling Green KY
117
1560 Hustonville Rd,
Danville
KY
Ste 227
4989 Houston Rd
Florence
KY
237
LRM #535, LLC
AbbasI Tradings &
Invesments, Ltd.
219-865-8111
m
505
600
576
M&MPizza of Ohio
Corp. Inc.
M&MPizzaofOhio
Corp. Inc.
M & M Pizza of Ohio
Corp. Inc.
Hoosier Pizza, LLC
Saldana Enterprises,
Inc.
CMT Pizza Partners,
Inc.
Awesome RestawfantGffiapgqulbb
InfeLLC
Walter and Lake
Foods, Inc.
CMT Pizza Farmers,
Inc.
1t m r
Vdilrcss
( it>
SL U' / . i |
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Cunt .let
, Comp . i i i \ Name
il
Liiuisvilli'
i72
3003 l{iLTki>iiiHl<>t1 I1IU>
352 Kroger Center
KY
Morehead
KY
40351
606-783-1550
124
121 Bryant Dr
Nicholasville
KY
40356
859-885-0666
70
256 Richmond MalL
Space F5
Richmond
KY
40475
859-623-1555
"4(
\Vl<S(lu>I^. '^ICM'
McC ranahanKir
,tner. JimMike
McG rang ha n m i ;
Iner, JimMike
I K M -.xAy. I . l (
CMT Pizza Partners,
Inc.
CMT Pizza Partners,
Inc.
CMT Pizza Partners,
Inc.
i
192
1420 MacArthur Dr.
Alexandria
LA
71301
318-442-6969
Chesnut, Lonny
Lake Chester, Inc.
294
7060 Siegen Lane
Baton Rouge
LA
70809 225-291-2424
Chapman, Kevin
PRD Venttires LLC
442
5260 Corporate Dr.
Baton Rouge
LA
70808 225-923-2840
Chapman, Kevin
PRD Venttires LLC
. m*f\\*w\r^^i - Pftl*j*»-I'
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487
2142 Airiwe4)rivtft-jite,: : iJossier-Gity
feA
74444 318 741' 2424
Alpliarl-izmv-LiLyG :
265
1905 W. Thomas
Stt-eet, Ste A
3501 Chateau Blvd, Ste
103
2622 Johnston St
3533 Ryan St.
1963 Barataria Blvd
6311 Airline Park
Shopping Center
Hammond
LA
70401
985-419-2200
Mooney, Shannon
M & M Pizza, L.L.C.
Kenner
LA
70065
504-466-2442
Mooney, Shannon
M & M Pizza, L.L.C.
Lafayette
Lake Charles
Marrero
Metairie
LA
LA
LA
LA
70503
70605
70072
70003
337-237-6466
337-562-2223
504-340-2424
504-818-2422
Chesnut, Lonny
Chesnut, Lonny
Mooney, Shannon
Mooney, Shannon
Chesterfield, Inc.
Lake Chester, Inc.
M & M Pizza, L.L.C.
M & M Pizza, L.L.C.
6730 Pines Road, Suite
205
6570 Youree Dr
Shreveport
LA
71129
318-687-4500
Garriott, Robert
Perfect Pizza, L.L.C.
Shreveport
LA
71105
318-798-6151
Garriott, Robert
174
407
140 Gause Blvd West
3426 Cypress Stt-eet,
Suite 14-5
Slidell
West Moiu-oe
LA
LA
70460
71291
985-639-8100
318-396-3441
Klepfer, Charles
Witten, Kenny
YOUREE PIZZA,
L.L.C.
CMK Pizza, L.L.C.
KDW Pizza, Inc.
573
6473 Baltimore
National Pike
Baltimore
21228
410-719-1001
Everett, Brad
680
158
190
460
378
698
713
643
•. M J f ^ J J J . i f I . U V l . V l . l l l U R .
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MD
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20649
Suite I36C
•
240-725-0000
Mucho Pizza, LLC
Kverettj-Brad
iVtn<Hte44//.a, L ITG
853
5010 Buckeystown
Pike, Suite 136-140
Frederick
MD
21704
301-846-9099
Shuffield, Rob
RTS Enterprises #1,
Inc.
534
Gaithersburg
MD
20878
301-869-1006
Everett, Brad
Mucho Pizza, LLC
Glen Bumie
Hagerstown
MD
MD
21060
21740
410-760-9200
301-791-0911
Everett, Brad
Shuffield, Rob
Mucho Pizza, LLC
RTS Enterprises, Inc.
LaVale
MD
21502
301-729-5262
Miller, Paul
Pizza Rica, LLC
465
45
642 Quince Orchard
Rd.
26 Mountain Road
1580 Wesel Blvd, Unit
6
12101 Winchester Rd,
Unit 31
12111 Rockville Pike
8675 Pulaski Hwy
Rockville
Rosedale
MD
MD
20852
21237
301-770-4600
410-780-4009
Everett, Brad
SalmonsSolomon.
©avidKen
Mucho Pizza, LLC
Solomon Family
Enterprises, LLC
708
645
6319 Dort Highway
32415 John R Road
Grand Blanc
Madison
Heights
MI
Ml
48439
48071
810-695-1021
248-583-3900
Lyon, Jim
Tucker, Tracy
SSB Pizza, Inc.
LDS Pizza, Inc.
459
598
495
MINM St)l \
12^2-1 OHM ( i'niri*
l)ii\y
4345 Niuluiii 1 iMit'.
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221 28th St SE, Stes
Rochester
MN
55904 507-282-2233 Witthoefti5iu£gl£ WURGLER-YANISH,
600
INC.
LErieKYk
• iVllW •• ;\ 55448) V651 340^0228^^ V-oung'f-Gresi-'i'^^' • • .Piao^^West Incf/jf't.:
^^'836 1731 S. Robert St:.
w-st-piiur-- \ ' "
•>• _
'--yjk
H^IDiur^^^f :
422
227 Amold Crossroads
Arnold
MO
63010 636-287-2424 Peterson, Debbie
Show-Me CiCi's Pizza,
Center
Inc.
454
221 S. Broadview
Cape
MO
63703 573-339-4555 Peterson, Debbie
Show-Me CiCi's Pizza,
Girardeau
Inc.
512 2609 E Broadway, Ste
Columbia
MO
65201 573-814-1230 Peterson, Debbie
Mopi, Inc.
216
379 798 Market Street
Farmington
MO
63640 573-756-9998 Peterson, Debbie
Show-Me CiCi's Pizza,
Inc.
(viXOi ':!ntS23-2424 • :
!;Y90()^S:.Riingelinc, Ste/ .:
M pza rk-N_atio nsi
1
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527
4900 N. Oak Trfy
Kansas City
MO
64118
816-452-3770
Haskins, Steve
328
Liberty
MO
64068
816-792-2428
Downey, Ray
456
202 N. 291 Hwy, Ste
A/B/C
9745 Manchester Road
Rock Hill
MO
63119
314-963-7200
Faller, Brad
20
2207 B North Belt Hwy
Saint Joseph
MO
64506
816-676-2424
530
7425 S. Lindbergh Blvd
Saint Louis
MO
63125
314-487-2465
Wnlters,R^
ICerFy£ondren
Faller, Brad
104
319 East Battlefield
Rd., Ste D
Springfield
MO
65807
417-886-9696
Nations, Dan
iviissKsippi'^ll^^^
627
361 Ridge Way
Flowood
MS
:;iT2f)B^Hwyi9!North1;S
t'G«llpoP&-r':k:
^6M.
220 3720 Hardy Street, Ste
Hattiesburg
MS
6
409
547 Bonita Lakes Dr,
Meridian
MS
Suite A
335
1055 Goodman Rd, Ste Southaven
MS
A
341
3870 Market Center
Tupelo
MS
Drive
393
827
361
377
KJti"
Kolander Group of St
Louis LLC
FftitbfalRLG Pizza
Inv^estors, LLC
Kolander Group of St.
Louis No. 530, LLC
Mozark Nations, Inc.
r ,
39232 601-992-4550 Wolfe, Lee
G. & H. Pizza, L.L.C.
vV39503 '228.539"^440^V •Crichiow;:Sti^^:yi ^ Su nco Coil cebtsj - H H
39402 601-264-2393 Chapman, Kevin
PRD Venttires LLC
39301
601-581-2110
Wolfe, Lee
Wolfe Pizza, LLC
38671
662-349-9296
Glinsky, George
38804
662-842-2848
Solomon, Ron
Stonehedge Pizza,
LLC
Jackson Pizza, L.L.C
Albemarle
NC
(ipyy'28001
Apex
NC
Asheboro
148 S Tunnel Road, Ste Asheville
D
j:4829~HeHdersbhvilieT^ :
636 NC 24 27 Byp E,
Ste 14
1007 Beaver Creek
Commons Dr
1337 E. Dixie Dr.
Haskins Enterprises
IV. L.P.
Dawg Pizza, LLC
f^Mi" ''rym
^Pyy..
7 - ^ / S L ^ ^ * ^
704-982-2424
Davis, Jim
CJD Pizza, Inc.
27502
919-249-6448
Elliott, Michael
Digitalsoft, Inc.
NC
27203
336-636-5666
Kennedy, Neil
NC
28805
828-298-0010
Springate, Alan
MKK Incorporated of
NC
Hope Pizza, LLC
^ 288031 r;828 27jt T979
-vC^rdol T^izzQ^
•
427
n o N r \ v M i V r l r r i Gnntor
•11-
313
248
^ t y X f X T l l K i - i , ...
1.
3356 S. Church Road
683-F Cary Towne
Blvd, Ste F
DALO1:1156057.1119S637.1
079684.0103
Burlmgton
Cary
'
NC
NC
•••
27215
27511
/^~:
-
8-
336-584-9596
919-469-9988
. puutwuiiai-Dryiiii
Moore, PJ
Potter, Nick
/
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rail ixiver ii;itTgrprii
:.4neli^=:"'LLC
S&C Buriington,
NTR Group, LLC
\ddrLss
1 u\
Sl.llL
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Charlotte
NC
28213 704-510-5595
Charlotte
Clayton
Durham
Fayetteville
NC
NC
NC
NC
28273
27520
27707
28314
Fayetteville
NC
642
289
10900 University City
Blvd, Ste 13-15
10720 S Tryon St, Ste 1
905 Town Centt-e Blvd
4600 Chapel Hill Blvd.
229 Westwood
Shopping Center
7760 Good Middling
Drive
3811 Ramsey St
3746 E Franklin Blvd
Fayetteville
Gastonia
215
431
4648 W. Market Stt-eet
3379 Battleground Ave
368
SKir
353
674
440
296
225
611
763
324
268
802
448
343
283
753
425
498
205
311
318
437
150
BHL Pizza, LLC
704-504-0004
919-359-0175
919-403-2424
910-868-7333
Motaleb, Mosen
Vinyard, Wayne
Potter, Nick
Potter, Nick
Fast Pace, Inc.
Clayton-BHV, Inc.
NTR Group, LLC
NTR Group, LLC
28314
910-864-3040
Potter, Nick
NTR Group, LLC
NC
NC
28311
28056
910-323-4000
704-823-8636
Potter, Nick
Springate, Alan
Greensboro
Greensboro
NC
NC
27407
27410
336-297-4008
336-545-6440
Kennedy, Neil
Kennedy, Neil
425-D Greenville Blvd
S.E.
214 Thompson Sfreet
Greenville
NC
27858
252-756-4333
Potter, Nick
NTR Group, LLC
Springate Enterprises,
L.L.C.
Irish Forever, Inc.
Family Affairs of
Guilford Inc.
NTR Group, LLC
Hendersonville
NC
28792
828-697-4460
Brown, Jeff
2025 US Highway 70
SE
2705 N. Main Street,
Ste 112
5824 Samet Dr, Bldg C,
Stes R-S
14205 Reese Blvd, Ste
E2
1315 A Westem Blvd
1000 Cloverleaf Plaza
819-C South Main
Hickory
NC
28602
828-345-1444
Springate, Alan
Mountain Man Pizza,
LLC
Bevo Pizza, Inc.
High Point
NC
27265
336-885-3333
Moore, PJ
S&C High Point, LLC
High Point
NC
27265
336-841-1006
Moore, PJ
Huntersville
NC
28078
704-992-1661
Springate, Alan
S & C Deep River,
LLC
Holly Pizza, LLC
Jacksonville
Kannapolis
Kemersville
NC
NC
NC
28546
28083
27284
910-478-0606
704-795-7400
336-992-4220
Moore, PJ
Hatfrich, Mark
Kelly, Tracy
4001 Wide Waters
Pkwy, Ste G
3221 Fayetteville Rd
1804 Windsor Square
Rd., Ste. U-V
1951 Dickerson Blvd
168-Z Norman Station
Blvd.
3015 Martin Luther
King Jr. Blvd
10707 Park Road, Ste R
Knightdale
NC
27545
919-861-2442
Vinyard, Wayne
PTS Group, Inc.
M C. Pizza, L.L.C.
JT KELLY
ENTERPRISES, LLC
K-BHV, Inc.
Lumberton
Matthews
NC
NC
28358
28105
910-608-6400
704-845-5002
Potter, Nick
Davis, Jim
NTR Group, LLC
D & D Pizza, L.L.C.
Monroe
Mooresville
NC
NC
28110
28117
704-225-0829
704-799-8789
Davis, Jim
Springate, Alan
Tia Marie's Pizza, LLC
Alto Pizza, Inc.
New Bern
NC
28562
252-633-4500
Potter, Nick
NTR Group, LLC
Pineville
NC
28210
704-341-9303
Springate, Alan
NC
27604
919-863-2424
Vinyard, Wayne
T.F.S.
ENTERPRISES, L.L.C
Emporium-BHV, Inc.
3501 Capital Blvd., Ste Raleigh
132
7901 Falls-of-Neuse-Hdr Raleigh
402
593
675
387
413
( cMiipiin\ Ntinif
Hatttich, Mark
401
855
^^^^:ict
803-805 Jake
Alexander Blvd, South
161 Indusfrial Park Dr
237 Skyland Plaza, Ste
100
1929 East Broad Street
12516-101 Capital
27615 0 ^ 6 4 - 2 4 2 4
Vi Hy a rd, Wa y ne
Bent-Tree-BllV, Im
Salisbury
NC
28147
704-638-2424
Hattrich, Mark
lAAM Pizza, LLC
Smithfield
spring Lake
NC
NC
27577
28390
919-938-2424
910-496-2000
Potter, Nick
Potter, Nick
NTR Group, LLC
NTR Group, LLC
Statesville
Wake Forest
NC
NC
28625
27587
704-883-9988
919-556-1911
Springate, Alan
Vinyard, Wayne
Hats Pizza, LLC
WF-BHV, Inc.
DALO 1:11S6057J1I95637.1
079684.0103
-
9-
State^ Zip
Phone
Wilmington
NC
28403
910-332-0281
Potter, Nick
NTR Group, LLC
Wilson
Winston Salem
NC
NC
27893
27106
252-291-5836
336-723-7273
Potter, Nick
Moore, PJ
NTR Group, LLC
WINSTON-SALEM
PIZZA ENT., INC.
:'Cify'~t.
499
488
216
533
582
825
819
m
-
Blvd.
341 S. College Rd(NC
Hwy 132), Suite 8A
175 Raleigh Rd. W
2857 Reynolda Road
:.r»^EBR>VSI^^^^C3^^
5100 N. 27th St, A-8
Lincoln
3205 Oak View Dr.
Omaha
:r5JiiVV:^RSEY
:.-r '\
818 Haddonfield Rd,
Cherry Hill
Ste A
85 Rte 17 South
E Rutherford
Howell
NEW M E X I C O ^ ^
us Hwv 9
-NKWMEXTCO^:feA^
4770 Montgomery NE,
Albuquerque
Ste D104-107
815 El Paseo
Las Cmces
*•
05
269
406
281 OA North Main SL
Roswell
INEYADA
' .309 N. Nellis IJIvd. Ste
I'Contact
Gompany Nainc'/ .*
'':f!'i y ' f yW''%'-yky-^§^
68521 402-476-8888 Tibbets, Bret
68144 402-991-2992 Tibbets, Bret
NE
NE
NJ
.
NJ
Team Tibbets, Inc.
TKO Pizza Company
" l
8002
856-910-2424
Stout, Harry
7073
201-438-8200
732-370-7090
Kroemer, Stephen
Rastoffi. Rajeev
Stouts Food Service,
LLC
SFK Enterprises, Inc.
ICIC Services. LLC
07731
y^-y
NM
87109
505-881-2424
NM
88001
575-526-5500
GrfttbNewhall.
AdamQuinn
Terrazas, Graciela
NM
\ .
NV>
88201
575-625-2424
Vigil, Ricky
Pizza Pals of
Albuquerque, LP
Terrazas Enterprises,
Limited Partnership
AZZIP, INC.
i"_
_702 437-1748^_
i
- -
•-
Haskins, M.M
Pe^J F,nt£ri]jjses,,
DeFo Enterprises, LLC
9890 S. Maryland
Pkwy, Ste 25 &. 26
6475 N Decattir, Ste
180
3059 N Rainbow Blvd
4445 W Charleston
2415 E Tropicana Ave
Las Vegas
NV
89183
702-260-9298
Haskins, Mike
Las Vegas
NV
89131
702-257-2424
Wollenhaupt, Eric
Si Si Pizza No. 1,LLC
Las Vegas
Las Vegas
Las Vegas
NV
NV
NV
89108
89102
89121
702-396-4044
702-293-2422
702-898-2424
Si Si Pizza No. 2, LLC
Si Si Pizza No. 3, LLC
DeFo Enterprises, LLC
Las Ve^as
NV
'58
NEW YORK8465 W.
Sahara Ave. Ste 100
22.35 F,. Chevenne M .
Ave,,S|p.200 > • NEW. YORK'"
145 Wolf Road
WollenhaupL Eric
Wollenhaupt, Eric
DenoyerliasIaM,
©rew/Vlike
WollenhaupL
Eric
38
839
750
806
830
831
56
m.
702-822jm
•NV ..
89117
S9030
Albany
NY
>.
12205
^ ' - ^.
518-482-2424
7785 Frontage Rd
Cicero
NY
3237 Erie Blvd E
OHI01514 Countv
??te,6^
• 1222 Arsenal Sl
Dewitt
NY
73039
130.39
13214
315-380it5S70004242
315-396-0717
>North Las .
V^as "* i
4
-
J
m.
>•
TurcotteBrvndq.
Pftutpryan
Santy, James
Pelton, Cliff
I^attin. JV^jchqel
LLG
DeFo #725. LLC
i-
Brynda, LLC
Santy & Son, Inc.
MacMattison LLC
Watertown
NY
14S45
13601
315-681-6061
K
Akron
OH
330-644-8733
Ruihsaiz, Brian
SW Pizza Green, LLC
664
OHIO
790 Arlington Ridge,
Ste 227
2618 W. State St
330-821-7788
Ruthsatz, Brian
503
i615
36050-E Detroit Rd
^463 Boq^iiiHri^
Avon
OH
^Bonrdninn!
SW Pizza Alliance,
LLC
AVON CCP, LLC
•^SW^P-igaa Btioi-dmai
Hflpper. Chris -
,i>
81
Alliance
Pizza. Inc.
Kurlhcrji Pizza.Cu„^
LLC
' ^
t'
OH
44312
44601
440-934-3855 Zappemick, Matt
44011
t 445X2 ^30 629:8890
-ific^k'^l^'Pl
DALO 1:1I56057.11I95637.I
079684,0103
^ ^ ^ r ^ ^ f - - y ^ Z ^ « . ' Citv
. .State
.Phone
^-
CJ-''.
-Contact
'^'^ .'.Company Name^. . .
485
4824 Ridge Rd
Brooklyn
OH
44144
216-661-3870
Zappemick, Matt
549
4404 Belden Village St
NW
Canton
OH
44718
330-491-1919
Ruthsatz, Brian
565
420
546
i62
438
•^^^^yy^-^yy
••«|#245^ •'51-l'-75^ 7501
gf^in^jjrmotj
'^y' • ^'
/V W ra U111 c - f ^ t j ^ i t l l i l_U 1
5426 & 5432
WestPointe Plaza Dr.
7048 Perimeter Loop
Rd
5478 Dixie Hwy
Columbus
OH
43228
614-777-8930
Coffland, Mel
Dublin
OH
43016
614-336-9975
Coffland, Mel
Fairfield
OH
45014
513-829-1572
Jftflesgquibb.
BryewDavid
1335 Stoneridge Dr
Gahanna
OH
43230
614-337-2864
Coffland, Mel
-636;-' 4-786^fiingtown-Rd. "
BROOKLYN CCP,
LLC
SW Pizza Belden
Village, LLC
"i'^'ii"Vl'>l''" •6F4^soi" <>
Grov*-Gity4
-.•
Group, Inc.
M&MPizza of Ohio
Corp. Inc.
M&MPizza of Ohio
Corp. Inc.
Second-Stanza-
. \>'
of FaiKie'ld^LLC'^^^'^
M&MPizza of Ohio
Corp. Inc.
G n i r f i i i f i f l IX'If'l ' ' '
111 111) I " ^ '
" '
590
7631 Old Troy Pike
Huber Heights
OH
45424
937-236-2424
502
2156 Walker Lake Rd
Mansfield
OH
44903
419-747-3433
Balachandran,
Suresh
Ruthsatz, Brian
572
1677 Marion Mt Gilead
Rd, Ste 100
Marion
OH
^
' A l ' j t ^ MHPr/T'n n f O l i
iYt
,AT.l-.t^AA£.tl''\rl"\Jn
:.XorpUno. " iy?^:]
RBK Partners, LLC
478
152 Clint Drive
Pickerington
OH
681
21613 Center Ridge Rd
Rocky River
OH
810
553
4816 Milan Rd
1276 State Route 303
Sandusky
Sfreetsboro
OH
OH
679
5333 Monroe Street
Toledo
OH
676
1920 Niles- Cortland
Rd SE
714 North State Street
Warren
OH
SW Pizza Ontario,
LLC
43302 740-386-2191 McCardle, Mick
Lynick Enterprises,
Inc.
f 4 4 ^ 6 | s330433r49884::'' j^thsatzy-BriaiitlA.- 4
iion
.^:''^hC''Mt}i-yM±'m:^.^.
44060 440-357-0492 Zappemick, Matt
E. Mentor CCP, LLC
45212 513-376-8842 Squibb, David
Squibb Interests of
Ohio, LLC
43147 614-501-0530 Coffland, Mel
M&MPizza of Ohio
Corp. Inc.
44116 440-331-4114 Zappemick, Matt
ROCKY RIVER CCP,
LLC
44870 419-626-0695 Zappemick, Matt
Sandusky CCP, LLC
44241 330-422-1760 Ruthsatz, Brian
SW Pizza Sfreetsboro,
LLC
43623 419-843-8785 Zappemick, Matt
MONROE STREET
CCP, LLC
44484 330-544-5880 Ruthsatz, Brian
SW Pizza Niles, LLC
Westerville
OH
43082
614-901-3346
Coffland, Mel
Wooster
OH
44691
330-345-2233
Ruthsatz, Brian
Ardmore
OK
73401
Broken Arrow
OK
Edmond
\ Mffesillon fvfi/'4^
" -' - / i;Mafkptplflee^rjsW|::; •S^yHf'iy''' ^'""^•^^•^
Mentor
639 9559 Mentor Avenue
OH
702 4410 Montgomery Rd
Norwood
OH
462
520
i823
lls
279
73
3786 Burbank Road,
Unit 601
|(S®AHOMA
y
2401 12th Ave, NW,
Ste 104 G
732 W. New Orleans,
Ste 124
1520 East 2nd Sfreet
nil
Mi
580-223-0013
Lasater, Kevin
74011
918-449-8908
Costley, Greg
OK
73034
405-341-1112
Griffin, Mike
580-237-3000
Griffin, Mike
224
3604 W. Garriott Road
Enid
OK
73703
696
83
1222 NW Sheridan Rd
2321 S Air Depot, Ste
101
540 W. Main St
Lawton
Midwest City
OK
OK
73505 580-355-3248
73110 405-741-2424
Garriott, Robert
Costley, Greg
Norman
OK
73069
405-360-1114
McCann, Kelly
72
DALO 1:1156057.11I95637.1
079684.0103
M&MPizza of Ohio
Corp. Inc.
SW Pizza Wooster,
LLC
11
Little Fella Pizza, Inc.
Costley Enterprises,
Inc.
Wm. D. Griffin
Company, Inc.
Wm. D. Griffin
Company, Inc.
EMG, LLC
Costley Enterprises,
Inc.
KGM Properties, Inc.
fStor'f j ^ I d r ^ ^ ^ ^ ^ j
Gitr
A' , States ;zipv?
Phone
Contact
, Company Name- •
81
2500 North Meridian
Oklahoma City
OK
73107
405-947-8900
McCann, Kelly
KGM Enterprises, Inc.
153
7206 N. W. Expressway
Oklahoma City
OK
73132
405-722-9977
Burgess, Jerry
716
7341 South Westem
Ave
9540 North Gamett Rd,
Ste 107-109
Oklahoma City
OK
73139
405-6021900
McCann, Kelly
EXCEEDING THE
VISION, INC.
KGM 716, Inc.
Owasso
OK
74055
918-609-5566
Mitchell, Mick
Dos Bros, LLC
721
349
Sfillwuterirj</V :OK-:5 .>-74075. f105:707;9300W| Gftffii»^;Miltet-p- '": Wm. D. Griffin::
721 yorth Main
63
1918 S. Gamett
Tulsa
OK
74128
918-438-4242
Costley, Greg
90
8955-C South
Memorial, Ste H
4949 S. Peoria
1044 W. Vandament
Tulsa
OK
74133
918-254-4775
Costley, Greg
Tulsa
Yukon
74105
73099
918-744-8338
405-350-2322
McKenzie, Bob
Vela, Tray
|18
2728 Plank Road
CMNS
Altoona
OK
OK
. PA
16601
814-942-9422
KolandcrSmith.
PaulDave
f
1025 Washington Pike
Bridgeville
PA
15017
412-220-2450
148
169
29
PanlDave
600 Moraine Pointe
Plz, Rte 356
Butler
PA
' ' m i l nt'r i9-' ^
>.Granbern' Mall. Ste ^,
788
812
6S
764
(i33
3812 Easton Nazareth
Hwy
314'LinrnIn AY£11UC..
Snite 1
4045 Buffalo Rd, Unit
33, 34
1570 Oakland Ave
2405 Covered Bridge
Dr.
165E Levittown Pkwy
Easton
724-287-2424
16001
JPiV ' "46066^
PA
18045
KolanderSmlth.
PawlDave
•;^y...0^^^!^yy
610 -746-2424
Vovra, Devin
16510
814-899-8060
Indiana
PA
15701
724-463-1200
KolanderSmlthPa«lliaii£
Lancaster
PA
17602
717-392-2740
Miller, Paul
Levittown
PA
19055 215-547-7499
-PAfi-t
Kolander Group of
Pittsburgh No. 618,
LLC
Kolander Group of
Pittsburgh No. 563,
LLC
Kolander Group of
Pittsburgh No. 529,
LLC
KotafldeV-Greup^^
Nazareth Group, LLC
B"ht--rto. . • . , JMC P.ncnhnVi/:/a - :
Matthew .Company, Inc.
Kuhn, Joe
JMK's Team, L.L.C.
£ast_ ^ . ,^,..-•
StroudsbjiI:c
Harbor Creek
PA
~570 -422-2424
Costley Enterprises,
Inc.
Costley Enterprises,
Inc.
Lyon Enterprises, Inc.
TCV Enterprises, Inc.
Stout, Harry
-1 ^ I 4 A
Kolander Group of
Pittsburgh No. 568,
LLC
Covered Bridge Pizza,
LLC
Stouts Food Service,
LLC
i,44oiander^rd'u |>?^
•"PUr<:hii'i'pti^.Nft
• ' t t t ^ U l t I f i l l t ^ v .. 6u 7
* v0»^.
57
8967 Rt 30
N Huntingdon
PA
635 :
15642
724-863-8999
ir»803'.'
•I'-A
KolandcrSmith.
Pa^ipay^
Kolander Group of
Pittsburgh No. 557,
LLC
44&landeivP-attl^ , ; ,ifala ndeM^rou prof
Pittsburgh No.^^25,;
11
301 Oak Spring Rd
Washington
PA
15301
724-225-8888
KolHnderSmith.
PfttilPave
792
2180 MacArthur Rd,
Suite #18
Whitehall
PA
18052
610-439-2424
Vovra, Devin
DALQl:1156057Jj
079684.0103
- 12-
Kolander Group of
Pittsburgh No. 511,
LLC
P.C.V Group LLC
\ddi(.\s
Zip
\i ii\
Pliniie
Ccinlact
351 Loucks Rd., SteA2
York
PA
17404
717-650-2424
Scheuchenzubef£
iskui:, JeeMitch
321
3128 N. Main Sfreet
Anderson
SC
29621
864-222-2595
Taylor, Clay
232
630 Skylark Rd., Ste N
Charleston
SC
29407
843-556-2500
Wojnowski, Pete
213
6120 SL Andrews Rd
Columbia
SC
29212
803-750-5900
Todd, Carson
297
141-A Pelham Dr
Columbia
SC
29209
803-776-8900
Todd, Carson
715 Fashion Drive,
Columbia
SC
Suite 4
I M i l 3 7 3 0 ; N - M i n - S i ^ a e t ^ i fCo lu mbiyM^'tl
6020 Calhoun
E as ley
?93
SC
Memorial Hwy
172
1945 West Palmetto
Florence
SC
Sfreet
210
583 Haywood Road,
Greenville
SC
Ste.503
316
1501 N. Hwy 17, Ste J
Mt. Pleasant
SC
29229
803-419-8982
Uehling, Mitch
623
782
t"
726
3550 Northgate Rd
4950 Cenfre Pointe Dr,
Ste 160
134
1807 Cherry Road,
#163-165
173
150 East Biackstock
Rd., Ste D
285 , M)I5(I Dtiulivsli-i
; kd.l nit II) 21)
SOL'MI i ) \ h ( > l \
688 5007 S. Louise Ave
275
266
732
332
226
474
555
183
365
475
267
178
Pepperoni Partners, LP
1
Flying Anchovy #321,
LLC
Seaside Investors
#232, LLC
Columbia Investors
One, LLC
Columbia Investors
Two, LLC
MBTL, Inc.
3292^1 !i803j254?454fr#l MwsgChnsj^:^
W^^^Bg&B
29640 864-855-1221 Taylor, Clay
Flying Anchovy #293,
LLC
29501 843-413-0600 Emami, Mark
E.I.P. Enterprises, LLC
Myrtle Beach
N Charleston
SC
SC
29588
29418
843-294-2121
843-747-7227
Potter, Nick
Wojnowski, Pete
Rock Hill
SC
29732
803-324-3433
Davis, Jim
Flying Anchovy #210,
LLC
Seaside Investors
#316, LLC
NTR Group, LLC
Seaside Investors 782,
LLC
Jimmy D's Pizza, Inc.
Spartanburg
SC
29301
864-576-2277
Taylor, Clay
Flying Anchovy, LLC
29607
864-675-9277
Taylor, Clay
29464
843-216-2122
Wojnowski, Pete
2*.
'^llliiniei \ llll
' S43-S":|-: 4U4
(>ilU-|il. '^Ifplieil
' 1 l i e I I I * ! < lli.'i**^t'
Sioux Falls
SD
Bartlett
TN
Chattanooga
57108
605-362-9900
Hlebichuk, Neil
Dakota Land Pizza,
L.L.C.
38134
901-387-0999
Glinsky, George
TN
37421
423-485-0900
Potts, Steve
Stage Center Pizza,
Inc.
Potts & Pans, Inc.
Clarksville
TN
37042
931-905-2424
Saldana, Karl
Clarksville
Cleveland
TN
TN
37043 931-802-8961
37312 423-473-9550
Saldana, Karl
Nelson, Bill
Collierville
TN
38017
901-854-4030
Smith, Scott
1202 S James Campbell Columbia
Blvd, Ste 1-A
541 S. Willow Ave
Cookeville
1425 Germantown
Cordova
Pkwy., Ste 1
TN
38401
931-388-1330
Smith, Scott
TN
TN
38501
38016
931-528-2424
901-752-5554
Johnson, Ben
Glinsky, George
6600 Stage Road, Ste
123
2260 Gunbarrel Rd.,
Ste. 302-A
76 Dover Crossing
Road
1604-A Madison St
355 Paul Huff Pkwy
N.W.
930 W. Poplar, Ste 1
202 \ \ illiiiiiiMiii '»t|uiiii*
565C Village Green Dr
4451 Lebanon Road
5425 Hwy 153, #100
DALOLl
079684.0103
1 1
1
•IIM^**' 1
113
ll^^^^Jg II1V
1 1iiiiKliii
Gallatin
Hermitage
Hixson
i
i N
TN
TN
TN
Saldana Enterprises,
LLC
SPR Enterprises, LLC
K&K Pizza Partners
Cleveland, LLC
Market Center Pizza,
LLC
GCF Pizza, LLC
We Luv Pizza, LLC
Club Center Pizza,
LLC
3~li(i4 (il5 "Ul 44*)*J 1 xpciiioi. Su\eii
\^ ( 1 1 nli-i pi isev
' 4ii<- '
'
'•
37066 615-230-5777 Neff, Ronnie
R&M Images, Inc.
37076 615-232-0950 Neff, Ronnie
R&M Images, Inc.
37343 423-876-1000 Potts, Steve
Potts & Pans, Inc.
ISlor*' Address ' •
Pm
157
State ' Z i p ' Phone'.^
. ^Contact V
Conipany Name , '.:
Jackson
Johnson City
TN
TN
38305 731-668-3333
37604 423-282-2115
Hughes, Tony
Johnson, Matt
162
99 Old Hickory Blvd
198 Marketplace, Ste
130
2885 Tazewell Pike
Knoxville
TN
37918
865-281-2255
Goodman, Aaron
301
8414 Kingston Pike
Knoxville
TN
37919
865-694-5060
Goodman, Aaron
740
233
155 Legends Dr, Ste A
1765 Gallatin Road
North
3474 Plaza Ave
Lebanon
Madison
TN
TN
37087
37115
615-444-2221
615-860-4227
Dorsey, Keith
Spencer, Steven
Memphis
TN
38111
901-452-6225
Cabot, Greg
710 Memorial Blvd,
Ste 220
5735 Nolensviile Road
Murfreesboro
TN
37129
615-867-4424
Geren, Greg
Nashville
TN
37211
615-833-2350
Spencer, Steven
Nashville
TN
37211
615-331-1211
Neff, Ronnie
Sevierville
TN
37862
865-774-6696
Smyma
TN
37167
615-462-6157
Re^tersGilberL
MichaelRandall
Spencer, Steven
Pizza Unlimited
Sevierville, LLC
AYCE Enterprises,
Inc.
Abilene
Allen
TX
TX
/
79606
75002
325-692-1660
972-727-2424
Marlin, Tommy
Hetsel, Jeff
Alvin
TX
77511
281-585-2526
Eisermann, Tony
T.T. Marlin, Inc.
Allen Pizza
Enterprises, Inc.
Mucho Pizza, LLC
Amarillo
TX
79106
806-359-8000
McPanielMcGuff
in, JefenJerrv
Big Meadow
Enterprises,
826 North Collins
3415 S. Cooper, Ste
110
4400 Little Road
Arlington
Arlington
TX
TX
76011
76015
817-265-1994
817-465-6666
Garriott, Robert
SlteltenRobinetL
E.J.R.R.L., Inc.
QPP-Mayfield, LLC
Arlington
TX
76016
817-561-6011
Hetsel, Jeff
Arlington
TX
76018
817-419-6101
Haskins, Steve
Arlington
TX
76017
817-465-2345
118
58
2356 S.E. Greenoaks
Blvd, Ste 200
5904 South Cooper, Ste
110
7140 F.M. 1960 East
9717 N. Lamar, SteB
Atascocita
Austin
TX
TX
77346
78753
281-852-6969
512-873-8800
SheltftBRobinetf,
MarkChria
Eisermann, Tony
Villarreal, Bob
Little Road Pizza
Enterprises, Inc.
Haskins Enterprises
III, Inc.
QPP-Sublett, LLC
71
5365 N. IH 35
Austin
TX
78723
512-453-4488
Bird, Robert
Austin
TX
78745
512-462-3100
Smith, Greg
Austin
TX
78717
512-258-8600
Villan-eal, Bob
Austin
TX
78741
512-445-2400
Hayter, Jerry
Austin ^
TX- . :78757
738
463
230
326
524
22
799
28
14
132
2
12
2
99
228
04
116
156
525
Ijll
127
160
55 E. Thompson Lane,
Ste 109
1811 Parkway, Ste.
#105
900 Grammar Lane,
Suite 100
^TlEWXSr ' •
'
3366 Turner Plaza
204 North Greenville,
Ste 120
1701 Fairway Plaza, Ste
14
6605 1-40 West, Ste 1
1901 W. William
Cannon Dr., Ste 107
14005NHwy 183, Ste
600
2237 E. Riverside Dr,
Ste 101-A
f2525'^^'ndersnri''' •
h i m ^ B l i l p t f : Ste 132
4508 Garth Road, Ste G
5882-A Eastex Freeway
DALO 1:4456Q5?^1195637.1
079684.0103
..tl
Baytown
Beaumont
TX
TX
=
'
"
Smith: G r e f f f j ^ ^ : ^
HH Pizza, Inc.
MM Johnson Interests,
LLC
VOL InterestsKnoxville LLC
VOL InterestsKnoxville LLC
RPU, Inc.
AYCE Enterprises,
Inc.
GD Cabot Restaurants,
Inc.
G & AD, LLC.
AYCE Enterprises,
Inc.
R&M Images, Inc.
^•
Mucho Pizza, LLC
L. R. Villarreal
Enterprises, Inc
RBPB Enterprises,
LLC
S.G. Smith, LLC
Blue Heaven
Enterprises, Inc.
MCHENS 2000, INC.
^Sffiittv Restaiirarit^' * •
'•'.p
77521
77708
281-420-0181
409-892-6866
Eisermann, Tony
Wilcox, Jr., Buddy
Mucho Pizza, LLC
S.E. Tx Pizza, Ltd.
gtoa
City" q'.
^^8i
State -Zip'%
Phone ,
Contact,
'
Com pany Name
,
,
'
' -* -° *
'
i" ' • '
2101 Harwood Road,
Ste 115
901 North Loop 340,
Ste 4
105 Hwy 290 West
Bedford
TX
76021
817-545-7575
Mullins, Steve
STM Restaurants, LLC
Bellmead
TX
76705
254-867-0003
Becknauld, Rick
Brenham
TX
77833
979-421-2424
RJBecknauld
Enterprises, LLC
CROSSROADS
Brownsville
TX
78520
956-350-5100
Haynes, Mike
MH-Brownsville, Inc.
18
4365 N. Expwy 77, Ste
500
1107 Clements SL
Brownwood
TX
76801
325-646-3700
QPP-Brownwood, LP
59
1921 S. Texas Avenue
Bryan
TX
979-775-2424
49
105 N. E. Wilshire Blvd
Burleson
TX
77802
77801
76028
ShcltonRobinetL
Mai4tChris
Villarreal, Rick
817-447-2979
Hetsel, Jeff
20
Carrollton
TX
75006
972-931-0321
Baker, Cary
Carrollton
TX
75006
972-416-2626
Rastogi, Vijay
Canrollton
TX
75010
972-939-4888
Burke, John
Cedar Hill
TX
75104
972-291-7888
Rastogi, Vijay
Pisa Enterprises, Ltd.
Clebume
TX
76033
817-641-2424
TX
77840
979-694-2424
123
55
88
1134W. Dallas Sfreet
120 S. Denton Tap
4918 Ayers SL, Ste 120
College
Station
Conroe
Coppell
Corpus Christi
ShelteBRobinett.
MarkCbri^
Villarreal, Rick
QPP-Clebume, LP
189
2650 Midway Road, Ste
146
1927 E. Beltline Road,
Suite 108
1025 W. Hebron Pkwy,
Ste 140
140 W. FM 1382, Ste
140
1301 W. Henderson,
SteE
1903 Texas Ave South
NOTHING-COMESEASY, LLC
Burleson Pizza
Enterprises, Inc.
First Hospitality
Enterprises, LLC
Luxmi Enterprises,
Ltd.
TOGMP, Inc.
TX
TX
TX
77301
75019
78415
936-756-2522
972-393-2424
361-814-2424
Eisermann, Tony
Haskins, Mike
Haynes, Mike
Mucho Pizza, LLC
JBT Pizza, Inc
MD Haynes, Inc.
120
1502 Airiine Road,
Suite 230
4101 US Hwy 77, Ste
N4-N7
3731 W. Hwy 31
Corpus Christi
TX
78412
361-855-8008
Haynes, Mike
M/M Haynes, Inc.
Corpus Christi
TX
78410
361-241-2354
Haynes, Mike
M&R Haynes, Inc.
Corsicana
TX
75110
903-874-0011
DePugh, Paul
DePugh 7th Avenue
Enterprises, Inc.
18
446
26
236
24
327
470
336
65
' 77532 ^-
. ^m-3ym
6
9
19
13
10061 Whitehurst, Ste
101
330 Medallion, 6464
NW Highway
7879 Spring Valley
Road, Ste 139
6300 Samuell Blvd,Ste
101
Dallas
TX
75243
214-343-8077
Rogers, Frank
F & J Ventures, Inc.
Dallas
TX
75214
214-739-2424
Rogers, Frank
F & J Ventures, Inc.
Dallas
TX
75254
972-250-6242
Zier, Harlan
COIT/HJZ, Inc.
Dallas
TX
75228 214-388-2334
Rogers, Frank
F & J Ventures, Inc.
^27
41
44
50
306
:jiv
3128 Forest Lane, Ste
211
2441 Gus Thomasson
Road
5420 Lemmon Avenue
655 W. Illinois Avenue,
FIRST-IN-LINE, INC.
.75243.^ ;972:-235.;0888i£;i
Dallas
TX
75234
972-406-0404
O'Brien, Michael
Dallas
TX
75228
214-320-2424
Rogers, Frank
M&A Pizza Farmers,
LLC
F & J Ventures, Inc.
Dallas
Dallas
TX
TX
75209
75224
214-443-0299
214-943-7700
Zier, Harlan
Rastogi, Viiay
HMJZ, Inc.
VIRATX Enterprises,
DALO 1:44g60S?rtl 195637.1
079684.0103
- 15-
.City;
.State' Zip .
r*e;#^
451
653
668
:
f-
805
21
30
60
96
141
356
464
74
26
35
48
117
481
83
516
Bldg. 200, Ste 220
1515 S. Buckner Blvd,
Ste 115
4800 Columbia
Avenue, #300
4398 Dallas Fort Worth
TPKE, Ste 102
6186 Retail Road. Ste
Jim
1100 South FM51
2219 S. Loop 288, #105
303 S. Cedar Ridge
Drive
7500 N. Mesa, Ste 222
1700 N. Zaragoza Rd.,
Ste. 101
615 N. Zaragoza Rd,
Ste 58-62
8855 Viscount
4654 Woodrow Bean
Transmountain Dr
1901 Long Prairie
491
164
11
33
778
550
426
299
76
837
.!i}> . t \
.
.
.
Company Name
^ -
, 1
%
-
Ltd.
F & J Ventures, Inc.
Dallas
TX
75217
214-391-4242
Rogers, Frank
Dallas
TX
75226
214-370-3404
Rastogi, Vijay
Dallas
TX
75211
214-337-6624
Rogers, Frank
OaJlai ^
TX-;
75231
•912-771dMS2'*
Decatur
Denton
Duncanville
TX
TX
TX
76234
76205
75116
940-627-6273
940-891-0861
972-283-4999
Thomas, Keith
Garriott, Robert
Rastogi, Vijay
El Paso
El Paso
TX
TX
79912
79936
915-833-4900
915-857-3355
Busch, Karl
Busch, Karl
Pizza KAT, LLC
EG Enterprises, Inc.
B.S.R. Enterprises,
Ltd.
Amphibolite Inc.
Amphibolite Inc.
El Paso
TX
79907
915-860-8500
Busch, Karl
Amphibolite Inc.
EI Paso
El Paso
TX
TX
79925
79924
915-598-0700
915-751-7788
Busch, Karl
Busch, Karl
Amphibolite Inc.
Amphibolite Inc.
Flower Mound
TX
75022
972-691-9900
Brie Pizza Enterprises,
Ltd.
F & J Ventures, Inc.
F, iS( J YfintHre^i Inc.
Vardhaman Foods, LP
3401 Alta Mesa Blvd.,
Ste 166
9324 Clifford, Ste 130
Fort Worth
TX
76133
817-370-6292
BrianEiiaJl
Hetsel, Jeff
Fort Worth
TX
76108
817-246-6888
Haskins, Steve
6619 Forest Hill Drive,
Ste 70
6550 Camp Bowie
Blvd, Ste 107
950 N. Beach St
7451 N Beach St, Ste
128
2724 8th Ave
Fort Worth
TX
76140
817-483-3950
Dube, Mark
Fort Worth
TX,
76116
817-377-0900
Haskins, Steve
Fort Worth
Fort Worth
TX
TX
76111
76137
817-759-0033
817-234-0600
Fort Worth
TX
76110
817-926-7401
Garriott, Robert
WilliamsRao.
GbarlesZaliid
Hetsel, Jeff
2721 Ellis Avenue
i g 0 8 Eastchasc Pkwv.
Fort Worth
TX
TX
76106
Fort Worth
'76,l2fl
817-624-0555
-817-860-2424
Garriott, Robert
Rogers- Frank
£j&JJt^£mures. Inc.
920 E Hwy 82
6105 Stewart Road
1037 Northwest Hwy
2936 Lavon Drive, Ste
300
4441 Bass Pro Drive,
Ste 100
1103 Rivery Blvd, Ste
270
1030 E. Hwy 377
Gamesviile
Galveston
Garland
Garland
TX
TX
TX
TX
76240
77551
75041
75040
940-665-5565
409-740-3300
972-613-8080
972-495-2424
Garriott, Robert
Eisermann, Tony
Rogers, Frank
Mitchell, Marvin
GGG PIZZA, LLC
Mucho Pizza, LLC
F & J Ventures, Inc.
The Canopus, Ltd.
Garland
TX
75043
972-226-2121
Rogers, Frank
F & J Ventures, Inc.
Georgetown
TX
78628
512-868-9296
Villarreal, Bob
Dreams FloaL Inc.
Granbury
TX
76048
817-579-6565
Boulware, Robert
Grapevine
TX
76051
817-421-9868
Patak, Jr., Bemard
Boulware Enterprises,
Inc.
Grapevine ZP, Inc.
Greenville
Gun Barrel
City
TX
TX
75402
75156
903-454-2166
903-887-2828
Akers, Aric
Donahoe, Jason
•
621
Phone ..^* , Contact
• i& * ' . .
- / . Tt^n 's.
2100 W. Northwest
Hwy, Ste 126
6506 Wesley Sfreet
1018 W Main St
DALO 1:1456QS?.H 1956371
079684.0103
- 16-
Alta Mesa Pizza
Enterprises, Inc.
Haskins Enterprises,
Inc.
Marietta Foods, L.P.
Haskins Enterprises
III, Inc.
GSG PIZZA, LLC
ERUMZ INC
Sth & Cantey Pizza
Enterprises, Inc.
CCKG Pizza, L.L.C.
AAA Pizza, Inc.
Donahoe Pizza
Enterprises, L.L.C.
1^
79
43
46
62
80
97
a|y .
2025 W. Lmcoh Sfreet
6182 Highway 6 North
6858 Hwy 6 South
10922 FM 1960 West
11227 Fuqua Road
4515 FM 1960 W.,
Unit A-16/A-17
469 Uvalde
5901 Bellaire Blvd
4400 N. Freeway, Ste
300-A
811 South 75th250,
Gulfpate f;enter Mal^
8366 Westheimer
, State:
Zip :
Phone'
Contact;"^
Company Name
MH-Harlmgen, Inc.
Mucho Pizza, LLC
Mucho Pizza, LLC
Mucho Pizza, LLC
Mucho Pizza, LLC
PIZZA PARTNERS
IV, LTD.
Mucho Pizza, LLC
Mucho Pizza, LLC
Mucho Pizza, LLC
Harlingen
Houston
Houston
Houston
Houston
Houston
TX
TX
TX
TX
TX
TX
78552
77084
77083
77070
77089
77069
956-425-4097
281-856-0299
281-568-2424
281-955-0399
713-947-2646
281-587-0299
Haynes, Mike
Eisermann, Tony
Eisermann, Tony
Eisermann, Tony
Eisermann, Tony
Zom, Jay
Houston
Houston
Houston
TX
TX
TX
77015
77081
77022
713-450-4400
713-667-9700
713-691-2444
Eisermann, Tony
Eisermann, Tony
Eisermann, Tony
Houston
TX
713-923-7707
Eisermann, Tony
•
Houston
Houston
TX
TX
Mucho Pizza, LLC
Mucho Pizza, LLC
TX
TX
713-789-0004
281-8768470809^424
713-690-2229
281-405-8047
Eisermann, Tony
Eisermann, Tony
Houston
Houston
77023
77087
77063
77060
77037
77040
77086
•<
Eisermann, Tony
Eisermann, Tony
Mucho Pizza, LLC
Mucho Pizza, LLC
Houston
Houston
TX
TX
77031
77070
281-498-2525
281-257-1650
Eisermaim, Tony
Zom, Jay
605
Houston
TX
77029
713-455-8845
Eisermann, Tony
Mucho Pizza, LLC
JCATZ Pizza
Company 11, LLC
Mucho Pizza, LLC
Houston
Houston
Houston
TX
TX
TX
77090
77035
77036
281-397-8577
713-721-0017
713-771-1174
Eisermann, Tony
Eisermann, Tony
Rehman, Amer
Mucho Pizza, LLC
Mucho Pizza, LLC
AURR LLC
Eisermann^Tonv.
Miirho Pizzii. 1,LC = >
Eisermann. Tonv
Eisermann, Tony
Pasher, Bill
Muilii) Pizza. L L C .
Mucho Pizza, LLC
t UU
281-227-8111
281-446-4442
817-285-0123
972-570-4226
Davis, Jesse
Davis Al Dente, Inc.
Donahoe Pizza
Enterprises, L.L.C.
English Experiments,
Inc.
J.M. Sanchez, L.L.P.
KBC Venttires, L.P.
121
126
133
61
347
58
363
441
449
597
616
678
835
Sl^OSlTKfT^ewav
7441 W. Tidwell
12430 Tomball Pkwy,
SteH
11803 Wilcrest Dr
22513 Tomball
Parkway, Ste 117
11410 1-10 East, Suite
150
U l FM 1960 West
10601 S. Post Oak
8000 S Gessner, Ste
100
' Hoii.ston ."
•173
142
:2
38
329
56
432
724
767
394
34
107
91
82
626
S.tiLA''- "
II741-A Kastex Krwv
19705 Hwy 59 North
' ' T l Sirnnrt Frn-i'fil'^n
/ r*7 / \ i i i j v i I r 1 " T j ^ ^ a l t a
Houston
Humble
Hurst
77039
TX
TX
77338
Irving
TX
76054
75062
Irving
TX
75060
972-313-7726
Donahoe, Jason
811 S. Mason Road, Ste
155
3154 Fry Road, Ste A
1251 Pin Oak Rd, Ste
101
212 FM 518
1304 Junction Hwy, Ste
200
832 S. Fort Hood
Katy
TX
77450
281-492-2227
English, Ken
Katy
Katy
TX
TX
77449
77494
281-579-1223
281-693-7992
Sanchez, Joe
Cooper, Kevin
Kemah
Kerrville
TX
TX
77565 281-538-2424
78028 830-895-1339
Bilbrey, Shane
Scowden, James
Killeen
TX
76541
254-520-2424
Villarreal, Bob
1345 Kingwood Drive
120 Highway 332 West,
Ste A-2
6342-A Lake Worth
Blvd
3250 West Pleasant
Run
Kingwood
Lake Jackson
TX
TX
77339
77566
281-359-7776
979-299-6969
Eisermarm, Tony
Eisermann, Tony
Lake Worth
TX
76135
817-238-8878
Haskins, Steve
Lancaster
TX
75146
972-274-0555
Roland, Rusty
Precinct Line Road
3435 North Beltline,
Suite 114
2304 W. Shady Grove
DALO 1:1156057.11I95637.I
079684.0103
- 17-
Mucho Pizza, LLC
r H ^ i ' H i r w lyi
Kemah Pizza, LLC
Willow Lake Ventures,
Ltd.
L. R. Villan-eal
Enterprises, Inc
Mucho Pizza, LLC
Mucho Pizza, LLC
Haskins Enterprises 11,
Inc.
3RK Enterprises, LLC
^8S
219
• ^
City V . l . „ , ^ State- -Zip's'•i.'
^\\^iy y %
Laredo
TX
78045
PJione
Contact,
Company Name.
956-712-8646
Marlin, Tommy
Borderline, Inc.
Laredo
TX
78046
956-796-1625
Marlin, Tommy
Zapata Pizza, Inc.
League City
TX
77573
281-337-2424
Bilbrey, Shane
Lewisville
TX
75067
972-221-5187
Burke, John
League City Pizza,
LLC
TDGMP, Inc.
Livingston
Longview
TX
TX
77351
75605
936-327-7440
903-236-6804
Eisermann, Tony
Westbrook, Bob
484
77
7305 SanDario
Avenue
2316 S Zapata Hwy, Ste
130
2980 S Gulf Frwy, Ste
A
724 West Main Sfreet,
Ste 400
1287 W. Church Street
2503 Judson Road
1
5102 60th Sfreet, SteE
Lubbock
TX
79414
806-788-1010
09
2821 50th Sfreet
Lubbock
TX
79413
806-785-8888
MgPftftielMcGuff Lrfibbeck-Enter-prisesifl, JebftJerrv
3053 S. John Redditt
Drive
6519 FM 1488, Suite
509
960 N. Walnut Creek,
Ste 108
900 East End Blvd
North, Ste 900A
601 N. Trenton Rd.,
Ste. E
320 N. Central
Expressway
1200 E Davis, Ste 122
Lufkin
TX
75904
936-634-2424
Eisermann, Tony
Mucho Pizza, LLC
Magnolia
TX
77354
281-259-4776
English, Kirk
Slice of Life Too, Inc.
Mansfield
TX
76063
817-473-8880
Haskins, Steve
Marshall
TX
75670
903-935-7788
Wagner, Jeff
McAllen
TX
78504
956-664-2299
Haynes, Mike
McKinney
TX
75070
972-540-2442
Adkins, Jim
Haskins Enterprises,
Inc.
ML PlonsontMarshall
Pizza, Inc.
M.D. Haynes Of South
Texas, Inc.
Aspen Foods, L.P.
Mesquite
TX
75149
972-216-0099
Tolleson, Mike
Midland
Mount
Pleasant
Nacogdoches
TX
TX
79701
75455
432-685-3020
903-572-1414
Lievens, John
Wagner, Jeff
TX
75965
936-560-3000
Esquibel, Steve
New Braunfels
TX
78130
830-629-2424
Goodwin, Troy
Hetsel, Jeff
650
775
15
59
851
412
^36
39
143
4
709
^19
Mucho Pizza, LLC
WR Ventures
Longview, Inc.
M^BftftielMcGuff Fairfax EnteFpr4sesr
ifl, JehftJerrv
Tolleson Enterprises,
Inc.
Cheridan LLC
130
2106 Rankin Hwy
666 S Jefferson Blvd,
17A
3801 North Sfreet, Ste.
19
121 IH-35, Ste22A
25
5300 Rufe Snow
North
Richland Hills
TX
76180
817-485-4647
703
2018 Crockett Rd
Palestine
TX
75801
903-723-9992
310
3955 Lamar Ave., Ste 5
Paris
TX
75462
903-785-4445
37
3421 Spencer Hwy, Ste
A
1240 South Shaver
7438 Spencer Hwy, Ste
A
Pasadena
TX
77504
713-941-3333
Pasadena
Pasadena
TX
TX
77506
77505
713-472-2424
281-930-8400
Eisermann, Tony
White, Mike
Mucho Pizza, LLC
M&M-Resta u rn n t
GroupMucho Pizza,
Pearland
TX
77581
281-482-0784
Eisermann, Tony
Mucho Pizza, LLC
Pearland
TX
77584
713-436-1115
Rehman, Amer
AURR LLC
95
MM
45
99
548
761
1635 Broadway, Ste
101
9603 Broadway, Ste
DALO 1:1156057.11I9S637.I
079684.0103
- 18-
TV^Qrglifllll^^f
flA'AG'int
Pizza, Inc.
Estevan Investments,
LLC
Wingood, Inc.
Rufe Snow Pizza
Enterprises, Inc.
^I^gve^i!lolin^J|fS
Esquibel, Steve
Estevan Investments,
LLC
Akers, Aric
CGA Pizza Enterprises
LLC.
Armetta, Pat
Barwel, Inc.
City:
108
23741 Hwy 59 North
635 West Campbell
Road, Ste 300
479 E. IH 30
5145 Avenue H
1601 S1H35, Ste350
3520 Lakeview Pkwy.
1453 N Saginaw Blvd,
Ste 147
4415 Sunset Drive
-i. State
Zip'
- I'hone r
Contact
Company- Name
Porter
Richardson
TX
77365
75080
281-354-3901
972-437-3482
Eisermann, Tony
Zier, Harlan
Mucho Pizza, LLC
HMZ, Inc.
Rockwall
Rosenberg
Round Rock
Rowlett
Saginaw
TX
TX
TX
TX
TX
75087 972-771-4400
77471 281-239-8800
78664 512-388-7844
75088 972-463-4444
76179 817-232-0909
Rogers, Frank
Eisermann, Tony
Goodwin, Troy
Rogers, Frank
Haskins, Steve
San Angelo
TX
76901
325-947-8040
Marlin, Tommy
San Antonio
San Antonio
TX
TX
78238
78216
210-520-0299
210-821-1135
Marlin, Tommy
SpeedWicker.
San Antonio
TX
78254
210-688-2370
Marlin, Tommy
F & J Ventures, Inc.
Mucho Pizza, LLC
Wingood, Inc.
F & J Ventures, Inc.
Haskins Enterprises II,
Inc.
UNTOUCHABLES,
Inc
Fifty-Four, Inc.
Team SpeedTLT
^nldinf^s. LLC
BCM Group, Inc.
San Antonio
TX
78220
210-648-0300
12822 IH 10 West,
San Antonio
Bldg 2 Ste 201
45
1455 Austin Hwy, Ste
San Antonio
110
842 2335 S. W. Military Dr
San Antonio
"307;
^.awn^^Vay^.
TX
78249
210-558-1006
SpeedWicker.
g^^£r£d
Marlin, Tommy
TX
78209
210-930-6666
TX
78224
389
94
193
102
181
736
124
54
75
411
21
7084 Bandera Road
6900 San Pedro, Ste
155
6511 WLoop 1604 N,
Suite 107
2002 S.E. Loop 410
561
T f n m SnrrrlTl T
Hnldinps, LLC
Dezavala Pizza, Inc.
ElofesWicker.
JamesEred
210-932-9189 Marlin, Tommy
542^805-0700^^
TLT Holdings LLC
South Park Pizza, Inc.
:-W4ngood r l no.-f,^!^^
:str5i7.^488 S Highway 123
Bypass
8327 Agora Pkwy, Ste
115
Seguin
TX
78155
830-386-0678
ConcencionWick
TLT Holdings LLC
Selma
TX
78154
210-658-6100
SpeedWicker.
BradFred
B. Speed
1900 North Grand, Ste
106
2001 W. Southlake
Blvd, Ste 103
315 Sawdust Road
Sherman
TX
75090
903-870-0222
Roland, Rusty
Holdings. tefeLLC
3RK Enterprises, LLC
Southlake
TX
76092
817-251-8730
Zier, Harlan
Southlake ZP, Inc.
Spring
TX
77380
281-292-2424
18416 Kuykendahl
2900 W Washington,
Ste 135
4127 Highway 6
Spring
Stephenville
TX
TX
77379
76401
281-350-0011
254-968-3600
EnplishElserman
fl, KirkXami
Eisermann, Tony
Choate, III, Milo
Slice Of LifcMucho
Pizza, iHfeLLC
Mucho Pizza, LLC
CCE Enterprises, LLC
Sugar Land
TX
77478
281-265-0099
OrozcoJp^^hRevesAref
235
392
1617 Azalea Drive
1896 W. Moore
Temple
Terrell
TX
TX
76502
75160
254-771-2424
972-551-2222
Mason, Reggie
Brown, Garrett
M99
2535 Richmond Rd
Texarkana
TX
75503
903-223-9000
57
780
3506 Pahner Hwy
3805 Main Sfreet, Ste
108
Texas City
The Colony
TX
TX
77590
75056
409-945-2021
214-469-1770
WelehJi^sto
VlfteefttFref^
Eisermann, Tony
Faith, Chris
Success One
Investment Group, Inc.
DTS Enterprises, Inc.
GBrown DoughMaker,
Inc.
iTLT
Holdings. L J ^ ^ L C
Mucho Pizza, LLC
Cantel Investments,
LLC
TX
77375
281-255-4244
TX
75701
903-533-9494
•53
•03
36
154
87
663
mwmsmM).
55
28145A Tomball Pkwy
vyoqdlan'ds. ••
Tomball
140
1938 E Southeast Loop
Tyler
DAL01:44560S7JU25fiaLi
079684.0103
- 19-
Englisli^iifefmij^n
ii.KH4a:flflY
Westbrook, Bob
Slice Of LifeMnyhP
^izza. IftfeLLC
W R Ventures, Inc.
:St'ate .Zip.»>; .Phone {.
i^-.
486
40
67
295
|58 ,
281
69
701
323
211 N Northwest Loop
323
1609 N. Valley Mills
Drive
1440 N. Hwy 77, Ste 7
325 Adams Drive, Suite
#355
20710 (MLEtoim*.
Ste 30 "
1901 West Expressway
83, Suite 700
2710 Southwest
Parkway
2014 N HIGHWAY 78,
Ste 100
GbntiU'i
"•lyz^y]' ^^ y"X.
.
773
517
473
545
7666 Richmond Hwy,
Suite 20
10180 Lakeridge
Parkway, Suite #114
14392 Chanfilly
Crossing Lane
240 Zan Road
^Companv Nanif
V
•. ,, ' *
Tyler
TX
75702
903-526-9494
Westbrook, Bob
W R Ventures, Inc.
Waco
TX
76710
254-776-7762
Becknauld, Rick
Waxahachie
Weatherford
TX
TX
75165
76086
972-937-1222
817-341-8300
Bentley, Damon
Choate, III, Milo
Becknauld Enterprises,
Inc.
DND Enterprises, Inc.
MCKM Venttires, LLC
Webster
TX.
Weslaco
TX
78596
956-447-2266
Haynes, Mike
MH-Weslaco, Inc.
Wichita Falls
TX
76308
940-691-6060
Pasher, Bill
Pascal, Inc.
Wylie
TX
75098
972-461-9700
Mitchell, Marvin
The Canopus, Ltd.
Alexandria
VA
22306
703-718-8880
Ashland
VA
23005
Chantilly
VA
Charlottesville
VA
"^-77598- ;832.932-.S22l'
.•;
:50
'A
1(114 Snnii: Urivc" S f f
^ A"-'-'.'"-- :
Pizza Partners, LLC
804-550-0671
tlalfflFawley.
EriehDianne
Ingraham, Ken
20151
703-961-9100
Everett, Brad
Mucho Pizza, LLC
22901
434-964-0001
Shuffield, Rob
Wl/PizzaCharlottesville No. 1,
Ltd.
VA^^'
V.P.R3, LLC
Chester
VA
677
12100 Bermuda
Crossroad Ln
200 Marshall Dr
23320;;
•
23831 804-796-7833
Christiansburg
VA
24073
540-381-0068
Westerhold, Bill
323
1072 Temple Ave.
VA
23834
804-524-0770
Williams, Jason
594
477
579
468 Trade Sfreet
3520 S. Jefferson St.
1859 Carl D Silver
Pkw7
2065 W. Mercury
Colonial
Heights
Danville
Falls Church
Fredericksburg
TEXEN INVESTORS
CHRISTIANSBURG,
LLC
RVPP, LLC
VA
VA
VA
24541
22041
22401
434-797-2792
703-845-4900
540-548-3977
Ingraham, Ken
Everett, Brad
Brown, Doug
V.P.P.2, LLC
Mucho Pizza, LLC
AZZIP, LLC
Hampton
VA
23666
757-825-2644
i n f i l l ,11 ffcn A f f i c
384
•f04
~ l > H l l l H H l V i.*UVtU • . s-i'W
...
.
—
'.
- r-
Bosek, Rory
, I V I ^ T P A 1 .1 JLiCjr I . C J I J I
^LJLG^^^l'^^^J^^
WESTNEL, LLC
^83
2035-91 E Market St
Harrisonburg
VA
22801
540-432-9099
David
Shuffield, Rob
769
500 Fort Evans Rd,
Unit lA
3700 Candlers
Mountain Rd, Ste 4B
10338 Festival Lane
Leesburg
VA
20176
703-443-8071
Miller, Paul
Lynchburg
VA
24502
434-845-5339
Bosek, Rory
Manassas
VA
20109
571-292-9019
Brown, Doug
M.A. HAMPTON,
LLC
RTS Enterprises^ #1.
Inc.
Leesburg Pizza Buffet,
LLC
Texen Investors Lynchburg, LLC
VirTx 11, LLC
7500 Jackson Arch Rd.,
Ste A
4900 Commonwealth
Center Pkwy
15408 WC Commons
Way
Mechanicsville
VA
23111
804-730-2424
Williams, Jason
RVPP, LLC
Midlothian
VA
23112
804-763-4764
Ingraham, Ken
Midlothian
VA
23113
804-794-4445
Williams, Jason
Virginia Pizza
Partners, LLC
RVPP, LLC
371
852
+
507
385
818
DALOl :4456Q57^119S637.1
079684.0103
-20-
}52
251
532
746
302
504
367
479
p9
443
506
857
489
452
560
^ Z i p l p iPKonl'^:-^'4f.c
i
5900 E. Virginia Beach Norfolk
Blvd, Ste 65A
7516 West Broad Sfreet Richmond
4360 S. Laburnum Ave Richmond
Richmond
11549 Busy St
2037 Colonial Ave
Roanoke
1413 Towne Square
Roanoke
Blvd
50 Dunn Drive, Suite
Stafford
123
850 Statler Blvd
Staunton
2720 N. Mall Dr., Unit
Virginia Beach
192
3044 RichraoudrRoad.. Williamshiiri' .
Suite 101
2059 S. Pleasant Valley Winchester
Rd, Unit 8
13600 Foulger Square,
Woodbridge
BldgF
^WISCONSIN;!- :,
2905-2929 S. 108th St
West Alhs
< -.
^yVESTCVIRfGlNlA.' . ... . . .
8 Mall Road, Unit 910
Barboursville
VA
DALOl-.Um
079684.0103
Morgantown
757-461-7022
T l Q t l t l f v r t A r f IC
VA
VA
VA
VA
23294
23231
23236
24015
804-755-7555
804-726-9464
804-379-2424
540-344-7711
David
Williams, Jason
Williams, Jason
Williams, Jason
Westerhold, Bill
VA
24012
540-563-8181
Westerhold, Bill
VA
22554
540-659-3434
Brown, Doug
VA
VA
24401
23452
540-885-4646
757-463-6700
Shuffield, Rob
yA
23185
757-253-2279
.Company Name. MA JANAF, LLC
RVPP, LLC
RVPP, LLC
RVPP, LLC
Texen Investors
Roanoke One, LLC
Texen Investors
Roanoke Two, LLC
6B's, L.L.C.
David
j2g_an, j ji^y • „
RTS Enterprises, Inc.
MA LYNNHAVEN,
LLC
- •V.P.P.4. LLC
.
H f i n n ^ n A r viG
mJ U 1 1 1 I T J 1 1 i \ J 1 I J .
'i,
VA
22601
540-535-0002
Shuffield, Rob
RTS Enterprises, Inc.
VA
22192
703-580-9383
Brown, Doug
Virtx 1,LLC
414-543-0505
C
' '
304-736-8399
Tate, Paul
Rally Pizza, LLC
.f-
o
WI
-
•
''%...
53227
i
T
-
'
'1
-
WV
25504
WV
26501
4002-N^Eisenho wer-l>r.. Jtecklev;
4081 University Town
Cenfre Dr
23502
^^pact^
0S^$y
H19S637.1
-21 -
304-599-8399
- ^ , ., ^. ., •
MLM Management,
LLC
WHsoorMarUyfl
iiafiemeiit
Wilson, Mark
Impellicceiri, Walt
^mm^:^^. ^^!:'^
M and W, LLC
EXHIBIT D-1
LIST OF FRANCHISED CICI'S TO GO UNITS
DALO I :n56Q54.91194789.3
079684.0103
EXHIBIT D-1
LIST OF FRANCHISED
CICI'S TO GO UNITS
As of December
26y^m%2^jmi
Stor
e#
?01
4
701
3
?01
.Address.
,City •
CALIFORNIA
1050 W. Rosecrans Ave Gardena
•'Phonc#;,
State, Zip
CA
GEORGIA
5435 Woodrirff-FuwBGolifHibiiS'
Rd, Sle C -too
OKLt\TlOMA
2630 S.W. 29th
Oklahoma
OK
City
TEXAS
2596 Arkansas Lane,
Arlington
TX
Ste 148
90247
310-532-2229
34907
Contact-
Company Nainc^.
44hftftKetanl.
MohammadS
Grace Food Services
706-562-8885 , Motiijeh,M^tsen
|iars,-LIX^-
73119
405-604-0123
McCann,
Kelly
KGM Ventures, Inc.
76014
817-548-8899
GttiSersment
M4GINTERNA'
, MikeJoe
^Milser
P&L DePugh Enterprises
Inc.
MICINTERNATIONALMilser
Management Group.
700
8
?01
604 W.7th Ave
Corsicana
TX
75110
903-874-0022
DePugh, Paul
3420 W Illinois Ave,
Ste 500
Dallas
TX
75211
214-467-3800
GwlSerement
, M4keJoe
700
3
700
100 East Broad Sfreet,
Suite 110
443 B S. Broadway
Forney
TX
75126
972-552-2979
Joshua
TX
76058
817-774-3400
701
6
2700 E Eldorado Pkwy,
Ste 407
Little Elm
TX
75068
469-362-4449
Donahoe Pizza Enterprises,
Donahoe,
L.L.C.
Jason
Shekonfijibifl, Quftlity-Pizzn - Par-faters-ofT<^OPP-.1nshua LLC
MarkOim
Ali, Samina
J & S Pizza Inc.
EXHIBIT E
LIST OF CICI'S PIZZA RESTAURANT FRANCHISEES WHO HAVE LEFT THE
SYSTEM IN THE LAST FISCAL YEAR ENDING DECEMBER 26^4^0^
DALO 1:1156QS4.91I94789.3
079684.0103
EXHIBIT E
LIST OF CICI'S PIZZA RESTAURANT FRANCHISEES WHO HAVE LEFT THE
SYSTEM IN THE LAST FISCAL YEAR ENDING DECEMBER 2^-204025. 2011
I f vou buv this franchise, vour contact information mav be disclosed to other buvers
ranchise svstem.
*These Franchisees closed or transferred stores but remain in the system because they own
another store or stores.
Gontacl
?jip
Plionef/ : . . • '
'Cltyi . •
, ,1'I'M....•>„..;:.., •;
AI^JAMA '
•
. - '
"
- r
Kir4t-IIess~
A4:>\
* W t W O v. . , 351 341-0880
'
T q i 070
,Kcn Hoss^^ >
' Foley y > . ^ ' > \ , ^ - A L - '
.ARKANSAS;
r'^
^ y
,I)ftii-Nirtio«s^
'7
R6gers'''^1^''^."\ "
479-636-1500
A R ^ " / 72756
G0L0RA4)0
• ^
- -r
Qmnfl-Newhall*
- "-^ •
Ft. Collins^
970-484-4443
GO '
DELAAVARE
'
James Moody ' "
: ^ : Newark
v -©E*
49744-^^ 303 731 0795 i;.-.
. FLORIDA v^.. - •'• •- • y y.
:FL'.'- , 3461.3 Cl ,352
Christopfier:Morgan . •! /
Brooksville , -i •
' 476 5003 .
.:Dean Grogorv*^ ^ -.'i'. • ".'':'^Jacksonville"
32225{.i^^ ^904 333 0365£vj
33403/^ ':561 933 0610^ t ^
;:PatifiaiLivingstone
y'y^.-^
, Jo's'evCrtizi^v,t^' "-'--^y'-^^'^.^^i* Or-fnend4tefteh . . ? : FL
32474:-^, 386 671 1074 y t
•ToMrAhsari*
--.-^A^Panama City Beoch ,
FL
850-249-4244; ' '
r
Pcniihitt
Citv
Bcuch
FL
'
23407-;C
Tahiti Ansai-i^:? ^
' ^'tf
-850 349 8363 • ' ;
•FL
33567^: ,813 659 3400:: >A
Vanessa Dnllmtin'^ '
/^.i-B iPlHflt-Grtv
'Andy Suit/. ' .'q'
t
Port SHint-Lucie'.v . ^ ,^' •FL • ^ 34952
773 398 1707 '^y
' To ll i r A nsH r4^''
^ 'f' -•'?...•
ReddiiigtfHi-Stiores, • Tv. FL
33708 -737 329 S63i y _
i'Deftfl-Gr-egor-y* ./ , ;
,
FL*^, ^ 32304Bob~Becknei4' <
¥L
r 33880
WinterrGftr-den'
941 445 3631 t'^
GFOHGIA '•
770 7iin um %• \,
Scooter Aselton
GA
. 30004
'.Lv«n-W«lls '
•
' ' Augusta • • "
f
.GA-.^ " 30906 ~ 706 771 0160 - i " ^
Austell
«
LGAlf 1, 30106 -770 745 9779 '^C
Carrollton
-""^.^ '
Keith'Jiles - \
u
GA " 30447 v, ^770 834'8887.
"Kent-Rogers^"
^Goluinbus..
'
'334'663 0335-^ •'
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"Kent Roger!.*
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tColuwbus" '
GA'St*:. -31904fi7S S-^q 7Q't<i^ 5.
Stuart Wiggins
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GA^^I^ ^30 1.
.Erunk-Merkel i '
Mar4«iez( ,1
GA^«-Sf 30907 . 706.771 OTeoA^il
''Wnith' lilf! •••• ' •
Newoani
B
GA .iT. '30265 ^678'433.787Od0'
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1
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"-^ '-^^^v^^.. ^yiSnellvillei ^^^•^'r'" . .GA J
g77Q'736\7777;if^g
Mart? Racke* ^-H^.. >'^f^"^^ Tiftoft • " ^ . - ^ ^ ^ i ^ r t ^ G A
34793 ' 229^556-9873^^"INDIANA '-•>V-''^^S&^^^
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75234 ' 214 739 0600 -'m
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ft
• ?14 710 1)600 ^"^"^^
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^'
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Indianapolis' ' <IN
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Iiidianapoli!>
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214-739 0600 f::4^
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244-739-0600,^ 1
Ifldtanupolis
75334:fNoFma»-AVi»ten'
314 739 0600 ^ i '^
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• Joincs Liindeman^ '
.
tNo'rmanTWinton
^„ KENTUCKY - .Norm an-Winton - "
|Jim-McGrtt n a ha i i ^
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>
^JohnMcGlure . '
^MARYLAND
^
^Normon Winton .
"\ '
^Norman Whiton
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i'Nbriridn Winton
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MICHiCAN
:Jas6n;Wr4ght
"Brandon" Tosto i
f
•
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,
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DaftrNations'
Paul Kolander* ' ,
Kokomo
'
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'46902'- -765-457-9000
7^34-'-^ ''244 739 0600
IN.v:-
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,40324 ^ S02-86-3-4tiO5
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LA
,
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225-204-0644
70808 ^
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314 739 0600 "f
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079684.0103
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39206' \ i /803-462-4033lab^
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, City'
y '-^u
'^Normal) AVinton
Columbia'^
• v
SG
Nor-man4V4tttoii :i'
SG '
Stephen Gnreia^:
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SG
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SG .
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Columbia - . ' - > ' " -. - >TN
•
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Nashville' ^
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A1V4H
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rx
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TX
iNdrBan Winton
Atflscoeita
?
TX
l^lb Biiontclio
Austin
4-X
.'^Nor-iiwH^yinton <
Baytown V.?.'' .^iv • •••• •
rx
%drrhan Wihton . GoHFoe
•
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i^Normari Winton
Dallas ^
TX
Quinn Newhall^
'
, Flower Mound ,
T-X
•Norman Winton
, •
Galveston
• i
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'^l-.. Gun-Barr-el-Gitv •'
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;\
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TX
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Houston
TX
iNorman Winton
Houston
TX
jNorman Winton
Houston
T-X
^Norman Winton Houston - .'T *'
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Houston'
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i
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^ ; ' Houston
,
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Houston g '
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:Nb^rman-Winton •
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j^Nofman"''Winton TX ^'Ndrman Winton '
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^
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i TX.
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Lufltin f^r ^ .'
', TX •
^Will Herring. > ' • "
TX
Mi
Plf^flctfint
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ifJohn Carlew* '
Pasadena
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Pasadeno
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iNornioii Winton
Pearland '
^~
TX
iNbrmdri Winton
'
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;. •' i
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DALO 1 1156054.91194789.3
079684.0103
EXHIBIT E-1
LIST OF CICrS TO GO UNIT FRANCHISEES WHO HAVE LEFT THE
SYSTEM IN THE LAST FISCAL YEAR ENDING DECEMBER 26^40402LJM1
DATJil:1194789.3
EXHIBIT E-1
LIST OF CICrS TO GO UNIT FRANCHISEES WHO HAVE LEFT THE
SYSTEM IN THE LAST FISCAL YEAR ENDING DECEMBER Ur^mOZLMH
I f vou buv this franchise, vour contact information mav be disclosed to other
buyers when vou leave the franchise sv.stem.
*These Franchisees closed or transferred stores but remain in the system because they own
another store or stores.
City .
Contact ,
V*-''
GEORGIA*
t-'.
Lewis-4teddiekt7Jr^ SSHli'i'^;'J? ;,Gones*':-P'*rk'^ *j:;.;rS;'-->^;.:
Ken t-Royer^ Mosen
Columbus
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Adinfiton
Dallas
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George Brown ' v v \ -'4
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State
GA
Zip '* •»
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706-562-8885
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EXHIBIT F
WORK EVALUATION AGREEMENT
DAIJ)1:I194789.3
WORK EVALUATION AGREEMENT
20
This Work Evaluation Agreement ("Agreement") is made this
day of
, between CiCi Enterprises, LP, a Delaware limited partnership ("CiCi's"), and those persons
identified on the signature page to this Agreement (individually and collectively, "Applicant").
RECITALS
Applicant has submitted an application to purchase a franchise for a CiCi's Pizza Restaurant.
CiCi's has completed its preliminary review of the franchise application and has invited the
individual who will oversee the operation of the franchised business ("Operator") to participate in a two
(2) consecutive day work evaluation program in a company-owned CiCi's Pizza Restaurant, without
compensation, to better determine the parties' mutual interest in proceeding with the pending franchise
application.
If applicable, CiCi's has also invited certain persons investing in the franchise ("Invcstor(s)") to
participate in the work evaluation program as well.
Operator and, if applicable, the Investor(s) wish to participate in CiCi's work evaluation program.
THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1.
Acknowledgments. Applicant agrees that:
a.
Participation in CiCi's work evaluation program is a part of the screening phase
of CiCi's franchise application process. Participants will not be paid or otherwise compensated for, and
will receive no benefits in connection with, his or her work in a company-owned CiCi's Pizza Restaurant
under CiCi's work evaluation program, other than consideration of Company for the grant of a CiCi's
Pizza franchise. Applicant is responsible for the cost of each participant's travel and living arrangements,
and all other expenses he or she incurs while participating in the work evaluation program. No participant
will become an employee or agent of CiCi's as a consequence of his or her participation in CiCi's work
evaluation program.
b. ,
CiCi's work evaluation program is only one aspect of CiCi's franchise
application process. Even if Applicant successfully completes CiCi's work evaluation program,
Applicant acknowledges that Applicant is not automatically entitled to enter the qualilying phase of
CiCi's franchise application process nor is Applicant automatically entitled to be granted a franchise for a
CiCi's Pizza Restaurant.
c.
CiCi's has made and makes no representations, warranties or guaranties that
Applicant will be advanced to the qualifying phase of CiCi's franchise application process or that
Applicant will be granted a CiCi's Pizza franchise upon completion of the franchise application process.
Neither CiCi's nor Applicant is obligated to enter into a franchise relationship following completion of
the application process.
DAL01:1195453.1
079684.0103
2.
Confidentiality Agreement. In connection with CiCi's work evaluation program, CiCi's
will permit Applicant to have access to certain confidential and proprietary information, know-how and
documents related to a CiCi's Pizza franchise (including, without limitation, CiCi's Operating Manuals
containing CiCi's policies, methods and procedures for the operation of CiCi's Pizza Restaurants)
("Confidential Information"). Applicant acknowledges that such Confidential Information affords CiCi's
and its franchisees a competitive advantage and that any disclosure or unauthorized use thereof will
constitute irreparable loss and harm to CiCi's. In order to protect the goodwill of the CiCi's System and
the confidentiality and value of the Confidential Infonnation, Applicant agrees as follows:
a.
Applicant will receive and at all times maintain the Confidential Information in
confidence and shall use the Confidential Information only in the performance of the activities
contemplated by this Agreement and in connection with its evaluation of the franchise. Applicant will
not, directly or indirectly, use the Confidential Information for Applicant's own benefit and wili not
disclose the Confidential Information, except (i) as may be required by law, or (ii) to outside counsel,
accountants, and other representatives or afflliates of Applicant who need to know such information for
the purpose of investigating the franchise. In the event Applicant or any persons to whom Applicant
discloses the Confidential Information become legally compelled (by deposition, interrogatory, request
for documents, subpoena, civil investigative demand or similar process) to disclose any of the
Confidential Information, Applicant shall provide CiCi's with prompt prior written notice of such
requirement so that CiCi's may seek a protective order or other appropriate remedy and/or waive
compliance with the terms hereof In the event that such protective order or other remedy is not obtained,
or if CiCi's waives compliance with provisions hereof, Applicant agrees to furnish only that portion of the
Confidential Information which Applicant is advised by written opinion of counsel is legally required and
to exercise their best efforts to obtain reasonable assurances that such Confidential Information will be
accorded confidential treatment;
b.
Applicant will ensure that all outside counsel, accountants and other
representatives and afflliates of Applicant who are given access to the Confidential Information on behalf
of Applicant will be bound by, and will conduct their investigation in accordance with, the terms of this
Agreement. Applicant shall be fully responsible for any breach of this Agreement by any person to whom
access to the Confidential Information is given by Applicant or its representatives;
c.
Applicant shall not at any time make copies of any manuals or other documents
or compilations containing all or any part of the Confidential Information without CiCi's express written
permission and shall surrender any material containing all or any part of the Confidential Information to
CiCi's upon request, but in no event later than the conclusion of the work evaluation program
contemplated by this Agreement.
d.
Applicant shall not at any time, directly or indirectly, do or omit to do any act
that would or would likely be injurious or prejudicial to the confidentiality and value associated with the
Confidential Information and the goodwill associated with the CiCi's System.
e.
Applicant acknowledges that the Confidential Information is owned solely by
CiCi's and that this Agreement shall not grant Applicant any rights in or to the Confidential Information
except the limited right to use the Confidential Information to investigate the franchise and to perform
under the work evaluation program. Applicant further acknowledges that CiCi's is not making any
representation or warranty, express or implied, as to the accuracy or completeness of the Confidential
Information, and neither CiCi's nor any of its officers, directors, shareholders, employees, agents or
afflliates will have any liability to Applicant or any other person resulting from their use of Confidential
Information.
DAL0I:1195453.i
079684.0103
-2-
Applicant agrees that the obligations under this Paragraph 2. are necessary and reasonable in
order to protect CiCi's and expressly agrees that monetary damages would be inadequate to compensate
CiCi's for any breach of the covenants and agreements set forth herein. Applicant further agrees and
acknowledges that any such violation or threatened violation will cause irreparable injury to CiCi's.
Accordingly, Applicant agrees that, in addition to any other remedies that may be available at law, in
equity or otherwise, CiCi's shall be entitled to a temporary and/or permanent injunction and a decree for
specific performance against Applicant for the threatened breach of this Agreement or the continuation of
any such breach, without proof of actual damages and without being required to furnish a bond or
security.
3.
RELEASE; RISK ASSUMPTION; INDEMNITY.
a.
APPLICANT ACKNOWLEDGES THAT PARTICIPATION IN CICI'S
WORK EVALUATION PROGRAM W I L L EXPOSE APPLICANT TO CERTAIN POTENTIAL
RISKS INHERENT IN THE DAY-TO-DAY OPERATION OF A RESTAURANT BUSINESS.
ACCORDINGLY, APPLICANT FOR THEMSELVES AND ON BEHALF OF THEIR
RESPECTIVE SPOUSES, HEIRS, ASSIGNS, INSURERS, EXECUTORS, ADMINISTRATORS,
REPRESENTATIVES AND AGENTS HEREBY RELEASE AND FOREVER DISCHARGE
C I C r S AND C l C r S P R E D E C E S S O R S , SUCCESSORS, ASSIGNS, PARENTS, SUBSIDIARIES
AND AFFILIATES, PAST AND PRESENT, AND THEIR RESPECTIVE DIRECTORS,
OFFICERS, SHAREHOLDERS, EMPLOYEES, AGENTS, CONSULTANTS, INDEPENDENT
CONTRACTORS, INSURERS, ATTORNEYS, AND REPRESENTATIVES (COLLECTIVELY
REFERRED TO IN THIS PARAGRAPH 3 AS "CICI'S") OF AND FROM ANY AND A L L
MANNER OF CLAIMS, RIGHTS, ACTIONS, CAUSES OF ACTION, SUITS, OBLIGATIONS,
DEBTS, DEMANDS, DAMAGES (WHETHER ACTUAL, CONSEQUENTIAL, INDIRECT,
EXEMPLARY, OR OTHER), AGREEMENTS, PROMISES, LIABILITIES, CONTROVERSIES,
COSTS, INJURIES, EXPENSES, COMPENSATION,
LOSS OF SERVICES OR
COMPANIONSHIP, AND ATTORNEYS' FEES WHATSOEVER, ON ACCOUNT OF INJURY
TO THE PERSON OR PROPERTY, OR RESULTING IN THE DEATH, OF APPLICANT
(INCLUDING, WITHOUT LIMITATION, THOSE INJURIES CAUSED OR ALLEGEDLY
CAUSED BY THE ACTUAL OR ALLEGED NEGLIGENCE OF CICI'S) WHILE APPLICANT
IS CARRYING ON THE ACTIVITIES CONTEMPLATED BY THIS AGREEMENT,
WHETHER BASED ON ANY FEDERAL, STATE OR COMMON LAW RIGHT OF ACTION
SOUNDING IN CONTRACT, TORT (INTENTIONAL OR NEGLIGENT), OR STRICT
LIABILTTY AND WHETHER FORESEEN OR UNFORESEEN, MATURED OR UNMATURED,
KNOWN OR UNKNOWN, DERTVATIVE OR INDIVIDUAL, ACCRUED OR UNACCRUED.
b.
APPLICANT ASSUMES FULL RESPONSIBILITY FOR, AND A L L
RISKS OF, BODILY INJURY, DEATH OR PROPERTY DAMAGE WHILE WORKING IN THE
CAPACITY CONTEMPLATED BY THIS AGREEMENT WHETHER IN OR ON THE
PREMISES OF THE CICI'S PIZZA RESTAURANT OR OTHERWISE AND/OR WHETHER
OR NOT DUE TO THE ACTUAL OR ALLEGED NEGLIGENCE OF CICI'S OR OTHERS.
c.
APPLICANT AGREES TO INDEMNIFY AND HOLD CICI'S
HARMLESS FROM ANY LOSS, LIABILITY, DAMAGE OR COST CICI'S MAY INCUR
ARISING FROM ANY ACTS, ERRORS OR OMISSIONS OF APPLICANT WHILE ENGAGING
IN THE ACTIVITIES CONTEMPLATED BY THIS AGREEMENT, WITHOUT LIMITATION
AND WriHOUT REGARD TO THE CAUSE OR CAUSES THEREOF, PROVIDED, THAT THE
FOREGOING INDEMNITY SHALL NOT APPLY TO CLAIMS, LOSSES, LIABILITY,
DAMAGE OR COST (OR ANY PORTION THEREOF) THAT ARE CAUSED BY THE
NEGLIGENCE OR WILFUL MISCONDUCT OF CICI'S.
DAL01:n95453.1
079684.0103
-3 -
d.
APPLICANT HAS READ AND UNDERSTANDS THIS RELEASE AND IS
ENTERING INTO THIS RELEASE F R E E L Y AND VOLUNTARILY. ANY INDIVIDUAL
SIGNING THIS AGREEMENT IS AT LEAST 18 YEARS OLD AND IS COMPETENT TO
EXECUTE THIS RELEASE. THE TERMS OF THIS RELEASE ARE CONTRACTUAL AND
NOT A MERE RECITAL.
Initials of Applicant:
4.
Miscellaneous
a.
Applicant agrees to pay all expenses (including court costs and reasonable
attorneys' fees and costs) incurred by CiCi's in enforcing this Agreement.
b.
CiCi's failure to object, or take action with respect, to a breach of any provision
of this Agreement shall not operate or be construed as a waiver of or consent to that breach or any
subsequent breach.
c.
This Agreement shall be binding upon and inure to the benefit of the undersigned
parties, their successors and assigns; provided that Applicant's rights under this Agreement shall not be
assigned without the prior written consent of CiCi's.
d.
This Agreement constitutes the complete agreement between Applicant and
CiCi's concerning the subject matter hereof and supersedes all prior related agreements. This Agreement
may be amended only in writing executed by the parties hereto. Failure to enforce any provision of this
Agreement in one or more instances shall not constitute a waiver of any term hereof
e
THIS AGREEMENT SHALL BE INTERPRETED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS,
WITHOUT REFERENCE TO TEXAS CHOICE OF LAW PRINCIPLES.
f.
THE PARTIES AGREE TO SUBMIT ANY CLAIM, CONTROVERSY OR
DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT TO NON-BINDING
MEDIATION PRIOR TO BRINGING SUCH CLAIM, CONTROVERSY OR DISPUTE IN A
COURT OR BEFORE ANY OTHER TRIBUNAL.
THE MEDIATION SHALL BE
CONDUCTED THROUGH EITHER AN INDIVIDUAL MEDIATOR OR A MEDIATOR
APPOINTED BY A MEDIATION SERVICES ORGANIZATION OR BODY, EXPERIENCED IN
THE MEDIATION OF FOOD SERVICE BUSINESS DISPUTES, AGREED UPON BY THE
PARTIES AND, FAILING SUCH AGREEMENT WITHIN A REASONABLE PERIOD OF TIME
AFTER ANY PARTY HAS NOTIFIED THE OTHER OF ITS DESIRE TO SEEK MEDIATION
OF ANY CLAIM, CONTROVERSY OR DISPUTE (NOT TO EXCEED FIFTEEN (15) DAYS),
BY THE AMERICAN ARBITRATION ASSOCIATION IN ACCORDANCE WITH ITS RULES
GOVERNING MEDIATION, AT CICI'S CORPORATE HEADQUARTERS. THE COSTS AND
EXPENSES OF MEDIATION, INCLUDING COMPENSATION AND EXPENSES OF THE
MEDIATOR (AND EXCEPT FOR THE ATTORNEYS FEES INCURRED BY EITHER PARTY),
SHALL B E BORNE BY THE PARTIES EQUALLY. IF THE PARTIES ARE UNABLE TO
RESOLVE THE CLAIM, CONTROVERSY OR DISPUTE WITHIN NINETY (90) DAYS AFTER
DALOl: 1195453.1
079684.0103
-4 -
THE MEDUTOR HAS BEEN CHOSEN, THEN EITHER PARTY MAY BRING A LEGAL
PROCEEDING TO RESOLVE SUCH CLAIM, CONTROVERSY OR DISPUTE UNLESS SUCH
TIME PERIOD IS EXTENDED BY WRITTEN AGREEMENT OF THE PARTIES.
NOTWITHSTANDING THE FOREGOING, CICI'S MAY BRING AN ACTION FOR
INJUNCTIVE OR OTHER EXTRAORDINARY RELIEF IN ANY COURT HAVING
JURISDICTION WITHOUT FIRST SUBMITTING SUCH ACTION TO MEDIATION.
g.
WITH RESPECT TO ANY DISPUTE NOT RESOLVED BY MEDIATION,
APPLICANT HEREBY IRREVOCABLY SUBMITS THEMSELVES TO THE JURISDICTION
OF THE STATE AND FEDERAL DISTRICT COURTS LOCATED IN THE STATE, COUNTY
OR JUDICIAL DISTRICT IN WHICH CICI'S PRINCIPAL PLACE OF BUSINESS IS
LOCATED AND HEREBY WAIVE A L L QUESTIONS OF PERSONAL JURISDICTION FOR
THE PURPOSE OF CARRYING OUT THIS PROVISION. APPLICANT HEREBY AGREES
THAT SERVICE OF PROCESS MAY BE MADE UPON EACH OF THEM IN ANY
PROCEEDING RELATING TO OR ARISING OUT OF THIS AGREEMENT OR THE
RELATIONSHIP CREATED BY THIS AGREEMENT BY ANY MEANS ALLOWED BY TEXAS
OR FEDERAL LAW AND FURTHER AGREES THAT VENUE FOR ANY PROCEEDING
RELATING TO OR ARISING OUT OF THIS AGREEMENT SHALL BE THE COUNTY OR
JUDICLVL DISTRICT IN WHICH CICI'S PRINCIPAL PLACE OF BUSINESS IS LOCATED;
PROVIDED, HOWEVER, THAT CICI'S MAY BRING ANY ACTION FOR INJUNCTIVE OR
OTHER EXTRAORDINARY RELIEF IN ANY STATE OR FEDERAL DISTRICT COURT
WHICH HAS JURISDICTION.
h.
APPLICANT AND CICI'S ACKNOWLEDGE THAT THE EXECUTION
OF THIS AGREEMENT AND ACCEPTANCE OF THE TERMS BY THE PARTIES
OCCURRED IN COPPELL, TEXAS, AND FURTHER ACKNOWLEDGE THAT THE
PERFORMANCE OF CERTAIN OBLIGATIONS OF APPLICANT ARISING UNDER THIS
AGREEMENT, SHALL OCCUR IN COPPELL, TEXAS. APPLICANT AND CICI'S FURTHER
ACKNOWLEDGE THAT THEIR AGREEMENT REGARDING APPLICABLE STATE LAW
AND FORUM ABOVE PROVIDE EACH OF THE PARTIES WITH THE MUTUAL BENEFIT
OF UNIFORM INTERPRETATION OF THIS AGREEMENT AND ANY DISPUTE ARISING
OUT OF THIS AGREEMENT OR THE PARTIES' RELATIONSHIP CREATED BY THIS
AGREEMENT AND THE RECEIPT AND SUFFICIENCY OF MUTUAL CONSIDERATION
FOR SUCH BENEFIT.
DAL01:il95453.1
079684.0103
-5-
IN WITNESS WHEREOF, the undersigned have entered into this Agreement as of the day and
year first above written.
CICI'S:
CiCi Enterprises, LP,
a Delaware limited partnership
By: CiCi GP, LLC, its General Partner
By:
(Signature)
(Title)
APPLICANT(S):
(Signature of Operator)
(Printed name)
(Signature of Investor, if applicable)
(Printed Name)
(Signature of Investor, if applicable)
(Printed Name)
DALOl: 1195453.1
079684.0103
-6-
EXHIBIT G
POWERS OF ATTORNEY
(FOR LEASES, TELEPHONE, TAXES AND INTERNET)
EXHIBIT H
ASSIGNMENT OF LEASE
DALOl :-14S6054^11947S9.3
079684.0103
ASSIGNMENT OF LEASE
THIS ASSIGNMENT OF LEASE (the "Assignment") is executed and entered into as of the
Effective Date (as hereinafter defined), from
("Assignor") to
("Assignee"). The foregoing parties shall sometimes hereinafter be
referred to simply as a "Party" and collectively as the "Parties." In addition, the Parties acknowledge and
agree that
("Landlord") is executing this Assignment for purposes of
acknowledging the assignment granted herein and expressing its agreement to become bound by the terms
hereof (particularly Paragraphs 7, 8 and 9 below), and for such limited purposes shall be deemed to be a
"Party" hereto.
WIINESSETH
WHEREAS, Assignor, as "Tenant," entered into a certain lease agreement (the "Lease") with the
Landlord
relating
to
certain
premises
(the
"Leased
Premises")
situated
at
(the "
"), as more particularly
described therein. A true, complete and correct copy of the Lease, including a legal description of the
Leased Premises, is attached hereto as Exhibit "A" and made a part hereof for all purposes; and
WHEREAS, Assignor desires to assign to Assignee, and Assignee desires to assume, all of
Assignor's right, title and interest as "Tenant" under the Lease (including any renewal rights and options).
NOW, THEREFORE, in consideration of the mutual promises contained herein, the sum of
TEN AND NO/100 DOLLARS ($10.00), and other good and valuable considerations, the receipt and
sufficiency of which are hereby acknowledged by the Parties, the Parties hereby covenant, promise and
agree as follows:
I•
Assignment and Transfer. Assignor hereby sells, assigns, delivers, transfers and sets over unto
Assignee, and Assignee's successors and assigns, all of Assignor's right, title and interest as "Tenanf
under the Lease, together with any extensions or renewals thereof, TO HAVE AND TO HOLD the sariie
unto Assignee, and Assignee's successors or assigns.
2.
Representations and Warranties of Assignor. Assignor hereby represents and warrants that:
(a)
Assignor is the sole and absolute owner of the entire interest of "Tenant" in the Lease and
has the right, power and capacity to make this Assignment, and no person, firm, corporation or
entity other than Assignor has any right, title, interest or claim as "Tenant" in or to the Lease.
(b)
Assignor is not presently in default under the Lease, nor, to the best of Assignor's
knowledge, is Landlord in default thereunder. Assignor has not performed any act or executed
any instrument, which might prevent Assignee from operating under any of the terms and
provisions ofthe Lease or which would limit Assignee in such operation.
(c)
Assignor has delivered to Assignee, and attached hereto is, a true, complete and correct
copy of the Lease, together with any supplements, addenda, amendments and modifications
thereto.
(d)
The person executing this Assignment on behalf of Assignor is fully authorized to do so,
and this Assignment represents a binding agreement of Assignor, enforceable in accordance with
its terms.
DALOLl 195462.1
079684.0103
3.
Representations, Warranties and Covenants of Assignee.
warrants and covenants that:
Assignee hereby represents,
(a)
By its acceptance hereof, Assignee agrees, at Assignee's sole cost and expense, to
assume, perform and discharge all of the duties, obligations, covenants and undertakings of
"Tenant" under the Lease, to the extent required by the terms of the Lease, and to indemnify and
hold Assignor harmless from and against any and all losses, claims, damages, liabilities, costs and
expenses, including reasonable attomey's fees, arising out of or resulting from Assignee's breach
of such duties, obligations, covenants and undertakings under the Lease. In addition, Assignee
will use its best efforts to enforce or secure the performance of each and every duty, obligation,
covenant and undertaking of Landlord under the Lease, and will appear in and prosecute or
defend any action or proceeding arising under, or in any manner connected with, the Lease and/or
the duties, obligations, covenants and undertakings of Landlord thereunder.
(b)
The person executing this Assignment on behalf of Assignee is fully authorized to do so,
and this Assignment represents a binding agreement of Assignee, enforceable and in accordance
with its terms.
4.
No Waiver. The failure of Assignor to enforce any of the terms, covenants and conditions hereof
shall not be construed or deemed to be a waiver of any rights or remedies hereunder. Assignor shall have
the full rights, power and authority to enforce this Assignment and/or any of the terms, covenants or
conditions hereof, at any time or times that Assignor shall deem fit.
5.
Effectiveness. The assignment granted herein is intended to be absolute, unconditional and
effective simultaneously with the removal of the contingency set forth in Paragraph 9 below.
6.
Notices. All notices or other communications required or permitted to be given pursuant to this
Assignment shall be given in writing, sent by (a) personal or hand delivery, (b) overnight delivery service
with proof of delivery, or (c) United States mail, postage prepaid, registered or certified mail, return
receipt requested, addressed as follows:
If to Assignor:
^
Attn.:
If to Assignee:
Attn.:
or to such other address or to the attention of such other person as hereafter shall be designated by fifteen
(15) days prior notice in writing from the applicable party sent in accordance herewith. Any such notice
or communication shall be deemed to have been given (i) at the time of the actual delivery ofthe same to
the intended addressee or any party having actual or apparent authority (if being agreed that any party
accepting delivery at any of the addresses set forth above shall be deemed to have apparent authority
whether or not such parties are employed by the addressee) to accept delivery for such party, (i) sent by
mail, at noon (addressee's local time) or the next mail delivery day after the day the same was duly
deposited in the United States mail, or (iii) if sent by telecopy or fax, at the time of transmission of same
to the telecopy or fax number of such party. In the event any notice or communication is given in more
than one of the manners set forth above (for example, by personal delivery and by fax), such notice or
DAL01:I195462.1
079684.0103
-2-
communication shall, for purposes of notice hereunder, be deemed given at the earliest such time. Notice
given in any other manner shall be effective only if and when received by the addressee.
7.
Covenants of Landlord. Landlord hereby covenants that:
(a)
To the degree that Landlord's consent to the assignment granted herein is required
pursuant to the terms of the Lease, if at all, such consent is hereby given.
(b)
Landlord shall subordinate any lien in favor of Landlord created by the Lease to any
security instrument in favor of any lender to Assignee who, at any time, providesfinancingwith
respect to the Lease Premises secured by Assignee's furniture, trade and/or otherwise easily
removable fixtures, inventory or equipment (or any combination thereof). In connection
therewith, Landlord agrees to (a) use the form of subordination agreement required by and/or
otherwise acceptable to Assignee's lender, provided the terms of such subordination, as
evidenced by such form, are commercially reasonable as regards all parties thereto, and (b) duly
execute and return to Assignee such form within fifteen (15) days after the same is delivered to it.
8.
Release of Assignor. This Assignment shall release Assignor from any and all liabilities or
obligations,financialor otherwise, associated with the Lease.
9.
Closing Contingency. This Assignment is contingent on the closing of the "Contract of Sale"
between Assignee and Assignor whereunder Assignor has agreed to transfer to Assignee Assignor's
business at the Leased Premises (the "Closing"). This contingency shall be effective for thirty (30) days
after the Effective Date. In the event the Closing has not occurred within such thirty (30) day period, this
Assignment shall remain effective (yet, subject to such contingency) for an additional thirty (30) day
period unless terminated by Assignor or Assignee by written notice given to the other prior to the
expiration of the initial thirty (30) day period. Notwithstanding the foregoing, no form of notice to any
Party shall be required following the Closing in order tb ratify or otherwise permit this Assignment to
become effective as between the Parties; provided, however. Assignor shall immediately notify Landlord
in writing if the contingency set forth in this Paragraph has not been timely removed (in which event this
Assignment shall be deemed null and void and the Parties, if they wish to proceed, will be required to
execute a new version of this instrument).
[REMAINDER OF PAGE INTENTIONALLY L E F T BLANK]
DALOLl 195462.1
079684.0103
-3-
IN WITNESS WHEREOF, the Parties have caused this instrument to be executed as of the
"Effective Date," which is hereby defined as the last date entered beneath any Party's signature below.
ASSIGNOR:
By:
Date:
ASSIGNEE:
By:
Date:
UNDERSTOOD, ACKNOWLEDGED AND AGREED TO:
LANDLORD:
By:
Date:
DALOLl 195462.1
079684.0103
-4 -
EXHIBIT I H
CONFIDENTIALITY AGREEMENT (MANUALS)
DALO 1 :tt56^4=91194789.3
079684.0103
CONFIDENTIALITY AGREEMENT
This Confidentiality Agreement is entered into this day of
, 20 , by and among
,a
corporation and _
and
(collectively.
"Interested Party") and CiCi Enterprises, LP, a Delaware limited partnership ("CiCi's ").
RECITALS:
CiCi's has developed and owns a distinctive system ("CiCi's System") relating to the
establishment and operation of restaurants featuring an "All You Can Eat" buffet and offering dine-in and
carry-out pizza and other Italian foods and related items ("CiCi's Pizza Restaurants") and units designed
for pizza pick-up and catering, with no dine-in or delivery capacity ("CiCi's To Go Units"). References
to a "Facility" in this Agreement means a CiCi's Pizza Restaurant or a CiCi's To Go Unit, as applicable.
Interested Party is interested in acquiring the right to develop and/or operate a franchise for one or
more CiCi's Pizza Facilities.
To assist Interested Party in connection with its evaluation of the CiCi's Pizza business, CiCi
desires to permit Interested Party access to certain confidential and proprietary information, know-how
and documents related to the development and operation of CiCi's Pizza Facilities.
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained
and other good and valuable consideration, the sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1.
Definition. "Confidential Information" means information, oral or written, know-how
and documents relating to CiCi's, its affiliates and the CiCi's System (including, but not limited to, all
Confidential Operations Manuals, Development Manuals, and other related manuals and materials),
furnished by CiCi's or its representatives to Interested Party or its afflliates or representatives, but does
not include information which Interested Party can establish became available to Interested Party from a
source other than CiCi's or its representatives, provided that such source is not and was not bound by a
confidentiality agreement with CiCi's. Confidential Information also includes, but is not limited to, any
analysis or study prepared by or for Interested Party or its representatives which to any extent is based on
Confidential Information.
2.
Confidentialitv Agreement. Interested Party acknowledges that CiCi's desires to
maintain the confidentiality of the Confidential Information and is making it available to Interested Party
only for the limited purpose of investigating the CiCi's Pizza business. Interested Party further
acknowledges and agrees that the Confidential Information is proprietary to and a valuable trade secret of
CiCi's and that any disclosure or unauthorized use thereof shall cause irreparable loss and harm to CiCi's.
In consideration of the opportunity to obtain access to the Confidential Information, Interested Party
hereby agrees as follows:
(i)
not to use the Confidential Information for its own use or for any other purpose
except to carry out its investigation of the CiCi's Pizza business and not to disclose the Confidential
Information, except (a) as may be required by law, or (b) to outside counsel, accountants, and other
representatives or affiliates of Interested Party who need to know such information for the purpose of
investigating the CiCi's Pizza business. In the event Interested Party or any persons to whom it discloses
the Confidential Information become legally compelled (by deposition, interrogatory, request for
documents, subpoena, civil investigative demand or similar process) to disclose any of the Confidential
Information, Interested Party shall provide CiCi's with prompt prior written notice of such requirement so
that CiCi's may seek a protective order or other appropriate remedy and/or waive compliance with the
DALOl: 1195463.1
079684.0103
terms hereof fn the event that such protective order or other remedy is not obtained, or if CiCi's waives
compliance with provisions hereof, Interested Party agrees to furnish only that portion of the Confidential
Information which Interested Party is advised by written opinion of counsel is legally required and to
exercise its best efforts to obtain reasonable assurances that such Confidential Information will be
accorded confidential treatment;
(ii)
to ensure that all employees, outside counsel, accountants and other
representatives and afflliates of Interested Party who are given access to the Confidential Information on
behalf of Interested Party will be bound by, and will conduct their investigation in accordance with, the
terms ofthis Agreement. Interested Party shall be fully responsible for any breach of this Agreement by
any person to whom access to the Confidential Information is given by Interested Party or its
representatives;
(iii)
(iv)
all copies thereof
not to make copies of the Confidential Information; and
at CiCi's request, to promptly return to CiCi's all Confidential Information and
3.
Absence of Representations or Warranties. Interested Party understands and
acknowledges that CiCi's is not making any representation or warranty, express or implied, as to the
accuracy or completeness of the Confidential Information, and neither CiCi's nor any of its officers,
directors, shareholders, employees, agents or affiliates will have any liability to Interested Party or any
other person resulting from Interested Party's use of Confidential Information.
4.
Ownership. Interested Party acknowledges that the Confidential Information is owned
solely by CiCi's or its affiliates and that this Agreement shall not grant Interested Party any rights in or to
the Confidential Information except the limited right to use the Confidential Information to investigate the
CiCi's Pizza business.
5.
Remedies. Interested Party agrees that its obligations hereunder are necessary and
reasonable in order to protect CiCi's and expressly agrees that monetary damages would be inadequate to
compensate CiCi's for any breach of the covenants and agreements set forth herein. Interested Party
further agrees and acknowledges that any such violation or threatened violation will cause irreparable
injury to CiCi's. Accordingly, Interested Party agrees that, in addition to any other remedies that may be
available at law, in equity or otherwise, CiCi's shall be entitled to obtain injunctive relief and specific
performance against Interested Party for the threatened breach of this Agreement or the continuation of
any such breach, without proof of actual damages.
6.
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit
ofthe undersigned parties, their successors and assigns; provided that Interested Party's rights under this
Agreement shall not be assigned without the prior written consent of CiCi's.
7Amendments and Waiver. This Agreement constitutes the complete agreement
between Interested Party and CiCi's conceming the subject matter hereof and supersedes all prior related
agreements. This Agreement may be amended only in writing executed by the parties hereto. Failure to
enforce any provision ofthis Agreement in one or more instances shall not constitute a waiver of any term
hereof.
DAL01:1195463,1
079684.0103
-2-
8.
Governing Law. This Agreement shall be governed by and construed in accordance
with the laws ofthe state of Texas (regardless of the laws that might otherwise govem under applicable
conflicts of law principles) as to all matters, including but not limited to matters of validity, construction,
effect, performance and remedies.
9.
Jurisdiction and Venue. ANY SUIT, ACTION OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT SHALL BE BROUGHT EXCLUSIVELY IN THE STATE COURTS OF THE
STATE OF TEXAS, COUNTY OF DALLAS, OR IN THE UNITED STATES DISTRICT COURT FOR
THE NORTHERN DISTRICT OF TEXAS, DALLAS DIVISION. FOR THE PURPOSES OF SUCH
EXCLUSIVE JURISDICTION, THE PARTIES HEREBY IRREVOCABLY WAIVE ANY
OBJECTIONS WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR
VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT BROUGHT IN SUCH COURTS AND HEREBY FURTHER IRREVOCABLY WAIVE
ANY CLAIM THAT SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
IN WITNESS WHEREOF, the undersigned parties have executed and delivered
Confidentiality Agreement to be effective as of the day and year first above mentioned.
INTERESTED PARTY
a
a
corporation
partnership
By:.
Name:
Title:
(Signature)
(Typed Name)
(Signature)
(Typed Name)
CICI ENTERPRISES, LP,
a Delaware limited partnership
By: CiCi GP, LLC, its General Partner
By:
Name:
Title:
DAL0i:1195463.1
079684.0103
-3 -
this
EXHIBIT J l
JMC EQUIPMENT FINANCING DOCUMENTS (PROMISSORY NOTE,
GUARANTY AND SECURITY AGREEMENT)
DALO 1:11S6Q54.91194789.3
079684.0103
PROMISSORY N O T E
(Non-Interest Bearing)
2012
FOR V A L U E R E C E I V E D ,
,a
corporation (the "Maker"), promises to pay to the
order o f J M C Restaurant D i s t r i b u t i o n , L P , a
limited partnership (the "Payee"), the principal
sum o f
Dollars ($
). A l l sums that are due and payable under this Promissory Note
(the "Note") are payable to the Payee at the address set forth in Paragraph 6 o f this Note or at any other
locadon that the holder o f this Note may designate by written notice to the Maker.
1.
Interest Rate A n d C o m p u t a t i o n . The unpaid principal balance o f this Note from dme to time
outstanding prior to the occurrence o f an Event o f Default (which term is defined in Paragraph 3 o f this
Note) or maturity shall not bear interest. After the occurrence o f an Event o f Default, at the option o f the
Payee, the principal balance o f this Note shall bear interest for the period beginning with the date o f
occurrence o f the Event o f Default until the date that the Event o f Default is cured and no longer exists, at
the lesser o f (A) Eighteen Percent (18%) per annum, or (B) the Maximum Rate (which term is defined in
Paragraph 9 o f this Note).
2.
Payments. This Note shall be payable as follows:
A.
The principal amount o f this Note shall be paid in
(
) equal
monthly installments o f
Dollars and
Cents ($
) each beginning
on
, 200
, and continuing on the first day o f each month thereafter.
B.
I f not sooner paid, all principal and accrued interest, i f any, shall be due and payable on
,
(the "Maturity Date").
3.
Security; Events O f D e f a u l t A n d Remedies. This Note is secured by a Security Agreement o f
even date herewith executed by Maker, as debtor, and Payee, as secured party (the "Security Agreement"). I n
the event o f default in the payment o f principal or interest under this Note and the continuance o f said
default for a period o f three (3) business days ("Cure Period") after receipt by Maker o f written notice
("Default Notice") f r o m Payee (an "Event o f Default"), then the Payee shall have the uncondidonal right,
without demand, notice or other acdon, to (i) declare the unpaid principal balance o f this Note together with
aU accrued interest to be at once due and payable, and (ii) foreclose each lien and security interest that may
secure the payment hereof, either under any power o f sale contained in the Security Agreement or by court
proceedings, as the holder o f this Note may elect. Failure to exercise this opdon shall not constitute a waiver
o f the right to exercise it at any other time when a default shall exist or condnue. The acceptance by the Payee
o f any payment hereunder which is less than the payment in full o f the amount due and payable under this
Note at the time o f the payment shall not constitute a waiver o f any rights at that time or at any subsequent
dme or nullify any prior exercise o f any rights.
4.
Waiver. Except for any Default Notice Maker hereby (A) waives notice o f default, demand for
payment, diligence in filing suit, protest, notice o f protest, notice o f intent to accelerate, notice o f
acceleration, presentment f o r payment and notice o f dishonor; and (B) agrees that the time for payment o f
any installment may be extended f r o m time to time without notice at the option o f the Payee.
5.
Late Charge. Time is o f the essence o f this Note. I f the Maker fails to pay any monthly installment
or any other amount due and payable hereunder for a period exceeding fifteen (15) days after the same shall
be due (excluding the final payment o f principal and interest that is due upon the maturity o f this Note), the
Maker shall, at the option o f the Payee, pay a "late charge" in an amount equal to Five Percent (5%) o f the
delinquent payment to reimburse the Payee for the extra costs and expenses caused by the delinquent
payment.
DAL0I:1I95465.1
079684.0103
6.
Notices. A l l notices or other communications that may be required or permitted to be given under
this Note shall be in writing and shall be considered as properly given i f (A) personally served, or (B) mailed
by furst class United States mail, postage prepaid, certified mail, retum receipt requested, addressed to the
party entitled thereto, or (C) sent by nationwide commercial courier to the party entitied thereto. I f mailed,
notice shall be effective upon the next business day following deposit in a post office or other official
depository under the care and custody o f the United States Postal Service. I f sent by commercial courier, the
notice shall be effective upon the date o f delivery. Notice given in any other manner shall be effective only i f
and when received by the addressee. For purposes o f notice, the addresses o f the parties shall be as set forth
below; provided, however, that the Maker and the Payee or other holder o f this Note shall have the right to
change their address for notice hereunder to any other location within the continental United States by the
giving o f thirty (30) days notice to the other party in the manner set forth in this Paragraph 6:
I f addressed to Maker:
I f addressed to Payee:
J M C Restaurant Distribution, LP
Attention:
7.
Paragraph Headings. Paragraph headings appearing in this Note are for convenience only and shall
not be used to interpret or limit the meaning o f any provision o f this Note.
8.
Governing L a w . T H I S N O T E S H A L L B E G O V E R N E D B Y A N D C O N S T R U E D I N
A C C O R D A N C E W I T H T H E LAWS O F T H E S T A T E O F T E X A S A N D T H E U N I T E D STATES O F
A M E R I C A F R O M T I M E T O T I M E I N EFFECT. D A L L A S C O U N T Y , T E X A S , SPIALL B E T H E
PROPER P L A C E O F V E N U E FOR S U I T H E R E O N . T H E M A K E R A N D A N Y A N D A L L
ENDORSERS I R R E V O C A B L Y A G R E E TPL^T A N Y L E G A L P R O C E E D I N G W I T H RESPECT T O
THIS N O T E OR A N Y OF T H E O T H E R L O A N D O C U M E N T S SHALL BE B R O U G H T I N T H E
D I S T R I C T COURTS O F D A L L A S C O U N T Y , T E X A S , O R T H E U N I T E D STATES D I S T R I C T COURT
FOR T H E N O R T H E R N DISTRICT OF TEXAS, DALLAS DIVISION.
9.
M a x i m u m Rate. The Maker and the Payee intend to conform strictly to the applicable usury laws.
I n no event, whether by reason o f demand for payment, prepayment, acceleration o f the maturity hereof or
otherwise, shall the interest contracted for, charged or received by the Payee under this Note or otherwise
exceed the Maximum Rate. I f f r o m any circumstance whatsoever interest would othenvise be payable to the
Payee in excess o f the Maximum Rate, the interest payable to the Payee shall be reduced automatically to the
Maximum Rate. I f the Payee shall ever receive anything o f value deemed to constitute interest under
applicable law which would, apart f r o m this provision, be in excess o f the Maximum Rate, an amount equal
to the amount which would have been excessive interest shall be applied to the reduction o f the principal
amount owing under this Note in the inverse order o f its maturity and not to the payment o f interest. I f the
amount that would have been excessive interest exceeds the unpaid principal balance o f this Note, the excess
shall be refunded to the Maker. A l l interest paid or agreed to be paid to the Payee shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread throughout the full stated term
(including any renewal or extension) o f such indebtedness so that the amount o f interest on account o f such
indebtedness does not exceed the Maximum Rate. The provisions o f this paragraph shall control all existing
and future agreements between the Maker and the Payee. As used herein, the term "Maximum Rate" means
the maximum non-usurious rate o f interest under applicable federal and Texas law which may be lawfully
contracted for, charged, taken, reserved or received by the Payee f r o m the Maker in connection with the loan
evidenced hereby.
DAL01:1195465.1
079684.0103
10.
Successors A n d Assigns. This Note and all the covenants and agreements contained herein shall be
binding upon, and shall inure to the benefit of, the Maker and the Payee and their respective successors and
assigns.
11.
Severability. I f any provision o f this Note shall be determined by any court o f competent
jurisdiction to be illegal or unenforceable, then that pro\'ision only shall be o f no force and effect and shall be
deemed excised herefrom, and the remaining provisions o f this Note shall be enforced.
12.
Attorney's Fees A n d Costs. I f this Note is not paid when due, whether by maturity or by
acceleration, or i f it is collected through a bankruptcy, probate or other court, whether before or after
maturity, the Maker agrees to pay all costs and expenses o f collection incurred by the Payee, including but not
limited to Payee's attomey's fees, whether or not any legal action shall be instituted.
MAKER:
By:
_, President
DAL01:!195465.I
079684.0103
GUARANTY
AGREEMENT
This Guaranty Agreement ("Guaranty") is made as o f
,
, by
and
(each, individually, a "Guarantor", and collectively, the "Guarantors"), in favor o f Seller (as
hereinafter defined).
1.
D e f i n i t i o n s . As used i n this Guaranty, the following terms shall have the meanings indicated below:
A.
"Seller" means J M C Restaurant D i s t r i b u t i o n , L P , a
whose address f o r notice purposes is
.
B.
"Buyer" means
, a
limited partnership,
corporation, whose address for notice purposes is
C.
" N o t e " means that certain Promissory Note o f even date herewith executed by Buyer and
payable to the order o f Seller i n the original principal amount o f
Dollars
($
payable as therein provided.
D.
"Obligations" means (i) all principal, interest, attorneys fees and other sums which are or
may be due or owing to Seller under the Note and all renewals, extensions and modifications thereof;
and (ii) all costs, attorneys fees and expenses incurred by Seller in collecting any o f the Obhgations
due to a default by Buyer or in enforcing any rights granted to Seller hereunder.
2.
Guaranty o f Obligations. As an inducement to Seller to extend credit to Buyer, each Guarantor, for
value received, hereby unconditionally and absolutely guarantees the prompt and full payment and
performance o f the Obligations when due or declared to be due and at all times thereafter.
3.
Character of Obligations.
A.
This is an absolute, continuing and unconditional guaranty o f payment and not o f collection.
Each Guarantor shall be liable, joindy and severally, with Buyer, the other Guarantor and any other
guarantor o f all or any part o f the Obligations.
B.
Each Guarantor agrees that its obhgations hereunder shall not be released, diminished,
impaired, reduced or affected by the existence o f any other guaranty or the payment by the other
Guarantor or other guarantor o f all or any part o f the ObUgations, and each Guarantor's obligations
hereunder shall continue until Seller has received payment in full o f the Obligations.
C.
Without further authorization f r o m or notice to any Guarantor, Seller may compromise,
accelerate, or otherwise alter the time or manner f o r the payment o f the Obligations, increase or
reduce the rate o f interest thereon, or release or add any one or more guarantors or endorsers, or
allow substitution o f or withdrawal o f collateral or other security and release collateral and other
security or subordinate the same.
4.
SeUer:
Representations a n d Warranties. Each Guarantor hereby represents and warrants the following to
A.
and
DAL01:1195465.1
079684.0103
This Guaranty may reasonably be expected to benefit, direcdy or indirectly, the Guarantor;
B.
The Guarantor is familiar with, and has independentiy reviewed the books and records
regarding, the financial condition o f Buyer and is familiar with the value o f any and all collateral
intended to be security for the payment o f all or any part o f the Obligations; and
C.
The Guarantor has adequate means to obtain f r o m Buyer on a continuing basis information
concerning the financial condition o f Buyer; and
D.
The Guarantor has the power and authority to execute, deUver and perform this Guaranty
and any other agreements executed by tbe Guarantor contemporaneously herewith, and the
execution, delivery and performance o f this Guaranty and any other agreements executed by the
Guarantor contemporaneously herewith do not and will not violate (i) any agreement or instrument
to which the Guarantor is a party or its property is subject, or (li) any law or order o f any
governmental authority to which the Guarantor is subject or its property is subject; and
E.
Neither Seller nor any other person has made any representation, warranty or statement to
the Guarantor in order to induce the Guarantor to execute this Guaranty; and
F.
A l l financial statements and other financial information regarding the Guarantor that may be
delivered to Seller are and shall be true and correct in all material respects and fairiy present the
financial position o f the Guarantor as o f the dates thereof, and no material adverse change has
occurred i n the financial condition o f the Guarantor reflected in the financial statements and other
financial information regarding the Guarantor since the date dehvered to Seller.
5.
Covenants. Each Guarantor hereby covenants and agrees with Seller as follows:
A.
The Guarantor shall not, so long as its obligations under this Guaranty continue, transfer or
pledge any material portion o f its assets for less than full and adequate consideration; and
B.
The Guarantor shall promptly furnish to Seller at any time and from time to time financial
statements and other financial informarion o f the Guarantor that Seller may reasonably require, in
f o r m and substance satisfactory to Seller, except that Seller may not demand such information more
than two (2) times in any twelve (12) month period; and
C.
The Guarantor shall promptiy i n f o r m Seller o f (i) any litigation or governmental
investigation against the Guarantor or affecting any security for all or any material part o f the
Obligations or this Guaranty which, i f determined adversely, might have a material adverse effect
upon the financial condition o f the Guarantor, (ii) any claim or controversy which might become the
subject o f such litigation or governmental investigation, and (iii) any material adverse change i n the
financial condition o f the Guarantor.
6.
Consent and Waiver.
A.
Except for any Default Notice (as defined i n the Note) each Guarantor waives (i) diligence
and notice o f acceptance o f this Guaranty and notice o f the incurring o f any obligation, indebtedness
or liability to which this Guaranty applies or may apply, and waives presentment for payment, notice
of nonpayment, protest, demand, notice o f protest, notice o f intent to accelerate, notice o f
acceleration, notice o f dishonor, diligence in enforcement and indulgences o f every kind, and (ii) the
taking o f any other action by SeUer, including without limitation giving any notice o f default or any
other notice to, or making any demand on. Buyer, the other Guarantor, any other guarantor o f all or
any part o f the Obligations or any other person.
DAL0I:1195465.1
079684.0103
B.
Each Guarantor waives any rights the Guarantor has under, or any requirements imposed
by. Chapter 34 o f the Texas Business and Commerce Code, as in effect on the date o f this Guaranty
or as it may be amended from time to time.
C.
Seller may at any time, without the consent o f or notice to the Guarantor, without incurring
responsibility to the Guarantor and without impairing, releasing, reducing or affecting the obligations
o f the Guarantor hereunder: (i) change the manner, place or terms o f payment o f all or any part o f
the Obligations, or renew, extend, modify, rearrange or alter all or any part o f the Obligations; (ii)
change the interest rate accruing on any o f the Obligations; (iii) sell, exchange, release, surrender,
subordinate, realize upon or otherwise deal with in any manner and in any order any collateral for all
or any part o f the Obligations or this Guaranty; (iv) fail or refuse to take or prosecute any action for
the collection o f all or any part o f the Obligations; (v) exercise or refrain from exercising any rights
against Buyer or others, or otherwise act or refrain from acting; and (vi) settie or compromise all or
any part o f the Obligations and subordinate the payment o f all or any part o f the ObUgations to the
payment o f any obligations, indebtedness or UabiUties which may be due or become due to SeUer or
others.
D.
I f Seller seeks to enforce the obUgations o f any Guarantor hereunder by action in any court
or otherwise, each Guarantor waives any requirement, substantive or procedural (except for any Cure
Period or Default Notice, as these terms are defined in the Note) that (i) SeUer first enforce any
rights or remedies against Buyer, or any other person Uable to Seller for aU or any part o f the
ObUgations, including without Umitation that a judgment first be rendered against Buyer, or any
other person, or that Buyer, or any other person should be joined in such cause, or (u) SeUer first
enforce rights against any coUateral which shaU ever have been given to secure aU or any part o f the
ObUgations or this Guaranty. Such waiver shaU be without prejudice to SeUer's right, at its option, to
proceed against Buyer or any other person, or against any collateral, whether by separate action or by
joinder.
7,
Obligations N o t Impaired.
A.
Each Guarantor agrees that its obUgations hereunder shaU not be released, diminished,
impaired, reduced or affected by the occurrence o f any one or more o f the foUowing events: (i) the
disabiUty or lack o f corporate power, as appropriate, o f Buyer, the other Guarantor, or any other
guarantor o f aU or any part o f the ObUgations, (u) any receivership, insolvency, bankruptcy or other
proceedings affecting Buyer, the other Guarantor, or any other guarantor o f aU or any part o f the
ObUgations, or any o f their respective property; (ui) the partial or total release or discharge o f Buyer,
the other Guarantor, or any other guarantor o f aU or any part o f the ObUgations, or any other person
f r o m the performance o f any obUgation contained in any instrument or agreement evidencing,
goveming or securing aU or any part o f the ObUgations, whether occurring by reason o f law or
otherwise; (iv) the taking or accepting o f any coUateral for aU or any part o f the ObUgations; (v) the
taking or accepting o f any other guaranty for aU or any part o f the ObUgations; (vi) any failure by
SeUer to acquire, perfect or continue any Uen or security interest on coUateral securing aU or any part
o f the ObUgations; (vU) the impairment o f any coUateral securing aU or any part o f the ObUgations;
(viii) any failure by SeUer to seU any coUateral securing aU or any part o f the ObUgations in a
commerciaUy reasonable manner or as otherwise required by law; or (ix) any other circumstance
which might otherwise constimte a defense avaUable to, or discharge of. Buyer, the other Guarantor,
or any other guarantor o f aU or any part o f the ObUgations (other than final payment and
performance i n fuU o f the ObUgations).
DAL01:1195465.1
079684.0103
B.
This Guaranty shaU continue to be effective or be reinstated, as the case may be, i f at any
time any payment o f aU or any part o f the ObUgations is rescinded or must otherwise be returned by
SeUer upon the insolvency, bankruptcy or reorganization o f Buyer, any Guarantor, or any other
guarantor o f aU or any part o f the ObUgations, or otherwise, aU as though such payment had not
been made.
C.
None o f the foUowing shaU affect any Guarantor's UabiUty hereunder: (i) the act o f creating
aU or any part o f the ObUgations is ultra vires; or (u) the officers creating all or any part o f the
ObUgations acted i n excess o f their authority.
8.
A c t i o n s Against Guarantors. I f an Event o f Default exists (including a default in the payment or
performance o f aU or any part o f the Note when the Note becomes due, whether by its terms, by acceleration
or otherwise), each Guarantor shall, without notice or demand, promptiy pay the amount due thereon to
SeUer, i n lawful money o f the United States, at SeUer's address set forth above. The exercise by SeUer o f any
right or remedy under this Guaranty, or under any other agreement or instrument, at law, in equity or
otherwise, shaU not preclude concurrent or subsequent exercise o f any other right or remedy. The books and
records o f SeUer shaU be admissible as evidence i n any action or proceeding involving this Guaranty and shaU
be prima facie evidence o f the payments made on, and the outstanding balance of, die ObUgations.
9.
Payment by Guarantors. Whenever a Guarantor pays any sum which is or may become due under
this Guaranty, written notice must be dehvered to SeUer contemporaneously with the payment. The notice
shaU be effective for purposes o f this paragraph when, contemporaneously with the payment, SeUer receives
the notice either by: (a) personal deUvery to the address o f SeUer identified above, or (b) United States mail,
certified or registered, return receipt requested, postage prepaid, addressed to SeUer at the address shown
above. UntU the deUvery o f the notice to SeUer by the Guarantor, any sum received by SeUer on account o f
the ObUgations shaU be conclusively deemed paid by Buyer.
10.
N o t i c e o f Sale. I f any Guarantor is entitied to receive any notice under the Uniform Commercial
Code, as it exists in the state governing any such notice, o f the sale or other disposition o f any coUateral
securing aU or any part o f the ObUgations, reasonable notice shaU be deemed given when such notice is
deposited i n die United States maU, postage prepaid, at the address for the Guarantor set forth opposite its
signature hereto, ten (10) days prior to the date any pubUc sale, or after which any private sale, o f any such
collateral is to be held; provided, however, that notice given i n any other reasonable manner or at any other
reasonable time shaU be sufficient.
11.
Waiver b y Seller. N o delay by SeUer i n exercising any r ^ h t hereunder or faUure to exercise the same
shaU operate as a waiver o f that right. N o waiver o f the provisions o f this Guaranty shaU be effective unless it
is i n writing and signed by an officer o f SeUer and then only i n the specific instance and for the purpose
given.
12.
Successors and Assigns. This Guaranty is for the benefit o f SeUer, its successors and assigns. This
Guaranty is binding upon each Guarantor and the Guarantor's heirs, executors and administrators.
13.
Costs and Expenses. Each Guarantor shaU pay o n demand by SeUer aU costs and expenses,
including without Umitation aU attorneys fees, incurred by SeUer in connection with the enforcement and/or
coUecdon o f this Guaranty. This covenant shaU survive the payment o f the ObUgations.
14.
Severability. I f any provision o f this Guaranty is held by a court o f competent jurisdiction to be
iUegal, invaUd or unenforceable, that provision shaU be fuUy severable, shaU not impair or invaUdate the
remainder o f this Guaranty and the effect thereof shaU be confined to the provision held to be iUegal, invaUd
or unenforceable.
DAL01:1195465.1
079684.0103
15.
A m e n d m e n t N o modificarion or amendment o f a n y provision o f this Guaranty, nor consent to any
departure by any Guarantor therefrom, shaU be effective unless it is in writing and signed by an officer o f
SeUer, and then shaU be effective only i n the specific instance and for the purpose for which given.
16.
C u m u l a t i v e Rights. AU rights and remedies o f SeUer hereunder are cumulative o f each other and o f
every other right or remedy which SeUer may otherwise have at law or in equity or under any instrument or
agreement, and the exercise o f one or more o f such rights or remedies shaU not prejudice or impair the
concurrent or subsequent exercise o f any other rights or remedies.
17.
G o v e r n i n g L a w , Venue. This Guaranty is intended to be performed in the State o f Texas. Except
to the extent that the laws o f the United States may apply to the terms hereof, the substantive laws o f the
State o f Texas shaU govern the vaUdity, construction, enforcement and interpretation o f this Guaranty. I n the
event o f a dispute involving this Guaranty or any other instruments executed in connection herewith, each
Guarantor irrevocably agrees that venue for the dispute shaU Ue in any court o f competent jurisdiction in
DaUas County, Texas.
18.
C o m p l i a n c e w i t h Applicable Usury Laws. Notwithstanding any other provision o f this Guaranty
or o f any instrument or agreement evidencing, governing or securing aU or any part o f the ObUgations, each
Guarantor and SeUer by their acceptance hereof agree that no Guarantor shaU ever be required or obUgated to
pay interest i n excess o f the maximum non-usurious interest rate as may be authorized by apphcable law for
the written contracts which constitute the ObUgations. Guarantors and SeUer intend to conform strictiy to the
apphcable laws which Unut interest rates, and any o f the aforesaid contracts for interest, i f and to the extent
payable by any Guarantor, shaU be held to be subject to reduction to the maximum non-usurious interest rate
aUowed under apphcable law.
19.
Gender. Within this Guaranty, words o f any gender shaU be held and construed to include the other
gender.
20.
Captions. The headings i n this Guaranty are for convenience only and shaU not define or Umit the
provisions hereof
E X E C U T E D as of the date first above written.
GUARANTORS;
Address:
Address:
DAL01:1195465.1
079684.0103
SECURITY AGREEMENT
THIS
S E C U R I T Y A G R E E M E N T ("Agreement") is made effective as o f
,
, by
. a
corporation (the "Debtor"), i n favor o f J M C Restaurant D i s t r i b u t i o n , L P , a
Umited partnership ("Secured Party"). Debtor hereby agrees with Secured Party as foUows:
D e f i n i t i o n s . As used in this Agreement, the foUowing terms shaU have the following respective meanings:
"Code" means the Texas Business and Commerce Code, as amended from time to time.
"CoUateral" means the Equipment and aU proceeds o f the Equipment (including without Umitation,
insurance payable by reason o f loss or damage to the Equipment). The designation o f proceeds does
not authorize Debtor to seU, transfer or otherwise convey any o f the Equipment except as otherwise
provided herein.
"Equipment" means the equipment and parts described on E x h i b i t A attached hereto.
"ObUgations" means (i) aU indebtedness o f Debtor to Secured Party arising under a Promissory Note
dated
, 200
, in the original principal amount o f
DoUars
(5
) executed by Debtor and payable to the order o f Secured Party (the "Note"), (u) all
costs and expenses incurred by Secured Party in connection with the collection and administration o f
aU or any part o f the Note or the protection or preservation of, or reaUzation upon, the CoUateral
securing aU or any part o f the ObUgations, including without Umitation aU reasonable attorneys' fees,
and (ui) aU renewals, extensions, modifications and rearrangements o f the obUgations described in (i)
and (ii) above.
AU words and phrases used herein which are expressly defined i n the Code shaU have the meaning specified
therein.
Security Interest. As security for the ObUgations, Debtor hereby grants to Secured Party a continuing
security interest i n the CoUateral.
Representations and Warranties. Debtor hereby represents and warrants to Secured Party the following:
A.
A u t h o r i t y . The execution, deUvery and performance by Debtor o f this Agreement and the
Note have been duly authorized by aU necessary action.
B.
Accuracy o f I n f o r m a t i o n . AU information suppUed to Secured Party by or on behalf o f
Debtor with respect to tiie CoUateral is ti^e and correct. The exact legal name o f Debtor is
correctiy shown i n the first paragraph o f this AgreemenL
C.
Enforceability. This Agreement and die Note constitute legal, vaUd and binding obUgations
o f Debtor, enforceable i n accordance with their respective terms, except as limited by banlouptcy,
insolvency or simUar laws o f general appUcation relating to the enforcement o f creditors' rights and
except to the extent specific remedies may generaUy be limited by equitable principles.
D.
O w n e r s h i p and Liens. Debtor has or wiU have good and marketable tide to the CoUateral
free and clear o f aU Uens, security interests, encumbrances or adverse claims, except for the security
interest created by this AgreemenL N o dispute, right o f setoff, counterclaim or defense exists with
respect to aU or any part o f the CoUateral. Debtor has not executed any other security agreement
currentiy affecting the CoUateral and no effective financing statement or other instrument similar in
effect covering aU or any part o f the CoUateral is o n file i n any recording office except as may have
been executed or filed i n favor o f Secured Party.
DAL01:I195465.1
079684.0103
E.
N o Conflicts or Consents. Neither the ownership, the intended use o f the CoUateral by
Debtor, the grant o f the security interest by Debtor to Secured Party herein nor the exercise by
Secured Party o f its rights or remedies hereunder, will confUct with any provision o f (a) any domestic
or foreign law, statute, rule or regulation, (b) the articles o f incorporation, charter, bylaws or other
organizational documents o f Debtor, or (c) any agreement, judgment, Ucense, order or permit
appUcable to or binding upon Debtor. N o consent, approval, authorization or order of, and no
notice to or fiUng with, any court, governmental authority or third party is required in connection
with the grant by Debtor o f the security interest or the exercise by Secured Party o f its rights and
remedies hereunder.
F.
Security Interest. Debtor has and wiU have at aU times fuU right, power and authority to
grant a security interest in the CoUateral to Secured Party in the manner provided herein, free and
clear o f any Uen, security interest or other charge or encumbrance. This Agreement creates a legal,
vaUd and binding security interest in favor o f Secured Party in the Collateral securing the ObUgations.
G.
L o c a t i o n / I d e n t i t y . Debtor's principal place o f business and chief executive office (as those
terms are used in the Code), is located at the address set forth on E x h i b i t B attached hereto. Except
as specified elsewhere herein, aU CoUateral and records concerning the CoUateral shaU be kept at that
address. Debtor's organizational structure, state o f organization, and organizational number (the
"Organizational Information") are as set forth on E x h i b i t B attached hereto. Except as specified
herein, the Organizational Information shaU not change.
H.
Solvency o f Debtor. As o f the date hereof, and after giving effect to the completion o f all
other transactions contemplated by Debtor at the dme o f the execution o f this Agreement (i) Debtor
is and vwU be solvent, (ii) the fair saleable value o f Debtor's assets exceeds and wiU continue to
exceed Debtor's UabiUties (both fixed and contingent), (Ui) Debtor is paying and wiU continue to be
able to pay its debts as they mature, and (iv) Debtor has and
have sufficient capital to carry on
Debtor's businesses and aU businesses in which Debtor is about to engage.
A f f i r m a t i v e Covenants. Debtor will comply with the foUowing covenants at aU times during the period o f
time this Agreement is effective unless Secured Party shaU otherwise consent in writing.
A.
Ownership and Liens. Debtor wUl maintain good and marketable tide to aU CoUateral free
and clear o f aU Uens, security interests, encumbrances or adverse claims, except for the security
interest created by this Agreement and the security interests and other encumbrances expressly
permitted herein. Debtor wUl not permit any dispute, right o f setoff, counterclaim or defense to exist
with respect to aU or any part o f the CoUateral. Debtor wiU cause any financing statement or other
security instrument with respect to the CoUateral to be terminated, except as may have been fded in
favor o f Secured Party. Debtor hereby irrevocably appoints Secured Party as Debtor's attorney-infact, such power o f attomey being coupled w i t h an interest, with fuU authority in the place and stead
o f Debtor and in the name o f Debtor or otherwise, for the purpose o f terminating any financing
statements currendy filed with respect to the CoUateral. Debtor wiU defend at its expense Secured
Party's right, titie and security interest in and to the CoUateral against the claims o f any third party.
B.
Further Assurances. Debtor wiU f r o m time to time at its expense promptiy execute and
deUver aU further instruments and documents and take aU further action necessary or appropriate or
that Secured Party may request in order (i) to perfect and protect the security interest created or
purported to be created hereby and the first priority o f such security interest, (ii) to enable Secured
Party to exercise and enforce its rights and remedies hereunder in respect o f the CoUateral, and (Ui) to
otherwise effect the purposes o f this Agreement, including without limitation: (a) executing (if
requested) and filing financing or continuation statements, or amendments thereto; and (b)
furnishing to Secured Party f r o m time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the Collateral, aU in reasonable
detaU satisfactory to Secured Party.
DAL01:1195465.1
079684.0103
C.
I n s p e c t i o n o f Collateral. Debtor wiU keep adequate records concerning the CoUateral and
wiU permit Secured Party and aU representatives and agents appointed by Secured Party to inspect
any o f the CoUateral at any time during normal business hours, to make and retain photocopies,
photographs and printouts thereof and to write down and record any such information.
D.
Payment o f Taxes. Debtor (i) wUl timely pay aU property and other taxes, assessments and
governmental charges or levies imposed upon the Collateral or any part thereof, (U) wUl timely pay aU
lawful claims which, i f unpaid, might become a Uen or charge upon the CoUateral or any part thereof,
and (iU) wiU maintain appropriate reserves for aU such UabiUties in a timely fashion in accordance with
generally accepted accounting principles.
E.
Mortgagee's a n d Landlord's Waivers. U p o n request o f Secured Party, Debtor shaU take
aU commerciaUy reasonable actions to cause each mortgagee o f real property owned by Debtor and
each landlord o f real property leased by Debtor to execute and deUver agreements satisfactory in
f o r m and substance to Secured Party by which the mortgagee or landlord subordinates any rights it
may have in the CoUateral.
F.
C o n d i t i o n o f E q u i p m e n t . Debtor wUl maintain, preserve, protect and keep aU o f the
Equipment in good condition, repair and working, normal wear and tear excepted, order and wiU
cause the Equipment to be used and operated in good and workmanUke manner, in accordance with
appUcable laws and in a manner which wUl not void or make cancelable any insurance with respect to
the EquipmenL
G.
Insurance.
Debtor wiU, at its own expense, maintain insurance with respect to the
Equipment in the amounts, against the risks, in the form and with the insurers, that shaU be
reasonably satisfactory to Secured Party from time to time. AU insurance payments in respect o f loss
o f o r damage to any Equipment shaU be paid to Secured Party and appUed against the ObUgations.
Negative Covenants. Debtor wiU comply with the foUowing covenants at all times during the period o f tUne
this Agreement is effective, unless Secured Party shaU otherwise consent in writing.
A.
Transfer or Encumbrance. Debtor wiU not (i) sell, assign (by operation o f law or
otherwise), transfer, exchange, lease or otherwise dispose o f any o f the CoUateral, (u) grant a Uen or
security interest in or execute, authorize, fde or record any financing statement or other security
instmment with respect to the CoUateral to any party other than Secured Party, or (iU) deUver actual
or constmctive possession o f any o f the CoUateral to any party other than Secured Party.
B.
I m p a i r m e n t o f Security Interest. Debtor wUl not take or fail to take any action which
would in any manner impair the value or enforceabiUty o f Secured Party's security interest in any
CoUateral.
C.
Possession o f Collateral. Debtor wiU not cause or permit the removal o f any CoUateral
f r o m its possession, control and risk o f loss, nor wiU Debtor cause or permit the removal o f any
CoUateral (or records concerning the CoUateral) f r o m the address on E x h i b i t B to this Agreement
other than in connection with the possession o f any Collateral by Secured Party or by its baUee.
D.
F i n a n c i n g Statement F i l i n g s . Debtor recognizes that financing statements pertaining to
the CoUateral have been or wUl be fUed in one or more o f the foUowing jurisdictions: the location o f
Debtor's place o f business, the location o f Debtor's chief executive office, or other such place as the
Debtor may be "located" under the provisions o f the Code or other appUcable law. Debtor wiU
neither cause or permit any change in the locadon o f (i) any CoUateral, (u) any records concerning
any CoUateral, or (Lu) the location o f Debtor's place o f business, or the location o f Debtor's chief
executive office, as the case may be, to a jurisdiction other than as represented on E x h i b i t B , nor
wiU Debtor change its name or the Organizational Information as represented on E x h i b i t B unless
DAL0i:n95465.!
079684.0103
Debtor shaU have notified Secured Party in writing o f the change at least thirty (30) days prior to the
effective date o f the change, and shaU have first taken aU action required by Secured Party for the
purpose o f further perfecting or protecting the security interest in favor o f Secured Party in the
CoUateral. I n any written norice furnished pursuant to this Subsection, Debtor wiU expressly state
that the notice is requked by this Agreement and contains facts that may requure additional fiUngs o f
financing statements or other notices for the purpose o f continumg perfection o f Secured Party's
security interest i n the CoUateral. Without Umiting Secured Party's rights hereunder. Debtor
authorizes Secured Party to fUe financing statements and amendments thereto under the provisions
o f t h e Code or other appUcable law.
Rights o f Secured Party. Secured Party shaU have the foUowing rights at aU times during the period o f time
this Agreement is effective.
A.
A d d i t i o n a l F i n a n c i n g Statements Filings. Debtor hereby authorizes Secured Party to
file, without the signature o f Debtor, one or more financing or continuation statements, and
amendments thereto, relating to the Collateral. Debtor further agrees that a carbon, photographic or
other reproduction o f this Agreement or any financing statement describing any CoUateral is
sufficient as a financing statement and may be fUed in any jurisdiction Secured Party may deem
appropriate.
B.
Power o f Attorney.
Debtor hereby irrevocably appoints Secured Party as Debtor's
attorney-in-fact, such power o f attorney being coupled with an interest, with fuU authority in the
place and stead o f Debtor and in the name o f Debtor or otherwise, after the occurrence o f an Event
of Default, to take any action and to execute any instmment which Secured Party may deem
necessary or appropriate to accompUsh the purposes o f this Agreement, including wdthout Umitation:
(i) to obtain and adjust insurance required by Secured Party hereunder; (U) to demand, coUect, sue
for, recover, compound, receive and give receipts f o r moneys due and to become due under or in
respect o f the CoUateral; (Ui) to receive, endorse and coUect any drafts or other instruments,
documents and chattel paper i n connection with clause (i) or (U) above; and (iv) to fUe any claims or
take any action or institute any proceedings which Secured Party may deem necessary or appropriate
for die coUecdon and/or preservation o f the CoUateral or otherwise to enforce the rights o f Secured
Party with respect to the CoUateral.
C.
Performance b y Secured Party. I f Debtor fails to perform any agreement or obUgation
provided herein. Secured Party may itself perform, or cause performance of, such agreement or
obligation, and the expenses o f Secured Party incurred i n connection therewith shaU be a part o f the
ObUgations, secured by the CoUateral and payable by Debtor on demand.
Events o f D e f a u l t . Each o f the foUowing constitutes an "Event o f Default" under this Agreement:
A.
D e f a u l t i n P a y m e n t The failure o f Debtor to make any payment o f the amounts reqmred
to be paid by Debtor under the Note, or any portion thereof, as the same shaU become due and
payable; or
B.
N o n - P e r f o r m a n c e o f Covenants. The failure o f Debtor to keep or perform any covenant
or agreement required herein; or
C.
False Representation. Any representation made by Debtor herein is false or misleading i n
any material respect; or
D.
Debtor's B a n k r u p t c y or Insolvency. I f Debtor: (i) becomes insolvent, or makes a transfer
in fraud o f creditors, or makes an assignment for the benefit o f creditors, or admits i n writing its
inabUity to pay its debts as they become due; (U) generaUy is not paying its debts as they become due;
(Ui) has a receiver, tmstee or custodian appointed for, or take possession of, aU or substantiaUy aU o f
DALOLl 195465.1
079684.0103
its assets or any o f the CoUateral, either in a proceeding brought by Debtor or in a proceeding
brought against Debtor and the appointment is not discharged or possession is not terminated within
sixty (60) days after the effective date thereof, or Debtor consents to or acquiesces in such
appointment or possession; (iv) fUes a petition for reUef under any other present or future insolvency,
bankruptcy or similar laws (aU o f the foregoing hereinafter coUectively caUed "AppUcable Bankmptcy
Law") or an involuntary petition for reUef is filed against Debtor under any AppUcable Bankmptcy
Law and the involuntary petition is not dismissed within sixty (60) days after the filing thereof, or an
order for reUef naming Debtor is entered under any AppUcable Bankmptcy Law, or any composition,
rearrangement, extension, reorganization or other reUef o f debtors now or hereafter existing is
requested or consented to by Debtor; (v) faUs to have discharged within a period o f sixty (60) days
any attachment, sequestration or similar writ levied upon any o f its property; or (vi) faUs to pay
within thirty (30) days any final money judgment against Debtor; or
E.
E x e c u t i o n o n Collateral. The CoUateral or any portion thereof is taken on execution or
other process o f law in any action against Debtor; or
F.
A b a n d o n m e n t Debtor abandons the CoUateral or any portion thereof; or
G.
A c t i o n by Other Lienholder. The holder o f any Uen or security interest on any o f the assets
o f Debtor, including without Umitation, the CoUateral (without implying the consent o f Secured Party
to the existence or creation o f a n y such Uen or security interest on the CoUateral), declares a default
thereunder or institutes foreclosure or other proceedings for the enforcement o f its remedies
thereunder; or
H.
L i q u i d a t i o n , D e a t h and
consoUdation o f Debtor; or
Related
Events.
The Uquidation, dissolution, merger or
I.
Search R e p o r t Secured Party shall receive at any time foUowing the execution o f this
Agreement a search report indicating that Secured Party's security interest is not prior to aU other
security interests or other interests reflected in the report
Remedies and Related Rights. I f an Event o f Default shaU have occurred, and without Umiting any other
rights and remedies provided herein or otherwise avaUable to Secured Partj', Secured Party may exercise one
or more o f the foUowing rights and remedies:
A.
Remedies. Secured Party may from time to time at its discretion, without Umitation and
without notice:
i.
exercise in respect o f the CoUateral aU the rights and remedies o f a secured party
under the Code (whether or not the Code appUes to the affected CoUateral);
it
require Debtor to, and Debtor hereby agrees that it wiU at its expense and upon
request o f Secured Party, assemble the CoUateral as directed by Secured Party and make it
avaUable to Secured Party at a place to be designated by Secured Party which is reasonably
convenient to both parties;
111.
reduce its claim to judgment or foreclose or otherwise enforce, in whole or in part,
the security interest granted hereunder by any avaUable judicial procedure;
iv.
seU or otherwise dispose of, at its office, on the premises o f Debtor or elsewhere,
the CoUateral, as a unit or in parcels, by pubUc or private proceedings, and by way o f one or
more contracts (it being agreed that the sale or other disposition o f any part o f the CoUateral
shaU not exhaust Secured Party's power o f sale, but sales or other dispositions may be made
f r o m time to time untU aU o f the CoUateral has been sold or disposed o f or until the
DALOLl 195465.1
079684.0103
ObUgations has been paid and performed in fuU), and at any such sale or other disposition it
shaU not be necessary to exhibit any o f the CoUateral;
V.
buy the CoUateral, or any portion thereof, at any pubUc sale;
vi.
buy the CoUateral, or any portion thereof, at any private sale i f the CoUateral is o f a
type customarUy sold i n a recognized market or is o f a type which is the subject o f widely
distributed standard price quotations;
vii.
apply for the appointment o f a receiver for the CoUateral, and Debtor hereby
consents to any such appointment; and
viii.
at its option, retain the CoUateral i n satisfaction o f the ObUgations whenever the
circumstances are such that Secured Party is entided to do so under the Code or otherwise,
to the fuU extent permitted by the Code, and Secured Party may elect whether such retention
shaU be in fuU or parrial sarisfaction o f the ObUgations.
I f Secured Party elects to seU the CoUateral, Secured Party may seU the Collateral without giving any
warranties and shaU be permitted to specificaUy disclaim any warranties o f title. Further, i f Secured Party sells
any o f the CoUateral on credit. Debtor wiU be credited only with payments acmaUy made by the purchaser,
received by Secured Party and appUed to the ObUgations. I f the purchaser faUs to pay for the CoUateral,
Secured Party may reseU the CoUateral and Debtor shaU be credited with the proceeds o f the sale. Debtor
agrees that i f Debtor is entitled to receive any notice under the Code o f the sale or other disposition o f any
CoUateral, reasonable notice shaU be deemed given when the notice is deposited in a depository receptacle
under the care and custody o f the United States Postal Service, postage prepaid, at Debtor's address set forth
on E x h i b i t B , fifteen (15) days prior to the date o f any pubUc sale, or after which a private sale, o f any o f the
CoUateral is to be held. Secured Party shaU not be obUgated to make any sale o f CoUateral regardless o f
notice o f sale having been given. Secured Party may adjourn any pubUc or private sale f r o m time to time by
announcement at the time and place fixed therefor, and the sale may, without further notice, be made at the
time and place to which it was so adjourned.
B.
A p p l i c a t i o n o f Proceeds. I f any Event o f Default shaU have occurred. Secured Party may at
its discretion apply or use any cash proceeds received by Secured Party in respect o f any sale or otiier
disposition of, coUection from, or other reaUzation upon, all or any part o f the CoUateral as foUows,
in the order and manner that Secured Party may elect:
i.
to the repayment or reimbursement o f the reasonable costs and expenses (including,
without Umitation, reasonable attorneys' fees and expenses) incurred by Secured Party in
connection with (a) the custody, preservation, use or operation of, or the sale of, coUection
f r o m , or other reaUzation upon, the CoUateral, and (b) the exercise or enforcement o f any o f
the rights and remedies o f Secured Party hereunder;
ii.
to the payment or other satisfaction o f any Uens and other encumbrances upon the
CoUateral;
iii.
to the satisfaction o f the ObUgations;
iv.
by holding the proceeds as CoUateral;
V.
to the payment o f any other amounts required by appUcable law; and
vi.
by deUvery to Debtor or any other party lawfuUy entitied to receive the proceeds
whether by direction o f a court o f competent jurisdiction or otherwise.
DAL01:1195465.I
079684.0103
C.
Deficiency. I f the proceeds o f any sale of, coUection f r o m , or other reaUzation upon, aU or
any part o f the CoUateral by Secured Party ate insufficient to pay all amounts to which Secured Party
is legaUy entided. Debtor and any party who guaranteed or is otherwise obUgated to pay aU or any
portion o f the ObUgations shaU be Uable for the deficiency, together -with interest thereon as
provided in the Equipment Contract, to the fuU extent permitted by appUcable law.
D.
N o n - J u d i c i a l Remedies. I n granting to Secured Party the power to enforce its rights
hereunder without prior judicial process or judicial hearing. Debtor expressly waives, renounces and
knowingly reUnquishes any legal right which might otherwise require Secured Party to enforce its
rights by judicial process. Debtor recognizes and concedes that non-judicial remedies are consistent
with the usage o f trade, are responsive to commercial necessity and are the result o f a bargain at
arm's length. Nothing herein is intended to prevent Secured Party or Debtor from resorting to
judicial process at either party's option.
E.
Other Recourse. Debtor waives any right to require Secured Party to proceed against any
third party, exhaust any CoUateral or other security for the ObUgations, or pursue any other remedy
avaUable to Secured Party. Debtor further waives any and aU notice o f acceptance o f this Agreement
and o f the creation, modification, rearrangement, renewal or extension o f the ObUgations. Debtor
further waives any defense arising by reason o f any disabiUty or other defense o f any thkd party or by
reason o f the cessation from any cause whatsoever o f the UabiUty o f a n y third party. Until aU o f the
ObUgations are satisfied. Debtor shaU have no right o f subrogation and Debtor waives the right to
enforce any remedy which Secured Party has or may hereafter have against any third party, and
waives any benefit o f and any right to participate in any other security now or hereafter held by
Secured Party. Without notice or demand and without any reservation o f rights against Debtor and
without affecting Debtor's liabUity hereunder or on the ObUgations, Debtor authorizes Secured Party
to (i) take or hold any other property o f any type f r o m any third party as security for the ObUgations,
and exchange, enforce, waive and release any or aU o f the other property, (ii) apply the other property
and direct the order or manner o f sale thereof that Secured Party may in its discretion determine, (Ui)
renew, extend, accelerate, modify, compromise, settie or release any o f the ObUgations or other
security f o r the ObUgations, and (iv) release or substitute any third party.
I n d e m n i t y . Debtor hereby indemnifies and agrees to hold harmless Secured Party, and its officers, directors,
employees, agents and representatives (each an "Indemnified Person") f r o m and against any and aU UabUities,
obUgations, claims, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements o f
any kind or nature (coUectively, the "Claims") which may be imposed on, incurred by, or asserted against,
any Indemnified Person arising in connection with the ObUgations or the CoUateral, except for the gross
negUgence or wUlful misconduct o f any Indemnified Person. The indemnification provided for in this Section
shaU survive the termination o f this Agreement and shaU extend and continue to benefit each individual or
entity who is or has at any time been an Indemnified Person hereunder.
Miscellaneous.
A.
E n t i r e A g r e e m e n t This Agreement contains the entire agreement o f Secured Party and
Debtor with respect to security f o r the ObUgations.
B.
A m e n d m e n t . N o modification or amendment o f any provision o f this Agreement shaU be
vaUd or effective unless it is authenticated by the party against w h o m it is sought to be enforced,
except to the extent o f amendments specificaUy permitted by the Code without authentication by the
Debtot
C.
A c t i o n s by Secured Party. The security interest and other rights o f Secured Party
hereunder shaU not be impaired by (i) any renewal, extension, increase or modification with respect
to the ObUgations, (ii) any surrender, compromise, release, renewal, extension, exchange or
DAL01:1I95465.1
079684.0103
substitution which Secured Party may grant with respect to the CoUateral, or (iU) any release or
indulgence granted to any guarantor or surety o f the ObUgations.
D.
Waiver by Secured Party. Secured Party may waive any Event o f Default without waiving
any other prior or subsequent Event o f DefaulL Secured Party may remedy any default without
waiving the Event o f Default remedied. Neither the faUure by Secured Party to exercise, nor the
delay by Secured Party in exercising, any right or remedy upon any Event o f Default shaU be
constmed as a waiver o f that Event o f Default or as a waiver o f the right to exercise any right or
remedy at a later date. N o single or partial exercise by Secured Party o f any right or remedy
hereunder shaU exhaust it or shaU preclude any other or further exercise thereof, and every right or
remedy hereunder may be exercised at any time. N o waiver o f a n y provision hereof or consent to
any departure by Debtor therefrom shaU be effective unless it shall be in writing and signed by
Secured Party and then the waiver or consent shaU be effecrive only in the specific instances, for the
purpose for which given and to the extent therein specified. N o norice to or demand on Debtor in
any case shaU o f itself entitie Debtor to any other or further notice or demand in simUar or other
circumstances.
E.
Costs and Expenses. Debtor wiU upon demand pay to Secured Party the amount o f any
and aU costs and expenses (including without Umitation, attorneys' fees and expenses), which Secured
Part)' may incur in connection with (i) the custody, preservation, use or operation of, or the sale of,
coUection f r o m , or other reaUzation upon, the CoUateral, or (U) the failure by Debtor to perform or
observe any o f the provisions hereof
F.
G o v e r n i n g Law. T H I S A G R E E M E N T S H A L L B E G O V E R N E D BY A N D
C O N S T R U E D I N A C C O R D A N C E W I T H T H E LAWS O F T H E STATE O F T E X A S A N D
A P P L I C A B L E F E D E R A L LAWS, E X C E P T T O T H E E X T E N T P E R F E C T I O N A N D T H E
E F F E C T O F P E R F E C T I O N OR N O N - P E R F E C T I O N O F T H E SECURITY I N T E R E S T
G R A N T E D H E R E U N D E R A R E G O V E R N E D B Y T H E LAWS O F T H E STATE O F TEXAS.
G.
Venue. This Agreement shaU be performable for aU purposes in DaUas County, Texas.
Courts within the State o f Texas shaU have jurisdiction over any and aU disputes arising under or
pertaining to this Agreement and venue f o r any such disputes shaU be in Dallas County, Texas.
H.
Severability. I f any provision o f this Agreement is held by a court o f competent jurisdiction
to be illegal, invaUd or unenforceable under present or future laws, that provision shall be fully
severable, shaU not impair or invaUdate the remainder o f this Agreement and the effect thereof shaU
be confined to the provision held to be iUegal, invaUd or unenforceable.
I.
N o t i c e s . AU nodces, requests, demands or other communications required or permitted to
be given pursuant to this Agreement shaU be in writing and given by (i) personal deUvery, (U)
expedited deUvery service with proof o f deUvery, or (iU) United States maU, postage prepaid,
registered or certified maU, return receipt requested, sent to the intended addressee at the address set
forth on E x h i b i t B o f this Agreement or to any different address that the addressee shaU have
designated by written notice sent pursuant to the terms hereof, and shaU be deemed to have been
received either, in the case o f personal deUvery, at the time o f personal deUvery, in the case o f
expedited deUvery service, as o f the date o f first attempted deUvery at the address and in the manner
provided herein, or in the case o f maU, upon deposit in a depository receptacle under the care and
custody o f the United States Postal Service. Either party shaU have the right to change its address for
notice hereunder to any other location by notice to the other party o f the new address at least thirty
(30) days prior to the effective date o f the new address.
J.
B i n d i n g E f f e c t and A s s i g n m e n t This Agreement (i) creates a continuing security interest
in the CoUateral, (ii) shaU be binding o n Debtor and its successors and assigns, and (iii) shall inure to
the benefit o f Secured Party and its successors and assigns. Without limiting the generaUty o f the
DAL01:1195465.1
079684.0103
foregoing. Secured Party may pledge, assign or otherwise transfer the ObUgations and its rights under
this Agreement to any other party. Debtor's rights and obUgations hereunder may not be assigned or
otherwise transferred without the prior written consent of Secured Party.
K.
Cumulative Rights. AU rights and remedies of Secured Party hereunder are cumulative and
the exercise of one or more of those rights or remedies shaU not prejudice or impak the concurrent
or subsequent exercise of any other rights or remedies. Except as specificaUy noted as a waiver
herein, no provision of this Agreement is intended by the parties to this Agreement to waive any
rights, benefits or protection afforded to Secured Party under the appUcable law.
L.
Gender and Number. Within this Agreement, words of any gender shall be held and
constmed to include the other gender, and words in the singular number shaU be held and construed
to include the plural and words in the plural number shaU be held and construed to include the
singular, unless in each instance the context requkes otherwise.
M.
Descriptive Headings. The headings in this Agreement are for convenience only and shall
not enlarge, Umit or define the scope or meaning of the various and several provisions hereof
EXECUTED as of the date first written above.
DEBTOR:
By:
President
S E C U R E D PARTY:
JMC R E S T A U R A N T D I S T R I B U T I O N , LP
By:
JMC GP, LLC
General Partner
By:
Bob KuUck, Manager
DAL01:I195465.1
079684.0103
EXHIBIT A
DESCRIPTION OF EQUIPMENT
DAL01:1195465.1
079684.0J03
EXHIBIT B
INFORMATION CONCERNING T H E DEBTOR
Debtor represents and warrants to Secured Party that the foUowing information with respect to the Debtor is
tme and correct:
1.
Legal Name;
2.
Type of Entity:
3.
Place of Organization:
4.
Federal Taxpayer I D Number:
5.
State Organization Number:
6.
Principal Place of Business:
7.
Chief Executive Office:
8.
Location of Equipment:
DAL01:1195465.i
079684.0103
CORPORATION
^
EXHIBIT KJ
FORM OF GENERAL RELEASE
DA1.01:1194789.3
079684.0103
FORM OF GENERAL RELEASE
[Current Form for Transfers and Renewals]
Developer [and/or Franchisee], Principal[s], and their respective officers, directors, employees,
successors, assigns, heirs, personaf representatives, and all other persons acting on their behalf or
claiming under them (the "Releasinp Parties"L hereby release and forever discharge Franchisor, its
predecessors, parents, subsidiaries, and affiliates and their respective officers, directors, shareholders,
employees, successors, and assigns, past and present, from any claims, debts, liabilities, demands,
obligations, actions, and causes o f action, known or unknown, vested or contingent, which any of them
may have ever had, now has, or may hereafter have by reason of any event, transaction, or circumstance
arising out of or relating to the Development Agreement and Franchise Agreements, but excluding claims
based on any representation that Franchisor made in the most recent Franchise Disclosure Document
(including its exhibits and amendments) that Franchisor delivered to Franchisee or its representative in
connection with the offer of the Development Agreement and Franchise Agreements, subject to agreedupon changes to the contract terms described in that Franchise Disclosure Document and reflected in
Development Agreement and Franchise Agreements (including any riders or addenda signed at the same
time as the Development Agreement and Franchise Agreements). Developer [and/or Franchisee] and
PrincipalfslThe Releasing Parties represent and warrant that they have not assigned or transferred, or
purported to assign or transfer, to any person or entity, any suit, claim, controversy, liability, demand,
action, or cause o f action described herein.
IFor California franchisees, add: Each of the Releasing Parties expressly waives and relinouishes
all rights and benefits which either mav now have or in the future have under and hv virtue of
California Civil Code Section 1542. The Releasing Parties do so understanding the sipnil
and consequence of such snecific waiver. Section 1542 nrovides that " I a l general rel
extend to claims which the creditor does not know or suspect exist in his favor at the time of
executing the release, which i f known bv him must have materially affected his settlement with the
debtor." For the purpose of implementing a general release and discharge as described in Section
its effect, without limitation, all claims descrihed in Set
not know or suspect to exist in their favor at the time of execution here*
contemplates the extinfruishment of anv such claims.l
DAI.niM19S461.2
teleasing Parties do
reement
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed
by its duly authorized representative as of the date indicated below.
FRANCHISOR:
CiCi Enterprises, LP,
a Delaware limited partnership
By: CiCi GP, LLC, its General Partner
By:.
Name:.
Title:_
Date:
FRANCHISEE:
By:.
Name:
Title: _
Date: __
DALO 1 :i4g^Q4r»l9S461.2
079684.0103
EXHIBIT fcK
GIFT CARD PROGRAM CONSENT FOR ACH DEBITS AND CREDITS
DA1J11:1194789.3
[DATE]
Paymentech, LLC
14221 Dallas Parkway
Dallas, Texas 75254
Attn: M
RE:
Dear Paymentech:
We request and authorize you to process debit and credit Automated Clearing House ("ACH")
transactions to our bank account listed below in accordance with instrucUons received by you from
These transactions will be initiated pursuant to an agreement between you and
and will only
be for the purpose of settling stored value card sales and redemptions by us in connection with EIS's
stored value card program (the "Program").
The bank account information is:
rS'^M [Name of Bank]
ABA No.
Account No.
Account Name:(
Reference:!^^
We also understand that information related to the debit and credit transactions to our bank account will
be provided by you to ^ 3 for their use in connection with the Program, and we hereby consent to your
providing such information to
We agree to indemnify and defend Paymentech for any claims,
losses, or actions caused by or as a result of our activiUes pursuant to the Program. We further agree
that Paymentech assumes no liability for acUng in accordance with the requirements of the Program or
instructions received by us or K l .
Sincerely,
Merchant Legal Name
AuUiorized Signature
DALOI :1195464.1
079684.0103
EXHIBIT ML
GUIDELINES FOR INVESTMENT PROGRAM
DAI.01:1I947S9 3
079684.0103
Guidelines for Investment Program
Guideline
Developer
CiCi Enterprises, LP
(or investment subsidiary or
affiliate)
Amount of equity investment
At least $125,000
$100,000
Ownership Percentage (based
on the investment levels listed
above)
56%
44%
Type of shares or membership
interests
Class A
Class B
Voting Rights
Yes
No
Guarantor on Loan
Yes
No
Guarantor on Lease
Yes
No
Exercise of Control
Yes
No .
Liquidation Preference
No
Yes (see the following examples)
CiCi's (or its investment subsidiary or affiliate) will have the right to receive a preferential retum of its
funds invested ("liquidation preference") on any sale of the Restaurant, the entity that owns the
Restaurant or all ownership interests in that entity or on the dissolution of the entity that owns the
Restaurant ("liquidation event"). No Class A interests may be sold apart from the Class B interests.
Dissolution of the entity will be required upon termination or non-renewal of the entity's CiCi's Pizza
Franchise Agreement.
The following examples illustrate the liquidation preference. In each, "equity value" means the net
amount of cash available to the equity owners; the ownership percentages are based on the investment
levels listed in the above chart.
Example 1: Equity Value Exceeds Basis
Equity Value of Class B and Class A = $400,000
On a liquidation event. Class B interests would receive 44% or $176,000 (with a cost basis of $100,000)
and Class A interests would receive 56% or $224,000 (with a cost basis of $125,000)
Example 2: Equity Value Is Less Than Basis - Class A
Equity Value of Class B and Class A = $160,000
On a liquidation event. Class B interests would receive $100,000 (cost basis) and Class A interests would
receive $60,000 (with a cost basis of $125,000)
Example 3: Equity Value Is Less Than Basis - Class A and Class B
Equity Value of Class B and Class A = $75,000
On a liquidation event. Class B interests would receive $75,000 (with a cost basis of $100,000) and Class
A interests would receive $0 (with a cost basis of $125,000)
Example 4: No Equity Value For Either Class A or Class B
Equity Value of Class B and Class A = $0
On a liquidation event, neither Class B interests nor Class A interests would receive any return and each
would have a 100% loss of their investment
CiCi's will have the right to approve the organizational documents of any entity in which it or its
investment subsidiary or affiliate makes an equity investment for purposes of determining compliance
with these investment guidelines. In addition, the entity receiving the investment must pay CiCi's an
investment monitoring fee of $250 per month.
DAL01:I194789.3
ATTACHMENT 1
LIST OF STATE ADMINISTRATORS
DAL01:1I94789J1
ATTACHMENT I
LIST OF STATE ADMINISTRATORS
CALIFORNIA
MARYLAND
Department of Corporations
320 West 4th Street, Suite 750
Los Angeles, CA 90013-1105
866-275-2677
Office of the Attomey General
Division of Securities
200 St. Paul Place
Baltimore, Maryland 21202-2020
FLORIDA
MICHIGAN
Department of Agriculture and Consumer
Services
Mayo Building, 2"*^ Floor
Tallahassee, Florida 32399
Franchise Administrator
Consumer Protection Division
Franchising Section
Michigan Department of Attorney General
G. Mennen Williams Building, 1st Floor
525 West Ottawa
Lansing, Michigan 48933
HAWAII
Business Registration Division
Department of Commerce
and Consumer Affairs
335 Merchant Street
Honolulu, Hawaii 96813
ILLINOIS
Chief, Franchise Bureau
Attomey General's Office
500 South Second Street
Springfield, Illinois 62706
INDIANA
Securities Commissioner
Indiana Securities Division
302 West Washington Street
Room E-111
Indianapolis, Indiana 46204
MINNESOTA
Franchise Examiner
Minnesota Department of Commerce
85 Seventh Place East
Suite 500
St. Paul, Minnesota 55101
NEBRASKA
Nebraska Department of
Banking and Finance
Commerce Court
1230 "O" Street
Suite 400
P.O. Box 95006
Lincoln, Nebraska 68509-5006
NEW YORK
Assistant Attorney General
New York Department of Law
Investment Protection
Bureau
120 Broadway, 23rd Floor
New York, New York 10271
DAL01:U53tW4^ll954S6.1
079684.0103
State Corporation Commission
Division of Securities '
and Retail Franchising
1300 East Main Street, 9th Floor
Richmond, Virginia 23219
NORTH DAKOTA
Franchise Examiner
North Dakota Securities Department
600 East Boulevard, Fifth Floor
Bismarck, North Dakota 58505
WASHINGTON
OREGON
Administrator
Department of Financial Institutions
Securities Division
150 Israel Rd. S.W.
Tumwater, Washington 98501
Department of Consumer and
Business Services
Division of Finance and
Corporate Securities
Labor and Industries Building
Salem, Oregon 97301
WISCONSIN
Franchise Administrator
Division of Securities
Department of Financial Institutions
345 West Washington Avenue
Madison, Wisconsin 53703
RHODE ISLAND
Securities Division
Department of Business Regulation
1511 Pontiac Avenue
John O. Pastore Complex - Building 69-1
Cranston, Rhode Island 02920
SOUTH DAKOTA
Franchise Administrator
Department of RcvcnucLabor and Regulation
Division of Securities
445 E. Capitol
Pierre, South Dakota 57501-2017
TEXAS
Statutory Document Section
Secretary of State
P.O. Box 12887
Austin, Texas 78711
UTAH
Director
Division of Consumer Protection
Utah Department of Commerce
160 East Three Hundred South
P.O. Box 45804
Salt Lake City, Utah 84145
VIRGINIA
DALO 1 :n53197.in95456.1
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-2-
ATTACHMENT II
AGENTS FOR SERVICE OF PROCESS
DALO 1:11560S4.91194789.3
079684.0103
ATTACHMENT II
AGENTS FOR SERVICE OF PROCESS
CALIFORNIA
MARYLAND
Commissioner of Corporations
Department of Corporations
320 West 4th Street, Suite 750
Los Angeles, CA 90013-2344
Maryland Securities Commissioner
Maryland Division of Securities
200 St. Paul Place
Baltimore, Maryland 21202-2020
CONNECTICUT
MICHIGAN
Banking Commissioner of State of
Connecticut
Securities and Business Investment Division
Connecticut Department of Banking
260 Constitution Plaza
Hartford, Connecticut 06103-1800
(860) 240-8230
Michigan Department of Commerce
Corporations and Securities Bureau
G. Mennen Williams Building, 6th Floor
525 West Ottawa
Lansing, Michigan 48933
MINNESOTA
HAWAII
Commissioner of Securities
Department of Commerce
and Consumer Affairs
Business Registration Division
335 Merchant Street
Honolulu, Hawaii 96813
ILLINOIS
Illinois Attomey General
500 South Second Street
Springfield, Illinois 62706
INDIANA
Secretary of State
201 State House
200 West Washington
Indianapolis, Indiana 46204
DAL01:t4S318S^i
079684.0103
Commissioner of Commerce
85 Seventh Place East
Suite 500
St. Paul, Minnesota 55101
NEW YORK
Secretary of State of
the State of New York
41 State Street
Albany, New York 12231
NORTH DAKOTA
Securities Commissioner
North Dakota Securities Department
600 East Boulevard Avenue
State Capitol - 5th Floor
Bismarck, North Dakota 58505-0510
OREGON
WASHINGTON
Director
Department of Consumer and
Business Services
Division of Finance and
Corporate Securities
Labor and Industries Building
Salem, Oregon 97301
Director of Financial Institutions
Securities Division
150 Israel Rd. S.W.
Tumwater, Washington 98501
RHODE ISLAND
Commissioner of Securities
Wisconsin Securities Commission
345 West Washington Avenue
Madison, Wisconsin 53703
Director
Department of Business Regulation
1511 Pontiac Avenue
John O. Pastore Complex - Building 69-1
Cranston, Rhode Island 02920
SOUTH DAKOTA
Director
Department of Revenue and Regulation
Division of Securities
445 E. Capitol Ave.
Pierre, South Dakota 57501
VIRGINIA
Clerk of the State
Corporation Commission
1300 East Main Street, 1st Floor
Richmond, Virginia 23219
DALOLHS^
079684.0103
H 195459.1
WISCONSIN
ATTACHMENT III
STATE ADDENDA TO THE DISCLOSURE DOCUMENT
DALO 1:11560.S4.9I194789.3
079684.0103
ADDENDUM TO THE CICI ENTERPRISES, LP
FRANCHISE DISCLOSURE DOCUMENT
FOR THE STATE OF CALIFORNIA
1.
The California Department of Corporations requires that certain provisions contained in
franchise documents be amended to be consistent with California law, including the California Franchise
Investment Law, CAL. CORP. CODE Section 31000 et seg., and the Califomia Franchise Relations Act,
CAL. BUS. & PROF. CODE Section 20000 et seg. To the extent that the disclosure document/and or
Franchise Agreement contain provisions that are inconsistent with the following, such provisions are
hereby amended:
A.
Item 3 of the disclosure document is supplemented by the following language
Neither we nor any person or franchise broker in Item 2 of the disclosure document is
subject to any currently effective order of any national securities association or national
securities exchange, as defined in the Securities Exchange Act of 1934, 15 U.S.C.A.78a
et seq., suspending or expelling such persons from membership in such association or
exchange. .
B.
DALO 1:11S330L11195457.1
079684.0103
Item 17 of the disclosure document is supplemented by the following language
a.
California Business and Professions Code Sections 20000 through 20043
provide rights to the franchisee conceming termination or non-renewal
of a franchise. I f the franchise agreement contains a provision that is
inconsistent with the law, the law will control.
b.
The franchise agreement provides for termination upon bankruptcy.
This provision may not be enforceable under federal bankruptcy law (11
U.S.C.A. Sec. 101 etseq.).
c.
The franchise agreement contains a covenant not to compete which
extends beyond the termination of the franchise. This provision may not
be enforceable under California law.
d.
The franchise agreement requires mediation through either an individual
mediator or a mediator appointed by a mediation services organization or
body, experienced in the mediation of food service business disputes,
agreed upon by the parties. I f no agreement, mediation to be conducted
by the American Arbitration Association at Franchisor's corporate
headquarters with the costs being bome equally by the parties.
Prospective franchisees are encouraged to consult private legal counsel
to determine the applicability of Califomia and federal laws (such as
Business and Professions Code Section 20040.5, Code of Civil
Procedure Section 1281, and the Federal Arbitration Act) to any
provisions of a franchise agreement restricting venue to a forum outside
the State of Califomia.
e.
The franchise agreement requires application of the laws of Texas. This
provision may not be enforceable under Califomia law.
f.
The franchise agreement contains a liquidated damages clause. Under
Califomia Civil Code Section 1671, certain liquidated damages clauses
are unenforceable.
2.
OUR WEBSITE HAS NOT BEEN REVIEWED OR APPROVED BY THE
CALIFORNIA DEPARTMENT OF CORPORATIONS. ANY COMPLAINTS CONCERNING THE
CONTENT OF THIS WEBSITE MAY BE DIRECTED TO THE CALIFORNIA DEPARTMENT OF
CORPORATIONS AT www.corp.ca.gov.
3.
THE CALIFORNIA FRANCHISE INVESTMENT LAW REQUIRES THAT A COPY
OF ALL PROPOSED AGREEMENTS RELATING TO THE SALE OF THE FRANCHISE BE
DELIVERED TOGETHER WITH A COPY OF THE DISCLOSURE DOCUMENT.
4.
You must sign a general release i f you renew or transfer your franchise. California
Corporations Code Section 31512 voids a waiver of your rights under the Franchise Investment Law
(Califomia Corporations Code Sections 31000 through 31516). Business and Professions Code Section
20010 voids a waiver of your rights under the Franchise Relations Act (Business and Professions Code
Sections 20000 through 20043).
5.
Section 31125 of the Califomia Corporations Code requires us to give you a disclosure
document, in a form containing the information that the commissioner may by rule or order require,
before a solicitation of a proposed material modification of an existing franchise.
DALO 1:44533flt^ll954S71
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ADDENDUM TO THE CICI ENTERPRISES, LP
FRANCHISE DISCLOSURE DOCUMENT
FOR THE STATE OF ILLINOIS
1.
Item 17 is amended as follows:
(a)
Item 17g. is amended as follows:
(1)
The phase "24 hours of misuse of the Marks" is replaced to read as
follows: "72 hours of misuse of the Marks"; and
(2)
The phase "24 hours for failure to have a certified Manager on duty at
all times" is replaced to read as follows: "72 hours for failure to have a certified Manager on duty at all
times"
(b)
The state statute cites referenced in the second paragraph that directly follows
the Item 17 tables are deleted in their entirety.
2.
Item 19 (Exhibit H) is amended by adding the following:
"Your accountant can help you develop your own estimated costs for your Restaurant.
Company-owned Restaurant data is not an indication of how your Restaurant will
perform."
"As indicated in the notes to the Table of Sales and Average Costs and Expenses for
Company-Owned Restaurants, franchised Restaurants will have certain additional or
different costs not present in our Company-owned Restaurants.
Note 3 states that we may negotiate quantity discounts on food and beverage products for
our Company-owned Restaurants. Those quantity discounts may not be available to
franchised Restaurants.
Note 5 states that management costs for franchised Restaurants may be different from
Company-owned Restaurants.
Note 6 states that insurance and benefits costs for Company-owned Restaurants may be
less than the insurance and benefits costs that franchised Restaurants will incur.
Note 12 states that there are certain costs that franchised Restaurants will incur which
Company-owned Restaurants do not share, including a monthly royalty of 4% of Gross
Sales, professional fees, financing costs, and other costs."
ADDENDUM TO THE CICI ENTERPRISES, LP
FRANCHISE DISCLOSURE DOCUMENT
FOR THE STATE OF MARYLAND
(a)
The Summary column for Items 17.v., "Choice of Forum" (Franchise Agreement chart)
is amended as follows:
"Except for any rights a franchisee has under the Maryland Franchise Registration and
Disclosure Law to bring suit in Maryland for claims arising under the Law, mediation of
disputes which are subject to mediation will be held at our corporate headquarters.
Venue for all proceedings arising under the Franchise Agreement is the state, county or
judicial district where our principal place of business is located, unless otherwise
brought by us, provided that the franchisee may bring suit in Maryland for claims under
the Maryland Franchise Registration and Disclosure Law."
(b)
The Summary column for Items 17. v., "Choice of Forum" (Development Agreement
chart) is amended as follows:
"Except for any rights a developer has under the Maryland Franchise Registration and
Disclosure Law to bring suit in Maryland for claims arising under the Law, mediation of
disputes which are subject to mediation will be held at our corporate headquarters.
Venue for all proceedings arising under the Development Agreement is the state, county
or judicial district where our principal place of business is located, unless otherwise
brought by us, provided that the developer may bring suit in Maryland for claims under
the Maryland Franchise Registration and Disclosure Law."
(c)
Item 17.C., "Requirements for franchisee to renew or extend" (Franchise Agreement
chart) and Items I7.m. "Conditions for franchisor approval of transfer" (Franchise and Development
Agreement charts) are amended by the addition ofthe following:
"Under Maryland law, the general release required as a condition of renewal, sale, and/or
assignment/transfer does not apply to any liability under the Maryland Franchise
Registration and Disclosure Law."
(d)
Item 17 is amended to add the following note as the second paragraph at the end of that
Item:
"Any claims that Developer may have under the Maryland Franchise Registration and
Disclosure Law must be brought within 3 years after the grant of the franchise."
(e)
Item 17 is amended to add the following note as the third paragraph at the end of that
Item: .
"A provision in the Franchise Agreement which terminates the agreement upon your
bankmptcy may not be enforceable under Title 11, United States Code Section 101."
DALO 1 : t 4 5 m t ^ l 195457.1
079684.0103
ADDENDUM TO CICI ENTERPRISES, LP
FRANCHISE DISCLOSURE DOCUMENT
FOR THE STATE OF MICHIGAN
THE STATE OF MICHIGAN PROHIBITS CERTAIN UNFi\IR PROVISIONS
THAT ARE SOMETIMES IN FRANCHISE DOCUMENTS.
IF ANY OF THE
FOLLOWING PROVISIONS ARE IN THESE FRANCHISE DOCUMENTS, THE
PRO\TSIONS ARE VOID AND CANNOT BE ENFORCED AGAINST YOUi
(A)
A PROHIBITION ON THE RIGHT OF A FRANCHISEE TO JOIN AN
ASSOCIATION OF FRANCHISEES.
(B)
A REQUIREMENT TILVT A FR.\NCHISEE ASSENT TO A RELEASE,
ASSIGNMENT, NOVATION, WAITOR, OR ESTOPPEL WHICH DEPRIVES A
FRANCHISEE OF RIGHTS i\ND PROTECTIONS PROVIDED IN THIS ACT. THIS
SHALL NOT PRECLUDE A FRANCHISEE, AFTER ENTERING INTO A FRANCHISE
AGREEMENT, FROM SETTLING ANY .\ND ALL CLAIMS.
(€)
A PROVISION THAT PERMITS A FRANCHISOR TO TERMINATE A
FRANCHISE PRIOR TO THE EXPIRATION OF ITS TERM EXCEPT FOR GOOD
CAUSE. GOOD CAUSE SHALL INCLUI^E THE FAILURE OF THE FR.\NCHISEE TO
COMPLY WITH ANY LAWFUL PROVISION OF THE FI^\NCHISE AGREEMENT
AND TO CURE SUCH FAILURE AFTER BEING GIVEN WRITTEN NOTICE
THEREOF AND A REASONABLE OPPORTUNITY, WHICH IN NO E^^ENT NEED BE
MORE THAN 30 DAYS, TO CURE SUCH FAILURE.
(D)
A PROVISION TH.\T PERMITS A FRANCHISOR TO REFUSE TO
RENEW A FRANCHISE WTTHOUT FAIRLY COMPENSATING THE FRANCHISEE
BY REPURCIL\SE OR QTHER MEANS FOR THE FAIR M \ R K E T VALUE AT THE
TIME OF EXPIILVTION, OF THE FRANCHISEE'S INVENTORY, SUPPLIES,
EQUIPMENT, FIXTURES, AND FURNISHINGS.
PERSONALIZED MATERIALS
WHICH UAVE NO \^\LUE TO THE FRANCHISOR AND INVENTORY, SUPPLIES,
EQUIPMENT, FLXTURES, AND FURNISHINGS NOT REASONABLY REQUIRED IN
THE CONDUCT OF THE FR.\NCHISE BUSINESS ARE NOT SUBJECT TO
COMPENSATION. THIS SUBSECTION APPLIES ONLY IF: (•) TIIE TERM OF THE
FRVNCHISE IS LESS THAN 5 YEARS; .\ND (il) THE FR.\NCHISEE IS PROHIBITED
BY THE FILVNCHISE OR OTHER AGREEMENT FROM CONTINUING TO
CONDUCT—SUBST.\NTL\LLY—THE—SAME—BUSINESS UNDER ANOTHER
TRADEMARK, SER\TCE MARK, TRADE NAME, LOGOTYPE, ADVERTISING, OR
QTHER COMMERCLVL SYMBOL IN THE SAME .\REA SUBSEQUENT TO THE
EXPIRATION OF THE FR.\NCHISE OR THE FRVNCIHSEE DOES NOT RECEIVE
AT LEAST 6 MONTHS iVDVANCE NOTICE OF FRANCHISOR'S INTENT NOT TO
RENEW THE FRANCHISE.
(E)
A PROVISION T I L \ T PERMITS THE FIL\NCHISOR TO REFUSE TO
RENEW A FR.VNCHISE ON TERMS GENEIL\LLY AVAILABLE TO OTHER
FRANCHISEES—OF—THE—SAft^^—CLASS—OR—TYPE—UNDER—SIMILAR
CIRCUMSTANCES.
THIS SECTION DOES NOT REQUIRE A RENEW.\L
PROVISION.
DALOI :USim4J
079684.0103
(F)
A PRQ\TSION REQUIRING THAT ARBITRATION OR LITIGATION
BE CONDUCTED OUTSIDE THIS STATE. THIS SHALL NOT PRECLUDE THE
FRANCHISEE FROM ENTERING INTO AN AGREEMENT, AT THE TIME OF
ARBITRATION, TO CONDUCT ARBITRATION AT A LOCATION OUTSIDE THIS
STATE.
(G)
A PROVISION WHICH PERMITS A FRANCHISOR TO REFUSE TO
PERMIT A TRANSFER OF OWNERSHIP OF A FRANCHISE, EXCEPT FOR GOOD
CAUSE. THIS SUBDIVISION DOES NOT PREVENT A FRANCHISOR FROM
EXERCISING A RIGHT OF FIRST REFUSAL TO PURCHASE THE FRANCHISE.
GOOD CAUSE SHALL INCLUDE, BUT IS NOT LIMITED TOi
(i)
THE FAILURE OF THE PROPOSED TRANSFEREE TO ISIEET
THE FRANCHISOR'S THEN CURRENT REASONABLE QUALIFICATIONS OR
STANDARDS.
{it)
THE FACT THAT THE PROPOSED TRANSFEREE
COMPETITOR OF THE FRANCHISOR OR SUBFRANCHISOR.
IS A
(m)
THE UNWILLINGNESS OF THE PROPOSED TRANSFEREE TO
AGREE I N WRITING TO COI^IPLY WITH ALL LAWFUL OBLIGATIONS.
(iv)
THE FAILURE OF THE FR\NCHISEE OR PROPOSED
TRANSFEREE TO PAY ANY SUMS OWING TO THE FRANCHISOR OR TO CURE
ANY DEFAULT IN THE FRANCHISE AGREEMENT EXISTING AT THE TIME OF
THE PROPOSED TRANSFER.
^
A PROVISION THAT REQUIRES THE FRANCHISEE TO RESELL TO
THE FRANCHISOR ITEMS THAT .\RE NOT UNIQUELY IDENTIFIED WITH THE
FRANCHISOR. THIS SUBDIVISION DOES NOT PROHIBIT A PROVISION THAT
GRANTS TO A FRANCHISOR A RIGHT OF FIRST REFUSAL TO PURCHASE THE
ASSETS OF A FRANCHISE ON THE SAROE TERMS AND CONDITIONS AS A BONA
FIDE THIRD PARTV WILLING AND ABLE TO PURCHASE THOSE ASSETS, NOR
DOES THIS SUBDIVISION PROHIBIT A PROVISION THAT GRANTS THE
FR\NCHISOR THE RIGHT TO ACQUIRE THE ASSETS OF A FR.\NCHISE FOR THE
MARKET OR APPRAISED VALUE OF SUCH ASSETS IF THE FRANCHISEE HAS
BREACHED THE LAWFUL PRO\TSIONS OF THE FRANCHISE AGREEMENT AND
HAS FAILED TO CURE THE BREACH IN THE M\NNER PROVIDED IN
SUBDIVISION (C).
(I)
A P R 6 \ T S I 0 N W H I C H PERMITS THE FRANCHISOR TO DIRECTLY
OR INDIRECTLY CONVEY, ASSIGN, OR OTHERWISE TRANSFER ITS
OBLIGATIONS—TO—FULFILL CONTR.\CTUAL—OBLIGATIONS—TO—THEFRANCHISEE UNLESS PROVISION HAS BEEN MADE FOR PROVIDING THE
REQUIRED CONTR\CTUAL SERNTCES.
THE FACT THAT THERE IS A NOTICE OF THIS OFFERING ON FILE WITH
THE ATTORNEY GENERAL DOES NOT CONSTTTUTE APPROVAL,
RECOIMMENDATIQN, OR ENDORSEMENT BY THE ATTORNEY
G ENERAL.ADDENDUM TO THE CICI ENTERPRISES, LP
DALO 1:11S3201 11195457.I
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FRANCHISE DISCLOSURE DOCUMENT
FOR THE STATE OF NEW YORK
Item 3, "Litigation" is hereby amended by deleting the second to the last paragraph in
that Item and replacing it by the following language:
"Other than the above actions:
(1)
Neither we, any predecessor, any person identified in Item 2 above, nor any
affiliate offering franchises under our principal trademark has pending any
administrative, criminal or material civil action (or a significant number of civil
actions irrespective of materiality) alleging a violation of any franchise, antitmst
or securities law, fraud, embezzlement, fraudulent conversion, misappropriation
of property, unfair or deceptive practices, or comparable allegations.
(2)
Neither we, any predecessor, any person identified in Item 2 above, nor any
affiliate offering franchises under our principal trademark has been convicted of
a felony or pleaded nolo contendere to a felony charge or, within the ten-year
period immediately preceding the date of this disclosure document, has been
convicted of a misdemeanor or pleaded nolo contendere to a misdemeanor
charge or been held liable in a civil action by final judgment or been the subject
of a material complaint or other legal proceeding if such misdemeanor
conviction or charge or civil action, complaint or other legal proceeding involved
a violation of anyfi-anchise,anti fraud or securities law, fraud, embezzlement,
fraudulent conversion, misappropriation of property, unfair or deceptive
practices, misappropriation of property or comparable allegations.
(3)
Neither we, any predecessor any person identified in Item 2 above, nor any
affiliate offering franchises under our principal trademark is subject to any
currently effective injunctive or restrictive order or decree relating to franchises
or under any Federal, State or Canadian franchise, securities, antitrust, trade
regulation or trade practice law as a result of a concluded or pending action or
proceeding brought by a public agency, is subject to any currently effective order
of any national securities association or national securities exchange, as defined
in the Securities and Exchange Act of 1934, suspending or expelling such person
from membership in such association or exchange; or is subject to a currently
effective injunctive or restrictive order relating to any other business activity as a
result of an action brought by a public agency or department, including, without
limitation, actions affecting a license as a real estate broker or sales agent."
Item 4, "Bankmptcy" is hereby deleted in its entirety and the following language
substituted in lieu thereof:
"Neither we, nor any affiliate or predecessor or current officer or general
partner have during the 10 year , period immediately before the date of this
disclosure document (a) filed as a debtor (or had filed against it) a petition to
start an action under the U.S. Bankmptcy Code; (b) obtained a discharge of its
debts under the Bankruptcy Code; or (c) was a principal officer of a company or
a general partner in a partnership that either filed as a debtor (or had filed against
it) a petition to start an action under the U.S. Bankmptcy Code or that obtained a
DALO 1:1153201.11195457 1
079684.0103
--2-
discharge of its debts under the U.S. Bankmptcy Code during or within 1 year
after the officer or general partner of CiCi Enterprises, LP held this position with
the company or partnership."
Item 17, "Renewal, Termination, Transfer and Dispute Resolution" is amended in the
franchise and development agreement tables as follows:
(a)
By adding the following in the "Summary" column opposite category d.,
"Termination by franchisee":
"To the extent required by the New York General Business Law, you may
terminate the Agreement on any grounds available by law."
(b)
"Choice of law":
By adding the following in the "Summary" column opposite category w.,
"The foregoing choice of law should not be considered a waiver of any right
conferred upon you by the General Business Law of the State of New York,
Article 33"
DALO 1 :H5^t4112M5L
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-4-
ADDENDUM TO THE CICI ENTERPRISES, LP
FRANCHISE DISCLOSURE DOCUMENT
FOR THE STATE OF VIRGINIA
1.
In recognition of the restrictions contained in Section 13.1-564 of the Virginia
Retail Franchising Act, Item 17.h. of the Franchise Disclosure Document for CiCi Enterprises,
LP is supplemented by the following:
"Under Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a
franchisor to cancel a franchise without reasonable cause. I f any ground for default or
termination stated in the franchise agreement does not constitute "reasonable cause," as that term
may be defined in the Virginia Retail Franchising Act or the laws of Virginia, that provision may
not be enforceable."
New York Insert
(To be inserted immediately before the Acknowledgment of Receipt)
This Franchise Disclosure Document is amended by the addition of the following sentence:
Franchisor represents that this prospectus does not knowingly omit any material fact
or contain any untme statement of a material fact.
DALO 1:11532QMn95457.1
079684.0103
RECEIPT
This disclosure document summarizes certain provisions of the franchise agreement and other information in plain
language. Read this disclosure document and all agreements carefully.
If CiCi Enterprises, LP offers you a franchise, it must provide this disclosure document to you 14 calendar days
before you sign a binding agreement with, or make a payment to, the franchisor or an affiliate in connection with
the proposed franchise sale, or sooner if required by applicable state law. Applicable state law in (a) Connecticut,
Michigan, and Washington, require us to provide you the disclosure document at least 10 business days before you
sign a binding agreement with, or make a payment to, the franchisor or an affiliate in connection with the proposed
franchise sale and (b) Iowa, Maine, New York, Qldnhoma, and Rhode Island require us to provide you the
disclosure document the earlier of the first personal meeting or 10 business days before you sign a binding
agreement with, or make a payment to, the franchisor or an affiliate in connection with the proposed franchise sale.
If CiCi Enterprises, LP does not deliver this disclosure document on time or if it contains a false or misleading
statement, or material omission, a violation of federal law and state law my have occurred and should be reported
to the Federal Trade Commission, Washington , D.C. 20580 and any applicable state agency (See Attachment I).
The name, principal business address, and telephone number of the franchise seller offering the franchise is:
Principal Business Address
1080 W. Bethel Rd.
Coppell, Texas 75019
Name
Telephone Number
972-745-4200
Issuance date: March 25, 2011, as amended June 10, 2011.;^
I received a disclosure document dated March 25, 2011, as amended June 10, 2011.^
document included the following Exhibits and Attachments:
Exhibit A
Exhibit B
Exhibit B-1
Exhibit B-2
Exhibit C
Exhibit C-l
Exhibit C-2
Exhibit C-3
Exhibit D
Exhibit D-1
Exhibit E
Exhibit E-l
Exhibit F
Exhibit G
Exhibit H
Exhibit I
Exhibit J
Exhibit K
Exhibit L
Attachment I
Attachment II
Attachment
m
The disclosure
Financial Statements
Development Agreement And State Amendments
CiCi's To Go Addendum To Development Agreement
Incentive Program Amendments to Development Agreement
Franchise Agreement And State Amendments
CiCi's To Go Addendum To Franchise Agreement
Incentive Program Amendments to Franchise Agreement
Investment Program Amendment to Franchise Agreement
List Of Franchised CiCi's Pizza Restaurants
List Of Franchised CiCi's To Go Units
List Of CiCi's Pizza Restaurant Franchisees Who Have Left The System In The Last Fiscal Year
List Of CiCi's To Go Unit Franchisees Who Have Left The System In The Last Fiscal Year
Work Evaluation Agreement
Pow ers Of Attorney (For Leases, Telephone, Taxes And Internet)
Assignment Of Lease
Confidentiality Agreement (Manuals)
JMC Equipment Financing Documents (Promissory Note, Guaranty And Security Agreement)
Form of General Release
- Gift Card Program Consent for ACH Debits and Credits
Guidelines for Investment Program
List of State Administrators
Agents for Service of Process
State Addenda to the Disclosure Document
Dated:
Individually and as an officer of the company designated below or
of a company to be formed and designated below on formation
Printed Name:
Title:
DAL01:4tS6QS4x91194789.3
079684.0103
Company Name:
[Keep this page for your records]
DALO I :nSfi0j;4.9I194789.3
079684.0103
RECEIPT
This disclosure document summarizes certain provisions of the franchise agreement and other information in plain
language. Read this disclosure document and all agreements carefully.
If CiCi Enterprises, LP offers you a franchise, it must provide this disclosure document to you 14 calendar days
before you sign a binding agreement with, or make a payment to, the franchisor or an affiliate in connection with
the proposed franchise sale, or sooner if required by applicable state law. Applicable state law in (a) Connecticut,
Michigan, and Washington, require us to provide you the disclosure document at least 10 business days before you
sign a binding agreement with, or make a payment to, the franchisor or an affiliate in connection with the proposed
franchise sale and (b) Iowa, Maine, New York, Oldahoma, and Rhode Island require us to provide you the
disclosure document the earlier of the first personal meeting or 10 business days before you sign a binding
agreement with, or make a payment to, the franchisor or an afflliate in connection with the proposed franchise sale.
If CiCi Enterprises, LP does not deliver this disclosure document on time or if it contains a false or misleading
statement, or material omission, a violation of federal law and state law my have occurred and should be reported
to the Federal Trade Commission, Washington , D.C. 20580 and any applicable state agency (See Attachment I).
The name, principal business address, and telephone number of the franchise seller offering the franchise is:
Name
Principal Business Address
Telephone Number
1080 W. Bethel Rd.
972-745-4200
Coppell, Texas 75019
Issuance date: March 25. 2011. as amended June 10. 2011.26. 2012
The disclosure
I received a disclosure document dated March 25, 2011, as amended Juno 10, 2011.
document included the following Exhibits and Attachments:
Exhibit A
Exhibit B
Exhibit B-1
ExhibitB-2
Exhibit C
Exhibit C-l
Exhibit C-2
Exhibit C-3
Exhibit D
Exhibit D-1
Exhibit E
Exhibit E-1
Exhibit F
Exhibit G
Exhibit H
Exhibit I
Exhibit J
Exhibit K
Exhibit L
Attachment I
Attachment II
Attachment
m
Financial Statements
Development Agreement And State Amendments
CiCi's To Go Addendum To Development Agreement
Incentive Program Amendments to Development Agreement
Franchise Agreement And State Amendments
CiCi's To Go Addendum To Franchise Agreement
Incentive Program Amendments to Franchise Agreement
Investment Program Amendment to Franchise Agreement
List Of Franchised CiCi's Pizza Restaurants
List Of Franchised CiCi's To Go Units
List Of CiCi's Pizza Restaurant Franchisees Who Have Left The System In The Last Fiscal Year
List Of CiCi's To Go Unit Franchisees Who Have Left The System In The Last Fiscal Year
Work Evaluation Agreement
Powers-Qf-Attorney (FoF-Leascs,-Tclcphone,-Taxes-And-Internet)
Assignment Of Lease
Confidentiality Agreement (Manuals)
JMC Equipment Financing Documents (Promissory Note, Guaranty And Security Agreement)
Form of General Release
Gift Card Program Consent for ACH Debits and Credits
List of State Administrators
Agents for Service of Process
State Addenda to the Disclosure Document
Dated:
Individually and as an officer of the company designated below or
of a company to be formed and designated below on formation
Printed Name:
Title:
DALO1:1156051.91194789.3
079684.0103
Company Name:
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DALOl :14S60S4^il242Sia
079684.0103