1.1 Approved Brand
“Approved Brand” means one or more restaurant brands that are officially licensed to Franchisor by each restaurant brand and are approved to be offered and their menu items to be sold at your Combo Kitchen.
1.2 Approved Location
“Approved Location” means the street address of the physical location approved in writing by Combo Kitchen for the operation of the Combo Kitchen Restaurant, You will operate under this Agreement, which shall be set forth in Exhibit A to this Agreement.
1.3 Brand Fund
“Brand Fund” means a fund established by Combo Kitchen for purposes of increasing brand awareness and national advertising.
1.4 Combo Kitchen Business or Combo Kitchen Restaurant
“Combo Kitchen Business”, “Combo Kitchen Restaurant”, or the “Restaurant” or the “Franchise Business” means the single Combo Kitchen business that Combo Kitchen authorized You to conduct under the Trade Name, Marks, and System within the Territory, at the Approved Location, under this Agreement that prepares and serves food, from a variety of restaurant brands approved by franchisor, from the Approved Location.
“Expiration” means expiration of the Term of this Agreement, the non-renewal of this Agreement.
1.6 Franchise Network
“Franchise Network” means the interdependent network composed of Combo Kitchen Restaurants, all Combo Kitchen franchisees, Combo Kitchen’s Related Parties, any other persons or business entities that Combo Kitchen has licensed to use the Trade Name, Marks, System, or any of them.
1.7 Good Standing
“Good Standing” means timely compliance by You and Your Related Parties with all provisions of this Agreement and the Manual, specifically including provisions for timely payment of amounts You owe to Combo Kitchen and its Related Parties.
1.8 Gross Revenues
“Gross Revenues” means the total selling price of all services and products sold including the total sales from all Approved Brands at or from your Combo Kitchen Business (not adjusted for credit card fees), including the full value of any gift certificate redeemed at your Combo Kitchen Business or coupon sold for use at your Combo Kitchen Business (fees retained by or paid to third-party sellers of such gift certificates or coupons are not excluded from calculation), and all income and revenue of every other kind and nature related to the Combo Kitchen Business operation, whether for cash or credit.
“Manual” means the confidential Operations Manual and all other manuals that Combo Kitchen will lend to You, or authorize You to use, during the term of this Agreement and that contains information, forms and requirements for the establishment and operation of the Combo Kitchen Restaurant, and for use of Combo Kitchen’s Trade Name and Marks, along with communications from Combo Kitchen to You, including, but not limited to, bulletins, e-mails, and text messages.
“Marks” means selected trademarks, service marks, trade dress, logotypes, slogans, and other commercial symbols licensed by Combo Kitchen to You under this Agreement and Marks from Approved Brands that are licensed to us to be used by you at your Combo Kitchen.
1.11 Operating Principal
“Operating Principal” means the managing shareholder, partner, or member that You must designate if you are a legal entity.
1.12 Proprietary Service
“Proprietary Service” means any product or service that is composed of or in accordance with
Combo Kitchen’s specifications or that bears or has been labeled with any of the Marks.
1.13 Related Party
“Related Party” or “Related Parties” means persons and companies affiliated with Combo Kitchen or You, as the context indicates, including, but not limited to, owners (as defined herein), general partners, limited partners, shareholders, or members, owning an interest in (i) Combo Kitchen or in You; (ii) corporations or limited liability companies in which Combo Kitchen or You have an interest; (iii) corporations or limited liability companies in which any person or entity owning an interest in You also has an interest; or (iv) officers, directors, members, or agents of Combo Kitchen or of You.
“Territory” means the area set forth in Exhibit A of this Agreement.
“Termination” means the termination of this Agreement under the circumstances described in Section 10 of this Agreement before the expiration of the Term.
“Transfer” means any direct or indirect transfer, pledge, encumbrance, sale, gift, hypothecation, mortgage, sublicense, transfer through bequest or inheritance, transfer in trust, divorce or by operation of law or by any other means, or disposition of (i) any of the rights granted under this Agreement (ii) any part of this Agreement, (in) any rights or privileges incidental to this Agreement, (iv) the Restaurant or any interest therein, or (v) any ownership interest in you, including, without limitation, any arrangement whereby you sell or pledge accounts receivable or any other assets of the Franchised Business (each a “Transfer”). Without limiting the foregoing the term, “Transfer” includes any sale, resale, pledge, encumbrance transfer or assignment of: (a) any fractional partnership ownership interest if You are a partnership (b) any membership interest in you if you are a limited liability company and (c) any beneficial or economic ownership interest in you, any transfer of any fractional portion of your voting stock, or any increase in the number of outstanding shares of your voting stock which results in a change of ownership, if you are a corporation.
1.17 Trade Name
“Trade Name” means the commercial names Combo Kitchen, individually or collectively.
“You” means the person or entity that is named as “You” in Section 1 of this Agreement. In addition, “You” means all persons or entities that succeed to Your interest by Transfer, other transfer, or operation of law.
2. GRANTING CLAUSE
2.1 Rights Reserved
Combo Kitchen retains all rights that are not expressly granted to you under this Agreement. Without limiting this broad retention, and without granting You any rights therein, Combo Kitchen shall have the right to:
(a) Offer Combo Kitchen franchises to others for any site within or outsider your Territory regardless of how close the site is to Your Territory;
(b) Develop, operate, and franchise others to operate, any business concept except a Combo Kitchen Restaurant at any place, including within the Territory, and use the Marks or any other trademarks owned, licensed, or developed by Combo Kitchen or its Affiliates in connection with those concepts, even if such concepts sell products and services similar to, the same as or competitive with, the Proprietary Services; and
(c) Merge with, acquire or be acquired by, any business of any kind under other systems and/or other marks, which business may offer, sell, operate or distribute and/or license others to offer, sell, operate and distribute goods and services through franchised or non-franchised businesses, at wholesale or retail, within and outside the Territory.
2.2 Term and Renewal
Except as otherwise provided herein the initial term of this Agreement shall commence on the Effective Date and shall expire on the date that is Five (5) years from the Effective Date
(the “Term Expiration Date”). You shall have the option to renew this Agreement for up to three (3), successive renewal terms (each a “Renewal Term”), with such Renewal Term being for a period of Five (5) years, or for the remainder of Your then-current lease term, whichever is shorter, subject to your satisfaction of the following conditions, all of which shall be met before each renewal:
(a) You and Your Related Parties are in Good Standing under this Agreement, and any other Agreement between Combo Kitchen and You, and You and Your Related Parties are in compliance with the Manual;
(b) You shall give Combo Kitchen written notice of Your election to renew not less than six (6) months nor more than twelve (12) months prior to the end of the then-current term;
(c) You and any Related Parties that have signed this Agreement shall have signed a copy of the then-current Franchise Agreement (except with respect to the renewal provisions thereof, which shall not supersede this Section 4.5) not less than thirty (30) days before the expiration of the then-current term, or thirty (30) days after You receive a signature-ready copy of the then-current Franchise Agreement from Combo Kitchen, whichever is later;
(d) You and Your Related Parties that are parties to this Agreement shall have executed a general release, in a form satisfactory to Combo Kitchen, of any and all claims against Combo Kitchen and its Related Parties affiliates successors and assigns and their respective directors, officers, shareholders, partners, agents, representatives, servants, and employees in their corporate and individual capacities, including, without limitation, claims arising under this Agreement, any other agreement between You and Combo Kitchen or its affiliates, and federal, state, and local laws and rules;
(e) You shall have paid a Renewal Fee of 10% of the initial franchise fee paid; and
The provisions of the standard Franchise Agreement in use by Combo Kitchen at the time of renewal may be materially different than those contained in this Agreement, including, but not limited to, provisions for increased royalties, advertising, and other fees. You hereby acknowledge and agree that Your right to renew this Agreement shall be contingent upon Your execution of the then-current form of Franchise Agreement and acceptance of the new provisions.
3. SERVICES TO FRANCHISEE
Combo Kitchen will lend You a Manual containing explicit instructions for use of the Marks, specifications for goods that will be used in or sold by the Combo Kitchen Restaurant, sample business forms, information on marketing, management, and administration methods developed by Combo Kitchen for use in the Combo Kitchen Restaurant, names of approved suppliers, and other information that Combo Kitchen believes may be necessary or helpful to You in Your operation of the Combo Kitchen Restaurant. Combo Kitchen will revise the Manual periodically, at its discretion to conform to the changing needs of the Franchise Network and will distribute updated pages containing these revisions to You from time-to-time. Alternatively, and in lieu of a hard copy of the Manual, Combo Kitchen may make available to You a Manual in electronic form that is accessible to you. Combo Kitchen will notify You of any updates to the Manual. You shall be responsible for immediately downloading and complying with the revised Manual.
Combo Kitchen may, but is not required to, provide you with electronic access to certain advertising materials, including in PDF format. These materials may include video and audiotapes, copy-ready print advertising materials, posters, banners and miscellaneous point-of-sale Items, and may be regional or national at Combo Kitchen’s sole discretion. Printing of any and all such materials shall be at your sole cost and expense. Combo Kitchen reserves the right to change the format in which it provides these materials to you in the future.
3.3 Approved Suppliers
Combo Kitchen has the absolute right to limit the suppliers with whom you may deal. Combo Kitchen will provide to You a list of the names and addresses of the approved suppliers who then-currently meet Combo Kitchen’s as well as our Approved Brands’ standards and specifications in the Manual. Combo Kitchen reserves the right to act as the only approved supplier for some or all of the Approved Products and Services and products You will purchase for Your Combo Kitchen Restaurant. Combo Kitchen reserves the right to charge a mark-up on any product or service sold to You. In advising You of suppliers who meet its standards and specifications, Combo Kitchen expressly disclaims any warranties or representations as to the condition of the goods or services sold by the suppliers, including, without limitation, expressed or implied warranties as to merchantability or fitness for any intended purpose. You agree to look solely to the manufacturer or the supplier of equipment or services for the remedy for any defect in the goods or services. Combo Kitchen reserves the right to change the list of approved suppliers from time-to-time, in its sole and absolute discretion.
Combo Kitchen may receive payments and/or other compensation from approved suppliers in any form on account of such suppliers dealing with You and/or other franchisees, and Combo Kitchen may use all amounts so received for any purpose Combo Kitchen deems appropriate. You acknowledge and agree that Combo Kitchen shall have the right to collect and retain all manufacturing allowances, marketing allowances, rebates, credits, monies, payments, or benefits (collectively. Allowances”) offered by suppliers to You or to Combo Kitchen or its affiliates based upon Your purchases of Proprietary Services, products and other goods and services. You assign to Combo Kitchen or its designee all of Your right, title and interest in, and to any and all such Allowances and authorize Combo Kitchen or its designee to collect and retain any or all such Allowances without restriction.
Combo Kitchen may, from time-to-time, revoke its approval of particular items, services, products or suppliers if Combo Kitchen determines, in its sole and absolute discretion. Upon receipt of notice of such revocation, You shall cease to offer, sell or use any disapproved item, products or services and You shall immediately cease to purchase from any disapproved supplier.
4. PAYMENTS BY FRANCHISEE
4.1 Method and Application of Payments
You shall pay your continuing weekly royalties (including minimum royalties), advertising fees, and all other fees you are required to pay to Combo Kitchen, in accordance with the procedures designated by Combo Kitchen, which procedures Combo Kitchen has the discretion to change at any time upon written notice to you. Payment of royalties and fees shall be made by electronic funds transfer or direct deposit.
At no time will You sell, encumber or assign any of Your revenue stream, which includes, but is not limited to, current or future customer charges, to any other party without the prior written consent of Combo Kitchen.
Combo Kitchen has the right to apply any payment it receives from You to any past due amount You owe to Combo Kitchen regardless of how You indicate the payment is to be applied. Combo Kitchen reserves the right to change the manner in which you pay any and all fees you are required to pay to Combo Kitchen at any time upon written notice to you.
4.2 When Payments Begin
Your obligation to pay continuing weekly royalties (or minimum royalties) and other fees begins on the date Your Restaurant opens for business, or one (1) month from the Effective Date of this Agreement, whichever is sooner.
Combo Kitchen has the right during normal working hours to audit Your books and records, including Your tax returns with respect to the Combo Kitchen Restaurant. If an audit discloses an underpayment of royalties, advertising, or other fees payable under this Agreement, You shall immediately pay these amounts to Combo Kitchen, together with accrued interest on the amount underpaid in accordance with Section 6.9 of this Agreement. In addition, if the underpayment exceeds two percent (2%) of the total royalty, advertising, or other fee payable for any period covered under the audit, You shall reimburse Combo Kitchen for all expenses actually incurred by Combo Kitchen in connection with the audit, including reasonable attorneys’ fees.
4.4 Training Fees and Costs
Combo Kitchen will not charge a fee for the initial training program for Your Operating Principal, manager, if any, if you are a legal entity, or You and your manager, if any, if you are an individual and up to two (2) additional Restaurant staff. However, if additional persons are trained, Combo Kitchen may charge a training fee of $250 per person, per day.
4.5 Transfer Fee
You shall pay to Combo Kitchen a transfer fee of twenty-five (25%) of the initial franchise fee , as a condition of, and prior to, any Transfer.
4.6 Interest on Late Payments
Any payment not received by Combo Kitchen when due will bear interest at eighteen percent (18%) per year or at the highest rate allowed by applicable law on the date when payment is due, whichever is less. Interest charges on late payments are intended to partially compensate Combo Kitchen for loss of use of the funds and for internal administrative costs resulting from late payment which would otherwise be difficult to measure precisely. The fact that such charges are imposed shall not be construed as a waiver of Combo Kitchen right to timely payment.
4.7 Priority of Payments
All fees paid in accordance with this Section 6, inclusive, shall be paid on a preferred priority basis, before the payment of operating and capital expenditures, including, but not limited to, rent, vendors, suppliers, distributors, advertisers, salaries, commissions, and in advance of all distributions and remunerations by You to Your Operating Principal and/or Related Parties.
5. OBLIGATIONS OF FRANCHISEE
5.1 Use of Trade Name and Marks
5.1.1 Permitted Use
You may use the Trade Name and Marks only in the operation of the Combo Kitchen Restaurant within the Territory in accordance with the terms and conditions of this Agreement and subject to the limitations specified by Combo Kitchen in the Manual or otherwise in writing. You shall not, under any circumstances, use the Trade Name or any of the Marks, including “Combo Kitchen,” in any manner, in the name of your corporation, limited liability company, partnership or other legal entity. You may not license any third party to use Combo Kitchen’s Trade Name and Marks. You may not use the Trade Name or Marks on the internet, in any electronic advertising or social media, including but not limited to on Facebook®, Twitter®, Instagram®, YouTube® or other similar electronic advertising or social media without our prior written consent. You may not use any other trade name or marks at the Approved Location, or in connection with the Combo Kitchen Restaurant, without the express written consent and direction of Combo Kitchen. You shall refrain from engaging in any action (or failing to take any action) that causes or could cause damage to the Marks, the System, or the goodwill associated with the Marks.
Combo Kitchen has invested substantial time, energy, and money in the promotion and protection of its Trade Name and Marks as they exist on the Effective Date. However, You and Combo Kitchen recognize that rights in intangible property such as the Trade Name and Marks are often difficult to establish and defend, and that changes in the cultural and economic environment within which the System operates or third-party challenges to Combo Kitchen rights in the Marks may make changes in the Trade Name and Marks desirable or necessary. Combo Kitchen therefore reserves the right to change its Trade Name and Marks (although it has no present intention to do so) and the specifications for each when Combo Kitchen believes that such changes will benefit the Franchise Network. Combo Kitchen will do this in a manner that minimizes cost to You. You agree that You shall promptly conform, at Your own expense, to any such changes. If we discontinue our relationship with any of the Approved Brands which are included in your Combo Kitchen, you shall promptly remove that brand and its menu offerings from your list of offerings and immediately remove all advertisements/branding (including listings with all delivery platforms) related to that Approved Brand. In this case, you will replace that with another Approved Brand without any additional Initial Franchise Fee.
5.1.2 Advertising Materials
You agree to submit to Combo Kitchen copies of all advertising materials that You propose to use at least two weeks before the first time they are broadcast or published. Combo Kitchen will review the materials within a reasonable time and will promptly notify You in writing as to whether it approves or rejects them. Combo Kitchen may not withhold its approval unreasonably. For purposes of this paragraph, advertising materials that differ from previously approved materials only in such variables as date or price will be considered to be previously approved. Even if Combo Kitchen approves specified materials, it may later withdraw its approval in its sole and absolute discretion, including, without limitation, if it reasonably believes this is necessary to make the advertising conform to changes in the System or to correct unacceptable features of the advertising, including any misrepresentation in the advertising material.
5.2 Quality Control
5.2.1 Compliance with Manual
You shall operate Your Combo Kitchen business in complete compliance with the standards and specifications, as set forth in the Manual, or otherwise in writing. Combo Kitchen may make changes to any of these standards and specifications, at any time, in Combo Kitchen’s sole and absolute discretion. Such changes may necessitate the purchase of equipment, supplies furnishings or other goods, completion of additional training by Your employees, or other cost to You. You shall promptly conform to the modified standards and specifications at Your own expense. You shall, at all times, keep Your copy of the Manual current (by, for example, inserting in it revised pages given to You by Combo Kitchen and deleting superseded pages, or downloading from Combo Kitchen’s website, the current version of the Manual upon notification of any revision to the Manual). If there is any dispute as to the requirements of the Manual at any point in time, the terms of the master copy of the Manual maintained by Combo Kitchen will control.
You shall at all times treat the Manual, any other manuals created for or approved for use in the operation of the Combo Kitchen Restaurant, and the information contained therein as confidential, and shall use all reasonable efforts to maintain such information as secret and confidential. Except for those portions of the Manual that Combo Kitchen designates, in writing, as appropriate for copying and use at the Combo Kitchen Restaurant, You shall not, at any time, copy, duplicate, record, or otherwise reproduce the foregoing materials, in whole or in part, nor otherwise make the same available to any third party without our prior written consent.
5.2.2 Required Products and Services
You must offer all of the products and services we designate for each Approved Brand you operate in your franchise. You must offer all menu items we or our Approved Brands designate for each Approved Brand you select to operate in your business. We have the right to modify these menu items from time-to-time, at our sole discretion. You may not offer or sell any other menu items, product or service without our prior written consent. You must use the proprietary and nonproprietary techniques, materials and supplies we designate in the Manual. You must provide all services (including Proprietary Services) in accordance with the standards and specifications set forth in the Manual. You must, at all times, maintain sufficient staff, materials and supplies to meet reasonably anticipated customer demand and your staff must be able to meet demands for all Approved Brands you operate in your franchise. If we discontinue our relationship with any of our Approved Brands or if we decide at our discretion not to offer an Approved Brand in our system, you agree to discontinue to offer menu items from that Approved Brands in your business and to remove all related marketing and advertising material related to that Approved Brand and to remove the Approved Brand from all food delivery platforms. We would offer you another Approved Brand to replace the Approved Brand being removed from your business at no additional cost.
(a) Approved Suppliers. We have the absolute right to limit the suppliers with whom you may deal. We may require you to purchase certain items, products, services, signs, furnishings, supplies, fixtures and equipment from us or distributors we have approved. Unless we specify otherwise in writing, you may be required to purchase all goods, items, products, equipment and services required for the development and operation of the Restaurant from our approved or designated suppliers. We have the right to designate one supplier for any given item or service. We may provide you with a list of suppliers, which list may change over time. While the suppliers included on this list may be mandated, approved and/or recommended, we reserve the right to change this list, from time-to-time, in our sole discretion. Notifications of changes to the approved suppliers list will be communicated to you through changes to the Manual or other written communications, including via electronic mail. We may revoke approval of suppliers in our sole and absolute discretion, at any time, upon written notice. We may become an approved supplier, and/or the only supplier, for any item, product, good and/or service at any time. We reserve the right to own an interest in any entity that will act as an approved supplier for any or all products and services You will use, offer and/or sell in the Combo Kitchen Restaurant.
(b) Right to Derive Income. We may derive income, consideration payments and other benefits on account of your purchase or lease of any products, services, supplies, equipment and/or other items from us or any supplier, including approved suppliers and/or designated suppliers. This income may be derived in any form, including as a rebate from various suppliers based on the quantity of System franchisee purchases. We may use these benefits for any purpose we deem appropriate. We are not obligated to remit any benefits to you and reserve the right to retain all such benefits.
(c) Modifications. We may modify our specifications and standards for any item or revoke our approval of any supplier or distributor who fails to adhere to our quality standards or other requirements. We may limit the number of potential suppliers that we consider for approval and, for some categories of products, we may designate a third-party or ourselves as an exclusive supplier.
NEITHER COMBO KITCHEN, ITS PARENTS OR AFFILIATES, MAKE ANY EXPRESS OR IMPLIED WARRANTIES REGARDING ANY ITEM OR SERVICE, AND COMBO KITCHEN AND ITS AFFILIATES EXCLUDE (AND EXPRESSLY DISCLAIM) ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, except as set forth in a particular written warranty, if any, provided in connection with a particular item or service.
(d) Further Restrictions. You shall not offer or sell any product, item or service we have not designated or expressly approved in writing without our prior written consent, which may be granted or withheld in our sole and absolute discretion. We reserve the right to sell products and services to you for a profit.
(e) Purchasing Programs, Promotional Programs. We may establish national or regional purchasing programs for the purpose of negotiating purchases of certain products and/or services from approved or designated suppliers. The purchasing programs may (but are not required to) benefit you by reducing prices, increasing reliability in supply, improving distribution, and establishing consistent pricing for reasonable periods to avoid market fluctuations. If a national and/or regional purchasing program is established for the region where your Franchised Business is located, you must participate in the program.
(f) Pricing. You must offer all Proprietary Services, products and services that we designate. We reserve the right to prohibit you from charging prices lower than our published prices for any service or item, to the maximum extent allowed by applicable law. We may also suggest pricing to you from time-to-time. We may change the types of authorized goods and services, and the prices for authorized goods and services sold by You in our sole discretion. There are no limitations on our right to make changes.
In an effort to advance the protection and enhancement of the Combo Kitchen brand and the Marks, Combo Kitchen and/or its designated agents or representatives may conduct periodic quality control and records inspections of the Combo Kitchen Restaurant at any time during the Term. Inspections may be made with or without prior notice. You shall take such steps as may be necessary to correct immediately any deficiencies detected during any such inspection. If any inspection reveals that you are not in compliance with any provision of this Agreement, the Manual, or any of Combo Kitchen’s standards and/or specifications, you shall be deemed in breach of your obligations under this Agreement and Combo Kitchen shall have the right to terminate this Agreement as provided under Section 10.2 of this Agreement, if you fail to cure the breach before the expiration of all applicable notice and cure periods. You further agree that You will reimburse Combo Kitchen for its representative’s time and travel expenses if an additional inspection at the Combo Kitchen Restaurant is required when a violation has occurred and You have not corrected the violation.
5.2.4 Computer System Requirements
You shall purchase and maintain a computer and point-of-sale system, as designated by Combo Kitchen (the “POS System”), to be used in the operation of the Combo Kitchen Restaurant and for reporting purposes. You shall comply with the following provisions relating to the POS System:
(a) You shall update and upgrade the POS System as designed by Combo Kitchen. Combo Kitchen may require you to enter into a separate maintenance and/or support agreement for your POS System, at any time, at your sole cost and expense;
(b) You shall record all sales at or from the Combo Kitchen Restaurant at the time of sale, in accordance with Combo Kitchen’s procedures, on the POS System;
(c) You shall comply with such requirements determined by Combo Kitchen, from time-to-time, regarding maintenance, training, storage and safeguarding of data, records, reports, and other matters relative to the POS System; and
(d) Combo Kitchen has the right to independently access any and all information on your POS System, at any time, without first notifying you. Without limiting the generality of the foregoing, you shall, at your sole cost and expense, permit Combo Kitchen immediate access to your POS System, electronically or otherwise, at all times, without prior notice to you. Combo Kitchen shall have the right to use the information accessed on the POS System in any manner Combo Kitchen determines, including the right to use any and all such information in Combo Kitchen’s Franchise Disclosure Document, and to share financial statements, including profit and loss statements, with other System franchisees.
COMBO KITCHEN MAKES NO WARRANTY OF ANY KIND, WHETHER EXPRESS OR IMPLIED, WITH REGARD TO ANY THIRD PARTY MATERIALS. COMBO KITCHEN DISCLAIMS ANY AND ALL WARRANTIES RELATED TO THE COMPUTER SYSTEM, WHETHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, INCLUDING BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY, INTEROPERABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, QUIET ENJOYMENT, OR THOSE ARISING FROM TRADE USAGE OR COURSE OF DEALING. COMBO KITCHEN DOES NOT WARRANT THAT THE COMPUTER SYSTEM WILL BE FREE FROM DEFECTS OR THAT USE OF THE COMPUTER SYSTEM WILL BE UNINTERRUPTED OR ERROR FREE.
IN NO EVENT WILL COMBO KITCHEN BE LIABLE FOR ANY INDIRECT, CONSEQUENTIAL, INCIDENTAL SPECIAL OR PUNITIVE DAMAGES (INCLUDING WITHOUT LIMITATION, ANY DAMAGES ASSOCIATED WITH LOSS OF USE, INTERRUPTION OF BUSINESS, LOSS OF DATA OR LOSS OF PROFITS) ARISING OUT OF OR IN ANY WAY RELATED TO THE COMPUTER SYSTEM OR ITS USE.
5.2.5 Data Security
You shall use your best efforts to protect your customers against any and all data breaches and cyber-events, including, without limitation, identity theft or theft of personal information (a “Data Security Breach”). If a Data Security Breach occurs, in the interest of protecting the goodwill associated with the Combo Kitchen brand and franchise system, Combo Kitchen hereby reserves the right to (but does not undertake the obligation to) directly or through its designee, perform or control any and all aspects of the response to such Data Security Breach, including, without limitation, the investigation, containment and resolution of the event and all communications with the franchise system, vendors and suppliers, customers, law enforcement agencies, regulatory authorities and the general public. You hereby acknowledge and agree that a Data Security Breach and/or any response to a Data Security Breach may impact operations of the Restaurant, including, without limitation, interruption in operations. You hereby acknowledge and agree that neither Combo Kitchen nor any of its parents, affiliates, subsidiaries, owners, officers, directors, or employees shall be liable to You for any damages arising out of or resulting from any Data Security Breach or any action or inaction in response to a Data Security Breach. You shall at all times be compliant with all Payment Card Industry Data Security Standards, any and all requirements imposed by all applicable payment processors and payment networks, including credit card and debit card processors, and any and all state and federal laws, rules and regulations relating to data privacy, data security and security breaches. You hereby acknowledge and agree that if Combo Kitchen engages or designates a third party service provider to administer a data security program, you will be required to comply with the requirements of such service provider. It is your responsibility to ensure that you operate the Restaurant at all times in compliance with all aforementioned laws, rules, regulations and requirements and you are strongly encouraged to engage legal, and data security professionals, including insurance providers to ensure your full compliance and adequate protection.
Recognizing the value of advertising, marketing, and promotion, and the importance of the standardization of advertising, marketing, and promotion programs to the furtherance of the goodwill and public image of the System, the parties agree as follows:
5.3.1 Local Advertising
You shall spend an amount equal to at least one percent (1%) of your Gross Revenues per month on local marketing, advertising and promotion in such manner as Combo Kitchen may, in its sole discretion, direct in the Manual or otherwise in writing from time-to-time. Upon Combo Kitchen’s request, You shall provide satisfactory evidence of its local advertising and promotion expenditures in such manner as Combo Kitchen shall direct in the manual or otherwise in writing from time-to-time.
5.3.2 Brand Fund Contribution
You shall pay to Combo Kitchen a fee to contribute to the expense of regional advertising, marketing and promotion undertaken by Combo Kitchen for the benefit of the System in accordance with the manual or as otherwise stated in writing from time-to-time. The Brand Fund has not been established yet but when it is established, with a 30 day notice to you, you are required to begin contributing an amount equal to one-percent (1%) of your Gross Revenues to this Fund.
Unless otherwise approved in writing by Combo Kitchen, You shall not establish a separate Website. However, Combo Kitchen shall have the right to require that You have one or more references or webpage(s), as designated and approved in advance by Combo Kitchen, within Combo Kitchen’s principal Website, which is currently www.combokitchen.com (“Our Website”). The term “Website” means an interactive electronic document contained in a network of computers linked by communications software, commonly referred to as the Internet or World Wide Web, including, but not limited to, any account, page, or other presence on a social or business networking media site, such as Facebook, Twitter, Linked In, and on-line blogs and forums (“Networking Media Sites”). Combo Kitchen shall have the right to require that You not have any Website other than the webpage(s), if any, made available on Our Website.
5.3.4 Changes to Technology
You acknowledge and agree that changes to technology are dynamic and not predictable within the term of this Agreement. In order to provide for inevitable but unpredictable changes to technological needs and opportunities, You agree that Combo Kitchen shall have the right to establish, in writing, reasonable new standards for the implementation of technology in the System; and You agree that You shall abide by those reasonable new standards established by Combo Kitchen as if this Agreement were periodically revised by Combo Kitchen for that purpose.
If you select to offer the menu items from the Approved Brands for your dine-in customers, then you shall permanently display, at Your own expense, in Your Combo Kitchen Restaurant, Combo Kitchen signs of any nature, form, color, number, location and size, and containing any legends, that Combo Kitchen has designated in the Manual or otherwise in writing. Combo Kitchen has the right to require you to change, modify, update upgrade and/or change any and all signs used in connection with the operation of your Combo Kitchen Restaurant at any time upon written notice to you.
5.4.1 Marketing Materials
All marketing and promotion by You shall be in such media and of such type and format as
Combo Kitchen may approve, shall be conducted in a dignified manner and shall conform to such standards and requirements as Combo Kitchen may specify. You shall not use any advertising or promotional plans or materials unless and until You have received written approval from Combo Kitchen You shall provide satisfactory evidence of Your local advertising and promotion expenditures in such as a manner as Combo Kitchen shall direct in the Manual or otherwise in writing from time-to-time. Combo Kitchen may make available to You, from time-to-time, at Your expense, such promotional materials, including newspaper mats, coupons, merchandising materials, point-of-purchase materials, special promotions, and similar advertising and promotional maters.
You acknowledge that periodic rebates, give-a-ways, and other promotions and programs are an integral part of the System. Accordingly, You, at your sole cost and expense, shall, from time-to-time, issue and offer such rebates, give-a-ways, and promotions, in accordance with any reasonable advertising programs established by Combo Kitchen, and shall further honor such rebates, give-a-ways, and promotions, issued by Combo Kitchen, as long as all of the above does not contravene regulations and laws of appropriate government agencies.
5.5 Financial Information
You shall record all sales and all receipts of revenue on individual serial-numbered receipts. Bank Deposits must validate all receipts. You shall retain daily sales reporting forms and accompanying records for at least three (3) years after the date of sale (or for a longer period if required by state or local law). You shall retain all other records and receipts used in the ordinary course of business. You shall furnish all records to Combo Kitchen upon request.
Upon our request and only if we cannot access your sales data, you shall submit to Combo Kitchen, on or before the fifteenth (15th) day following the end of each month, financial reports on the income and expenses of the Combo Kitchen Restaurant in the format specified in the Manual. You shall also submit to Combo Kitchen, at the time of filing, copies of all federal state and local income, sales, and property tax returns. Combo Kitchen will use this data to confirm that You are complying with Your obligations under this Agreement, and to formulate earnings and expense information for possible disclosure to prospective franchisees.
5.6.1 Minimum Insurance Requirements
You shall procure, prior to the commencement of any activities or operations under this Agreement, and shall maintain in full force and effect at all times during the term of this Agreement (and for such period thereafter as is necessary to provide the coverages required hereunder for events having occurred during the term of this Agreement), at Your expense, an insurance policy or policies protecting You, Combo Kitchen, and their respective officers, directors, partners, agents and employees against any demand or claim with respect to personal injury, death or property damage, business interruption, or any loss, liability or expense whatsoever arising or occurring upon or in connection with the Restaurant, including, but not limited to, comprehensive general liability insurance, property insurance (including, but not limited to, fire, vandalism, and malicious mischief insurance for the replacement value of the Combo Kitchen Restaurant and its contents), casualty insurance, business interruption insurance, statutory workers’ compensation insurance, employer’s liability insurance, product liability insurance, and automobile insurance coverage for all vehicles used in connection with the operation of Restaurant, if applicable. Such policy or policies shall be written by a responsible carrier or carriers acceptable to Combo Kitchen, shall name Combo Kitchen and its subsidiaries and affiliates as additional insureds, shall provide for Combo Kitchen to receive notice upon cancellation or any event of default, including non-payment, and shall provide at least the types and minimum amounts of coverage specified in the Manual. Combo Kitchen shall have the right, from time-to-time, to make such changes in minimum policy limits and endorsements in the Manual or otherwise in writing as it may determine in its reasonable discretion.
Your obligation to obtain and maintain the policy or policies in the amounts specified in the Manual shall not be limited in any way by reason of any insurance that may be maintained by
Combo Kitchen, nor shall Your performance of that obligation relieve you of liability under the indemnity provisions set forth in Section 8.5 of this Agreement.
5.6.3 Franchisor Entitled to Recover
All public liability and property damage policies shall contain a provision that Combo Kitchen, although not named as an insured, shall nevertheless be entitled to recover under such policies on any loss occasioned to Combo Kitchen or its agents or employees by reason of the negligence of You or your agents or employees.
5.6.4 Certificates of Insurance
Prior to the commencement of any operations under this Agreement, and thereafter at least thirty (30) days prior to the expiration of any policy, You shall deliver to Combo Kitchen Certificates of Insurance evidencing the proper types and minimum amounts of coverage. All Certificates shall expressly provide that no less than thirty (30) days’ prior written notice shall be given Combo Kitchen in the event of material alteration to or cancellation of the coverages evidenced by such Certificates.
5.6.5 Right to Procure Insurance
Should You, 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 Combo Kitchen in the Manual or otherwise in writing, Combo Kitchen shall have the right and authority (but not the obligation) to procure and maintain such insurance in Your name and to charge same to You, which charges, together with Our reasonable expenses in so acting, shall be payable by You immediately upon notice. The foregoing remedies shall be in addition to any other remedies Combo Kitchen may have under this Agreement, or at law or in equity.
5.7 Financial and Legal Responsibility
5.7.1 Compliance with Law
You shall comply with all federal, state and local laws and regulations pertaining directly or indirectly to the Combo Kitchen Restaurant. You shall keep current and legally compliant all licenses, permits, bonds, contracts, and deposits made to or required by any government agency in connection with the operation of the Combo Kitchen Restaurant. You are responsible for compliance with all requirements imposed by applicable law rule, or regulation.
6. RELATIONSHIP OF PARTIES
6.1 Interest in Marks and System
You expressly understand and acknowledge that: (a) Combo Kitchen (or its affiliate(s)) is the owner of all rights, title and interest in and to the Marks and the goodwill associated with and symbolized by them;
(b) the Marks are valid and serve to identify the System and those who are authorized to operate under the System; (c) neither You nor any principal of You shall directly or indirectly contest the validity of Combo Kitchen’s ownership of the Marks, nor shall You directly or indirectly, seek to register the Marks with any government agency; (d) your use of the Marks does not give You any ownership interest or other interest in or to the Marks, except the licensure granted by this Agreement; (e) any and all goodwill arising from Your use of the Marks shall inure solely and exclusively to Combo Kitchen’s benefit, and upon expiration or termination of this Agreement, and the license herein granted, no monetary amount shall be assigned or attributable to any goodwill associated with Your use of the System or the Marks; and (f) the right and license of the Marks granted hereunder to You is non-exclusive, and Combo Kitchen thus has and retains the rights, among others: (i) to use the Marks itself in connection with selling services, products and other; (ii) to grant other licenses for the Marks, in addition to those licenses already granted to existing franchisees; (iii) to develop and establish other systems using the same or similar Marks, or any other proprietary marks, and to grant licenses or franchises thereto without providing any rights therein to You; and (iv) to, from time-to-time, modify or delete existing Marks upon notice to You. You have absolutely no right to use any specific deleted mark owned or controlled by Combo Kitchen or its Affiliates.
6.2 Independent Status
It is expressly agreed that the parties intend by this Agreement to establish between you and
Combo Kitchen the relationship of franchisee and franchisor. It is further agreed that you have no authority to create or assume in Combo Kitchen’s name or on Combo Kitchen’s behalf any obligation express or implied or to act or purport to act as agent or representative on our behalf for any purpose whatsoever. Neither you nor Combo Kitchen is the employer, employee, agent, partner, fiduciary or co-venturer, of or with the other, each being independent. All employees and agents hired or engaged by or working for you will be only the employees or agents of yours and will not, for any purpose be deemed employees or agents of Combo Kitchen nor subject to Combo Kitchen’s control. Combo Kitchen has no authority to exercise control over the hiring or termination of your employees, independent contractors, agents or others who work for you, their compensation, working hours or conditions, or their day-to-day activities, except to the extent necessary to protect the brand and the Marks. You shall file your own tax, regulatory and payroll reports with respect to your employees, agents and contractors, and you shall save, indemnify and hold Combo Kitchen and its parents, affiliates, owners, officers, directors and subsidiaries harmless from any and all liability, costs and expenses, of any nature, that any such party incurs related to these obligations. You shall, in all respects, be an independent contractor and nothing in this Agreement is intended to constitute either party as an agent, legal representative, subsidiary, joint-venturer, joint-employer, partner, employee or servant of the other for any purpose whatsoever. Without limiting the foregoing, You are an independent legal entity and must make this fact clear in Your dealings with suppliers, lessors, government agencies, employees, customers and others. You and Combo Kitchen are completely separate entities and are not fiduciaries, partners joint-venturers, or agents of the other in any sense, and neither party has the right to bind the other. No act or assistance by either party to the other pursuant to this Agreement may be construed to alter this relationship. You are solely responsible for compliance with all federal, state, and local laws rules and regulations, and for complying with Combo Kitchen policies, practices, and decisions relating to the operation of the Combo Kitchen Restaurant. You shall rely on Your own knowledge and judgment in making business decisions, subject only to the requirements of this Agreement and the Manual. You may not expressly or implicitly hold Yourself out as an employee, partner, shareholder, member, joint-venturer or representative of Combo Kitchen, nor may You expressly or implicitly state or suggest that You have the right or power to bind Combo Kitchen, or to incur any liability on Combo Kitchen’s behalf. You may not use the Trade Name or Marks as part of Your corporate name limited liability company name or limited partnership name. There is no fiduciary duty between You and Combo Kitchen.
6.3 Display of Disclaimer
You shall conspicuously display a sign that states that “THIS COMBO KITCHEN RESTAURANT IS AN INDEPENDENTLY OWNED AND OPERATED FRANCHISED BUSINESS” within each Restaurant, business cards, client/customer agreements, stationery, purchase order forms, invoices, and other documents that You use in Your business dealings with suppliers, government agencies, employees and customers must clearly identify You as an independent legal entity.
You acknowledge and agree that the information, ideas, forms, marketing plans and other materials disclosed to You under this Agreement, whether or not included in the Manual, are confidential and proprietary information and trade secrets of Combo Kitchen. Any and all information, knowledge and techniques which Combo Kitchen designates as confidential shall be deemed confidential for purposes of this Agreement, except information which You can demonstrate came to Your attention prior to disclosure thereof by Combo Kitchen or which, at or after the time of disclosure by Combo Kitchen to You, had become or later becomes a part of the public domain, through publication or communication by others. You agree to maintain the confidentiality of all such material. You may not disclose any such information to any third-party, except to Your employees and agents, as necessary in the regular conduct of the Combo Kitchen Restaurant, and except as authorized in writing by Combo Kitchen. You shall be responsible for requiring compliance of Your Related Parties and employees with the provisions of this Section. You shall obtain signed Nondisclosure, Nonsolicitation and Noncompetition Agreements, in the form of Exhibit E to this Agreement, from Your Related Parties and employees, and send Combo Kitchen a copy of each such agreement upon demand.
You and your Related Parties agree to indemnify, defend and hold harmless us our affiliates, and our and their respective shareholders, members, directors, officers, employees, agents, successors, and assignees (the “Indemnified Parties”) against, and to reimburse any one or more of the Indemnified Parties for, all claims obligations, and damages directly or indirectly arising out of or related to your act or omission, the act or omission of any of your Related Parties, employees, agents or representatives, the Combo Kitchen Restaurant’s operation, the business you conduct under this Agreement, or your breach of this Agreement, including, without limitation, those alleged to be caused by the Indemnified Party’s negligence, unless (and then only to the extent that) the claims obligations, or damages are determined to be caused solely by our gross negligence or willful misconduct in a final, unappealable ruling issued by a court with competent jurisdiction. For purposes of this indemnification, claims include all obligations, damages (actual, consequential, or otherwise), and costs that any Indemnified Party reasonably incurs in defending any claim against it, including, without limitation, reasonable accountants , arbitrators, attorneys’ fees, and expert witness fees costs of investigation and proof of facts, court costs, travel and living expenses, and other expenses of litigation, arbitration, or alternative dispute resolution, regardless of whether litigation arbitration or alternative dispute resolution is commenced. Each Indemnified Party may defend any claim against it at your expense and agree to settlements or take any other remedial, corrective, or other actions. This indemnity will continue in full force and effect subsequent to and notwithstanding this Agreement’s expiration or termination. An Indemnified Party need not seek recovery from any insurer or other third-party, or otherwise mitigate its losses and expenses, in order to maintain and recover fully a claim against you under this subparagraph. You agree that a failure to pursue a recovery or mitigate a loss will not reduce or alter the amounts that an Indemnified Party may recover from you under this paragraph. Without limiting the foregoing, if Combo Kitchen is made a party to a legal proceeding in connection with Your act or omission, Combo Kitchen may hire counsel to protect its interests and bill You for all costs and expenses incurred by Combo Kitchen. You shall promptly reimburse Combo Kitchen for such costs and expenses.
6.6.1 In-Term Covenants
(a) During the Term, You shall not, directly or indirectly, for yourself or through, on behalf of, or in conjunction with any person or entity, own, maintain, operate, engage in, consult with, provide any assistance to, or have any interest (direct or indirect) in a Competitive Business (as defined below).
(b) You shall not divert or attempt to divert any business, client, or potential client of the Combo Kitchen Restaurant or any other System restaurant to any competitor, by direct or indirect inducement or otherwise, or to do or perform, directly or indirectly, any other act, injurious or prejudicial, to the goodwill associated with the Marks or the System.
The term “Competitive Business” shall mean any and all businesses that are competitive with
Combo Kitchen Restaurants, including, without limitation any business that operates a ghost kitchen concept, food hall or a quick-service restaurant serving foods similar to any of the menu items you serve that are included in any of the Approved Brands you operate in your business, or any similar food service business.
6.6.2 Post-Term Covenants
You may not, for a continuous, uninterrupted period commencing upon the expiration, transfer or termination of this Agreement (regardless of the cause for termination), and continuing for two (2) years thereafter, either directly or indirectly, for yourself, or through, on behalf of, or in conjunction with any person, persons (including your spouse or any immediate family member, or the spouse or any immediate family member of any personal guarantor of this Agreement), partnership, limited liability company or corporation, own, maintain, operate, engage in, provide any assistance to, or have any interest in, any Competitive Business that is located: (i) at the Combo Kitchen Restaurant; (ii) within twenty-five (25) miles of the Combo Kitchen Restaurant; or (iii) within twenty-five (25) miles of any other System restaurant located then in existence or under construction.
You agree that the length of time in Section 8.6.2 will be tolled for any period during which you are in breach of the covenant or any other period during which Combo Kitchen seeks to enforce this Agreement. The parties agree that the foregoing covenants shall be construed as independent of any other covenant or provision of this Agreement. If any court of competent jurisdiction determined that the geographic limits, time period or line of business defined by this Section 8 (inclusive of all subsections) is unreasonable, the parties agree that such a court of competent jurisdiction may determine an appropriate limitation to accomplish the intent and purpose of this Section and the parties, and each of them, agree to be bound by such determination.
7. TRANSFER OF FRANCHISE
7.1 Franchisor’s Right to Transfer
Combo Kitchen shall have the right to transfer or assign this Agreement and all or any part of its rights or obligations herein to any person or legal entity, and any designated assignee of Combo Kitchen shall become solely responsible for all obligations of Combo Kitchen under this Agreement from the date of assignment. You shall execute such documents or attornment, or other documents, as Combo Kitchen may request.
7.2 Franchisee’s Conditional Right to Transfer
You understand and acknowledge that the rights and duties set forth in this Agreement are personal to You, and that Combo Kitchen has granted this franchise in reliance of Your (or, if You are a corporation, partnership, or limited liability company, your principals) business skill, financial capacity and personal character. Accordingly, neither You nor any immediate or remote successor to any part of Your interest in this Agreement, nor any individual, partnership, limited liability company, corporation or other legal entity, which directly or indirectly owns any interest in You, shall sell, assign, transfer, convey, pledge, encumber, merge or give away (collectively, “transfer”) this Agreement, any direct or indirect interest in You, or in all or substantially all of the assets of the Franchise without prior written consent of Combo Kitchen Any purported assignment or transfer not having the written consent of Combo Kitchen, required by Section 9.3, shall be null and void and shall constitute a material breach of this Agreement, for which Combo Kitchen may immediately terminate without opportunity to cure pursuant to Section 10.2.1 of this Agreement. The foregoing remedies shall be in addition to any other remedies Combo Kitchen may have under this Agreement or at law or in equity.
7.3 Conditions of Transfer
Franchisee shall notify Combo Kitchen in writing of any proposed transfer of this Agreement, any direct or indirect interest in You, or in all or substantially all of the assets of Combo Kitchen Restaurant, at least thirty (30) days before such transfer is proposed to take place. Combo Kitchen shall not unreasonably withhold its consent to any transfer. Combo Kitchen may, in its sole discretion, require any or all of the following as conditions of its approval:
(c) That the transferor shall have executed a general release, in a form prescribed by Combo Kitchen, of any and all claims against Combo Kitchen and its affiliates, and their respective officers, directors, agents, shareholders, and employees;
(d) That the transferor (and, if the transferee is other than an individual, such owners of a beneficial interest in the transferee as Combo Kitchen may request) demonstrate to Combo Kitchen’s satisfaction that it meets Combo Kitchen’s educational, managerial and business standards; possesses a good moral character, business reputation and credit rating; has the aptitude and ability to operate the Combo Kitchen Restaurant (as may be evidenced by prior related business experience or otherwise); and has adequate financial resources and capital to operate the Combo Kitchen Restaurant, taking into consideration the purchase price paid by the transferee for the Combo Kitchen Restaurant; and has not operated a business in competition with Combo Kitchen;
(e) That (1) at Combo Kitchen’s option, (a) the transferee (and, if the transferee is other than an individual, such owners of a beneficial interest in the transferee as Combo Kitchen may request) enter into a written assignment, in a form satisfactory to Combo Kitchen, assuming and agreeing to discharge all of Your obligations under this Agreement, or (b) the transferee(s) execute, for a term ending on the expiration date of this Agreement and with such renewal term(s) as may be provided by this Agreement, the Combo Kitchen’s then-current form of Franchise Agreement and other ancillary agreements as Franchisor may require for the Combo Kitchen Restaurant, which agreements shall supersede this Agreement in all respects, and the terms of which may differ from the terms of this Agreement, including, without limitation, higher royalty fees, advertising contributions, or other fees, and a smaller or modified Territory, except that the transferee shall not be required to pay any initial franchise fee; and (2) the transferee’s principal guaranty the performance of all such obligations in writing in a form satisfactory to Combo Kitchen;
(f) That You remain liable for all of the obligations to Combo Kitchen in connection with the Combo Kitchen Restaurant which arose prior to the effective date of the transfer and execute any and all instruments reasonable requested by Combo Kitchen to evidence such liability;
(g) That the transferee (or, if the transferee is a corporation, partnership or limited liability company, a principal of the transferee acceptable to Combo Kitchen) and the transferee’s manager (if transferee or transferee’s principal will not manage the Combo Kitchen Restaurant), at the transferee’s expense, have successfully completed any training programs then in effect upon such terms and conditions as Combo Kitchen may reasonably require and pay Combo Kitchen the then-current training fee;
(h) Combo Kitchen approves the terms and conditions of the transfer agreement between transferor and transferee; and
(i) You pay to Combo Kitchen a transfer fee of twenty-five (25%) of the then-current franchise fee at the time of transfer or five percent (5%) of the sales price, whichever is greater; however, in the case of a transfer to a corporation or limited liability company formed by You for the convenience of ownership (as determined by Combo Kitchen in its sole discretion), no such transfer fee shall be required.
7.4 Death or Mental Incapacity
Upon the death, physical or mental incapacity of any person with an interest in this Agreement, in You, or in all or substantially all of the assets of the Restaurant, the executor, administrator, or personal representative of such person shall transfer such interest to a third party approved by Combo Kitchen within six (6) months after such death or mental incapacity. Such transfers, including, without limitation, transfers by devise or inheritance, shall be subject to the same conditions as any inter vivos transfer. In the case of transfer by devise or inheritance, if the heirs or beneficiaries of any such person are unable to meet the conditions in this Section 9, the executor, administrator, or personal representative of the decedent shall transfer the decedent’s interest to another party approved by Combo Kitchen within a reasonable time, which disposition shall be subject to all the terms and conditions for transfers contained in this Agreement. If the interest is not disposed of within a reasonable time, Franchisor may terminate this Agreement, pursuant to Section 10 hereof.
Combo Kitchen’s consent to a transfer of any interest in this Agreement, in You, or in all or substantially all of the assets of the Restaurant, shall not constitute a waiver of any claims it may have against the transferring party, nor shall it be deemed a waiver of Combo Kitchen’s right to demand exact compliance with any of the terms of this Agreement by the transferor or tranvsferee.
8. TERMINATION OF FRANCHISE
8.1 Termination by Consent of the Parties
This Agreement may be terminated upon the mutual consent of the parties.
8.2 Termination by Combo Kitchen
8.2.1 Immediate Termination upon Notice of Default
Upon the occurrence of any of the following defaults, Combo Kitchen may, at its option, terminate this Agreement effective immediately upon written notice to You:
(a) If You misuse the Trade Name, Marks or the System, or engage in conduct which reflects materially and unfavorably upon the goodwill associated with them, or if You use in the Combo Kitchen Restaurant any names, marks, systems, logotypes or symbols that Combo Kitchen has not authorized You to use.
(b) If You have any direct or indirect interest in the ownership or operation of any business other than the Combo Kitchen Restaurant that is confusingly similar to the Combo Kitchen Restaurant or uses the System or Marks, or if You fail to give Combo Kitchen a signed copy of the Nondisclosure, Nonsolicitation and Noncompetition Agreement, a form of which is attached hereto as Exhibit E for You (or if You are a corporation, all officers and shareholders, or, if You are a partnership, all Your general partners, or, if You are a limited liability company, all Your members) within ten (10) days after Combo Kitchen requests it.
(c) If You attempt to assign or Transfer Your rights under this Agreement in any manner not authorized by this Agreement.
(d) If You have made any material misrepresentations in connection with the acquisition of a Combo Kitchen Restaurant or to induce Combo Kitchen to enter into this Agreement.
(e) If You act without Combo Kitchen’s prior written approval or consent in regard to any matter for which Combo Kitchen’s prior written approval or consent is expressly required by this Agreement.
(f) If You cease to operate the Combo Kitchen Restaurant, unless (i) operations are suspended for a period of no more than one thirty (30) days, and (ii) the suspension is caused by fire, condemnation, or other act of God.
(g) If You fail to permanently correct a breach of this Agreement, or to meet the operational standards stated in the Manual, after being twice requested in writing by Combo Kitchen to correct a similar breach or meet a similar standard in any twelve (12) months period.
(h) If a threat or danger to public health or safety results from the construction, maintenance or operation of the Combo Kitchen Restaurant.
(i) Except as otherwise required by the United States Bankruptcy Code, if You become insolvent, are adjudicated a bankrupt, or file or have filed against You a petition in bankruptcy, reorganization, or similar proceeding.
(j) If You plead guilty to, plead no contest to, or are convicted of, a felony, a crime involving moral turpitude, or any other crime or offense that Combo Kitchen believes is reasonably likely to have an adverse effect on the System or Marks, the goodwill associated therewith, or Combo Kitchen’s interest therein.
(k) If You maintain false books or records, or submit any false reports to
(l) If You offer a product or service without Combo Kitchen’s consent, or fail to offer any product or service designated by Combo Kitchen.
8.2.2 Termination after Five Days’ Notice to Cure
Combo Kitchen may, at its option, terminate this Agreement, effective five (5) days after written notice is given to You, if You fail to make any payment when due under this Agreement or any other agreement between You and Combo Kitchen.
8.2.3 Termination after Thirty Days’ Notice to Cure
Upon the occurrence of any of the following defaults, Combo Kitchen may, at its option, terminate this Agreement after thirty (30) days’ notice to cure:
(a) If You fail to submit to Combo Kitchen in a timely manner any information You are required to submit under this Agreement.
(b) If You fail to begin operation of the Combo Kitchen Restaurant within the time limits as provided in this Agreement, or if You fail to operate your Combo Kitchen Restaurant in accordance with this Agreement and/or the Manual.
(c) If You default in the performance of any other obligation under this Agreement, or any other agreement with Combo Kitchen.
Under this Section 10.2.3, Combo Kitchen may terminate this Agreement only by giving written notice of termination stating the nature of such default to You at least thirty (30) days prior to the effective date of termination; provided, however, that You may avoid termination by immediately initiating a remedy to cure such default, curing it to Combo Kitchen’s satisfaction, and by promptly providing proof thereof to Combo Kitchen within the thirty (30) day period. 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 You effective immediately upon the expiration of the thirty (30) day period or such longer period as applicable law may require.
8.3 Rights and Obligations After Termination or Expiration
Upon termination of this Agreement for any reason, the parties will have the following rights and obligations:
(a) Combo Kitchen will have no further obligations under this Agreement.
(b) You shall give the final accounting for the Combo Kitchen Restaurant, pay Combo Kitchen within thirty (30) days after termination all payments due to Combo Kitchen, and return the Manual and any other property belonging to Combo Kitchen.
(c) You shall immediately and permanently cease to operate the Combo Kitchen Restaurant. You shall immediately and permanently stop using the Marks or any confusingly similar marks, the System, or any advertising, signs, stationery, or forms that bear identifying marks or colors that might give others the impression that You are operating a Combo Kitchen Restaurant, You shall refrain from any statement or action that might give others the impression that You are or ever were affiliated with the Combo Kitchen Franchise Network.
(d) You shall promptly sign any documents and take any steps that, in the judgment of Combo Kitchen, are necessary to delete Your listings from classified telephone directories, disconnect, or, at Combo Kitchen’s option, assign the Combo Kitchen all telephone numbers that have been used in the Combo Kitchen Restaurant, and terminate all other references that indicate You are or ever were affiliated with Combo Kitchen or a Combo Kitchen Restaurant. By signing this Agreement, You irrevocably appoint Combo Kitchen as Your attorney-in-fact to take the actions described in this paragraph if You do not do so Yourself within seven (7) days after termination of this Agreement. You further irrevocably assign Your telephone numbers listed on Exhibit A, or hereinafter acquired for the operation of Your Combo Kitchen Restaurant, to Combo Kitchen.
(e) You shall maintain all records required by Combo Kitchen under this Agreement for a period of not less than five (5) years after final payment of any amounts You owe to Combo Kitchen when this Agreement is terminated (or such longer period as required by applicable law).
(f) If Combo Kitchen declines to exercise the option, purchase, or assume the lease on Your equipment, You may sell it to either another Combo Kitchen franchisee or, with Combo Kitchen’s prior written approval, You may de-brand the equipment and sell it to a non-franchisee.
(g) You may not sell, or in any way divulge, the client list of Your Combo Kitchen Restaurant.
(h) Franchisee and its Related Parties shall abide by the post-termination restrictive covenants in Section 8.6 of this Agreement.
8.4 No Limitation of Remedies
No right or remedy conferred upon or reserved to Combo Kitchen (including as set forth in Section 10.3 above) is intended to be, nor shall be deemed exclusive of any other right or remedy herein or by law or equity provided or permitted, but each shall be cumulative of every other right or remedy. Nothing herein shall be construed to deprive Combo Kitchen of the right to recover damages as compensation for lost future profits. Termination of this Agreement will not end any obligation of either party that has come into existence before termination. All obligations of the parties which, by their terms, or by reasonable implication are to be performed in whole or in part after termination, shall survive termination.
9. MISCELLANEOUS PROVISIONS
9.1 Construction of Contract
Section headings in this Agreement are for reference purposes only and will not in any way modify the statements contained in any section of this Agreement. Each word in this Agreement may be considered to include any number or gender that the context requires.
9.2 Governing Law, Venue and Jurisdiction
This Agreement shall take effect upon its acceptance and execution by Combo Kitchen. Except to the extent governed by the United States Arbitration Act (9 U.S.C. § 1, et seq.), and the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C § 1050, et seq.), this Agreement, the franchise, and all claims arising from or in any way related to the relationship between Combo Kitchen, and/or any of its Related Parties, on the one hand, and you, and any of your owners, guarantors and/or affiliates, on the other hand, shall be interpreted and construed under the laws of the State of Florida, which laws shall prevail in the event of any conflict of law, except that any law regulating the sale of franchises or governing the relationship of a franchisor and its franchise, will not apply unless jurisdictional requirements are met independently without reference to this paragraph.
In the event the arbitration clause set forth in Section 11.8 is inapplicable or unenforceable, and subject to Combo Kitchen’s rights, as outlined in Section 11.9, the following provision shall govern: The parties hereby expressly agree that the Eleventh Circuit Court of Florida, or if such court lacks subject matter jurisdiction, the United States District Court for the Southern District of Florida, shall be the exclusive venue and exclusive proper forum in which to adjudicate any case or controversy arising out of or related to, either directly or indirectly, this Agreement, ancillary agreements, or the business relationship between the parties. The parties further agree that, in the event of such litigation, they will not contest or challenge the jurisdiction or venue of these courts. You acknowledge that this Agreement has been entered into in the State of Florida and that you are to receive valuable and continuing services emanating from Combo Kitchen’s headquarters in Florida. Without limiting the generality of the foregoing, the parties waive all questions of jurisdiction or venue for the purposes of carrying out this provision.
The parties to this Agreement shall direct any notices to the other party at the Delivery Address specified below that party’s name on the final page of this Agreement, or at another address if advised in writing that the address has been changed. The parties shall notify each other in writing of any Delivery Address changes. Notices may be delivered by facsimile (with simultaneous mailing of a copy by first class mail), by electronic mail (with simultaneous mailing of a copy by certified mail), courier, federal express, or first class mail. Notice by facsimile and electronic mail will be considered delivered upon submission, by courier, upon delivery, and by certified mail three days after posting. Any notice by a means which affords the sender evidence of delivery or rejected delivery, shall be deemed to have been given at the date and time of receipt or rejected delivery.
This Agreement may be amended only by a document signed by all of the parties to this Agreement or by their authorized agents.
9.5 No Waivers
No delay, waiver, omission or forbearance on the part of Combo Kitchen to exercise any right, option, duty, or power arising out of any breach of default by You under any of the terms, provisions, covenants, or conditions hereof shall constitute a waiver by Franchisor to enforce any such right, option, duty, or power as against You or as to subsequent breach or default by You. Subsequent acceptance by Combo Kitchen or any payments due to it hereunder shall not be deemed to be a waiver by Combo Kitchen of any preceding breach by You of any terms, provisions, covenants, or conditions of this Agreement.
This Agreement and all exhibits to this Agreement, constitute the entire agreement between the parties. This Agreement supersedes any and all prior negotiations, understandings representations and agreements. No representations have induced You to execute this Agreement with Combo Kitchen Except for those permitted to be made unilaterally by Combo Kitchen 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.
You acknowledge that you are entering into this Agreement as a result of your own independent investigation and not as a result of any representations made by Combo Kitchen, its members, managers, officers, directors, employees, agents, representatives or independent contractors that are contrary to the terms set forth in this Agreement. You further understand acknowledge and agree that any information you obtain from any Combo Kitchen franchisee, including relating to their sales, profit, cash flows, and/or expenses, does not constitute information obtained from Combo Kitchen, nor does Combo Kitchen make any representation as to the accuracy of any such information.
9.7 Negotiation and Mediation
Each Party agrees that before bringing an action in court against the other, the Parties must first meet to mediate the dispute (except as otherwise provided below). Any such mediation shall be non-binding. The Parties may mutually agree on a mediator and/or procedures and/or venue for mediation. Notwithstanding anything to the contrary, this Section 18 shall not bar either Party from obtaining judicial or injunctive relief for claims that are based solely on demands for money owed, or from obtaining injunctive relief against threatened conduct that will cause it loss or damages, under the usual equity rules, including the applicable rules for obtaining restraining orders and preliminary injunctions, without having to engage in mediation.
The non-binding mediation provided for under this Section 18 shall be commenced by the Party requesting mediation (the “complainant”) providing written notice of the request for mediation (the “request”) to the Party with whom mediation is sought (the “respondent”). The request shall specify with reasonable particularity the matter or matters on which non-binding mediation is sought.
Non-binding mediation commenced under this Section shall be concluded within sixty (60) days of the issuance of the request or such longer period as may be agreed upon by the parties in writing. All aspects of the mediation process shall be treated as confidential, shall not be disclosed to others, and shall not be offered or admissible in any other proceeding or legal action whatever. Complainant and respondent shall each bear its own costs of mediation, and each shall bear one-half the cost of the mediator or mediation service.
Except as provided in Section 11.9, and if not resolved by the negotiation and mediation procedures described in Section 11.7 above, any dispute, controversy, or claim between you and/or any of your Related Parties, on the one hand, and Combo Kitchen and/or any of Combo Kitchen’s Related Parties, on the other hand, including, without limitation, any dispute, controversy, or claim arising under, out of in connection with or related to: (a) this Agreement; (b) the relationship of the parties; (c) the events leading up to the execution of this Agreement; (d) any loan or other finance arrangement between you and Combo Kitchen or its Related Parties; (e) the parties’ relationship; (f) any System standard; (g) any claim based in tort or any theory of negligence; and/or (j) the scope or validity of the arbitration obligation under this Agreement, shall be determined in Miami-Dade County, Florida, by the American Arbitration Association (“AAA”). This arbitration clause will not deprive Combo Kitchen of any right it may otherwise have to seek provisional injunctive relief from a court of competent jurisdiction.
The arbitration will be administered by the AAA pursuant to its Commercial Arbitration Rules then in effect by one (1) arbitrator. The arbitrator shall be an attorney with substantial experience in franchise law. If proper notice of any hearing has been given, the arbitrator will have full power to proceed to take evidence or to perform any other acts necessary to arbitrate the matter in the absence of any party who fails to appear.
In connection with any arbitration proceeding, each party will submit or file any claim which would constitute a compulsory counterclaim (as defined by the then-current Rule 13 of the Federal Rules of Civil Procedure) within the same proceeding as the claim to which it relates. Any such claim which is not submitted or filed in such proceeding will be forever barvred.
Any arbitration must be on an individual basis and the parties and the arbitrator will have no authority or power to proceed with any claim as a class action, associational action, or otherwise to join or consolidate any claim with any claim or any other proceeding involving third-parties. If a court or arbitrator determines that this limitation on joinder of, or class action certification of claims is unenforceable then the agreement to arbitrate the dispute will be null and void and the parties must submit all claims to the jurisdiction of the courts in accordance with Section 11.8. The arbitration must take place in Miami-Dade County, Florida, or at such other location as Combo Kitchen designates.
The arbitrator must follow the law and not disregard the terms of this Agreement. The arbitrator may not consider any settlement discussions or offers that might have been made by either you or Combo Kitchen. The arbitrator may not, under any circumstance, (a) stay the effectiveness of any pending termination of this Agreement, (b) assess punitive or exemplary damages, (c) certify a class or a consolidated action, or (d) make any award which extends, modifies or suspends any lawful term of this Agreement, or any reasonable standard of business performance that Combo Kitchen sets. The arbitrator will have the right to make a determination as to any procedural matters as would a court of competent jurisdiction be permitted to make in the state in which the main office of Combo Kitchen is located. The arbitrator will also decide any factual, procedural, or legal questions relating in any way to the dispute between the parties, including, but not limited to, any decision as to whether Section 11.8 is applicable and enforceable as against the parties, subject matter, timeliness, scope, remedies, unconscionability, and any alleged fraud in the inducement.
The arbitrator can issue summary orders disposing of all or part of a claim, and provide for temporary restraining orders, preliminary injunctions, injunctions, attachments, claim and delivery proceedings, temporary protective orders, receiverships, and other equitable and/or interim/final relief. Each party consents to the enforcement of such orders, injunctions, etc., by any court having jurisdiction.
The arbitrator will have subpoena powers limited only by the laws of the State of Florida.
The parties ask that the arbitrator limit discovery to the greatest extent possible consistent with basic fairness in order to minimize the time and expense of arbitration. The parties to the dispute will otherwise have the same discovery rights as are available in civil actions under the laws of the State of Florida.
All other procedural matters will be determined by applying the statutory common laws and rules of procedure that control a court of competent jurisdiction in the state of Florida.
Other than as may be required by law, the entire arbitration proceedings (including but not limited to, any rulings, decisions or orders of the arbitrator), will remain confidential and will not be disclosed to anyone other than the parties to this Agreement.
The judgment of the arbitrator on any preliminary or final arbitration award will be final and binding and may be entered in any court having jurisdiction.
Combo Kitchen reserves the right, but has no obligation, to advance your share of the costs of any arbitration proceeding in order for such arbitration proceeding to take place and by doing so will not be deemed to have waived or relinquished Combo Kitchen’s right to seek recovery of those costs against you.
The Arbitrator shall render a reasoned award unless otherwise requested by the parties. If Combo Kitchen requests a more detailed award, i.e. “findings of fact and conclusions of law,” the parties shall evenly split the excess cost above the cost required for a reasoned award. However, if You request an award more detailed than a reasoned award, i.e. “findings of facts and conclusions of law,” You shall bear the entire additional cost required for such award, which cost is above the cost for a reasoned award.
Should Combo Kitchen prevail in any arbitration, the Arbitrator shall require You to pay all expenses of Arbitration, as well as Combo Kitchen’s attorneys’ fees and costs.
9.9 Exceptions to Arbitration and Mediation
Notwithstanding the provisions of Sections 11.7 and 11.8 of this Agreement, Combo Kitchen shall be entitled, with a bond of not more than $10,000, to the entry of temporary, preliminary and permanent injunctions, and orders of specific performance, enforcing the provisions of this Agreement in any court of competent jurisdiction relating to:
(a) Your, and/or any of Your Related Party’s use of the Marks; (b) Your confidentiality and non-competition covenants (Section 8); (c) Your obligations upon termination or expiration of the franchise; or (d) Transfer or assignment by You. If Combo Kitchen secures any such injunction (i.e. temporary restraining order, preliminary injunction, or permanent injunction) or order of specific performance, you agree to pay to Combo Kitchen an amount equal to the aggregate of Combo Kitchen’s costs of obtaining such relief including, without limitation, reasonable attorneys’ fees, costs of investigation and proof of facts, court costs, other litigation expenses, travel and living expenses, and any damages incurred by Combo Kitchen as a result of the breach of any such provision.
Further, at the election of Combo Kitchen or its affiliate, the mediation and arbitration provisions of Sections 11.7 and 11.8, inclusive of all subparts, shall not apply to:
(a) any claim by Combo Kitchen relating to your failure to pay any fee due to Combo Kitchen under this Agreement; and/or (b) any claim by Combo Kitchen or its affiliate relating to use of the Proprietary Marks and/or the System, including, without limitation, claims for violations of the Lanham Act; and/or (c) any claim by Combo Kitchen relating to a breach of your confidentiality and/or non-competition obligations under this Agreement.
9.10 Injunctive Remedy for Breach
You recognize that You are a member of a Franchise Network and that Your acts and omissions may have a positive or negative effect on the success of other businesses operating under Combo Kitchen’s Trade Name and in association with its Marks. Failure on the part of a single franchisee to comply with the terms of its Franchise Agreement is likely to cause irreparable damage to Combo Kitchen and to some or all of the other franchisees of Combo Kitchen. For this reason, You agree that if Combo Kitchen can demonstrate to a court of competent jurisdiction that there is a substantial likelihood of Your breach or threatened breach of any of the terms of this Agreement, Combo Kitchen will be entitled to an injunction restraining the breach or to a decree of specific performance, without showing or proving any actual damage and without the necessity of posting bond or other security, any bond or other security being waived hereby. Franchisor has the exclusive right to seek relief pursuant to this section in a court of competent jurisdiction as defined in section 11.2.2 of this Agreement or any other court of competent jurisdiction. Notwithstanding, if any Court of competent jurisdiction, as described herein, determines that a bond or other security is required, You agree that you will not seek bond or security in excess of $10,000 and, in fact, will oppose any effort by a Court to impose a bond or security in excess of $10,000.
9.11 Limitations of Actions
You may not maintain an arbitration against the Franchisor or its Related Parties unless: (a) You deliver written notice of any claim to the other party within one hundred eighty (180) days after the event complained of becomes known to You, or when you should have known of said event had you been reasonably diligent; (b) thereafter, You must follow the negotiation and mediation procedures described above; and (c) You file an arbitration within one (1) year after the notice is delivered. While this Section 11.11 may limit the applicable statute of limitations, it is not intended to extend any applicable statute of limitation in any way. The limitations set forth in this Section 11.11 shall not apply to Combo Kitchen, its affiliates or its Related Parties.
9.12 Attorneys’ Fees and Costs
If legal action or arbitration is necessary, including any motion to compel arbitration, or action on appeal, to enforce the terms and conditions of this Agreement, or for violation of this Agreement, Combo Kitchen will be entitled to recover reasonable compensation for preparation, investigation costs, court costs, arbitral costs, and reasonable accountants, attorneys, attorneys’ assistants, and expert witness fees incurred by Combo Kitchen. Further, if Combo Kitchen is required to engage legal counsel in connection with any failure by You to comply with this Agreement, You shall reimburse Combo Kitchen for any of the above-listed costs and expenses incurred by Combo Kitchen, regardless of whether Combo Kitchen files or compels mediation, arbitration or litigation.
Except as expressly provided to the contrary herein, each portion, section, part term, and/or provision of this Agreement shall be considered severable, and if for any reason, any section, part, term, and/or provision herein 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, such shall not impair the operation of or have any other effect upon, such other portions sections parts terms, and/or provisions of this Agreement as may remain otherwise intelligible, and the latter shall continue to be given full force and effect and bind the parties hereto, and said invalid portions, sections, parts, terms, and/or provisions shall be deemed not to be a part of this Agreement.
9.14 Individual Dispute Resolution – No Class Action or Multi-Party Actions
Any legal action between or among the parties to this Agreement and any of their Related Parties shall be conducted on an individual basis and not on a consolidated or class-wide basis.
9.15 Waiver of Rights
THE PARTIES HERETO AND EACH OF THEM KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY AGREE AS FOLLOWS:
Jury Trial. The parties hereto and each of them EXPRESSLY WAIVE(S) THE RIGHT ANY MAY HAVE TO A TRIAL BY JURY IN ANY ARBITRATION, ACTION, PROCEEDING, OR COUNTERCLAIM, WHETHER AT LAW OR IN EQUITY, INCLUDING, WITHOUT LIMITATION, FOR ANY CLAIMS RELATING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT, THE NEGOTIATION OF THIS AGREEMENT, THE EVENTS LEADING UP TO THE SIGNING OF THIS AGREEMENT, OR THE BUSINESS RELATIONSHIP RELATING TO THIS AGREEMENT OR THE FRANCHISE, WHETHER BROUGHT IN STATE OR FEDERAL COURT, WHETHER BASED IN CONTRACT THEORY, NEGLIGENCE OR TORT, AND REGARDLESS OF WHETHER OR NOT THERE ARE OTHER PARTIES IN SUCH ACTION OR PROCEEDING. This waiver is effective even if a court of competent jurisdiction decides that the arbitration provision in Section 11.8 is unenforceable. Each party acknowledges that it has had full opportunity to consult with counsel concerning this waiver, and that this waiver is informed, voluntary, intentional, and not the result of unequal bargaining power.
Damages Waiver. The parties hereto and each of them EXPRESSLY WAIVE(S) ANY CLAIM FOR PUNITIVE, MULTIPLE AND/OR EXEMPLARY DAMAGES, except that this waiver and limitation shall not apply with respect to (a) your obligation to indemnify Combo Kitchen pursuant to any provision of this Agreement, and/or (b) any claims Combo Kitchen brings against you and/or your guarantors for unauthorized use of the Marks, unauthorized use or disclosure of any Confidential Information, unfair competition, breach of the non-competition covenant and any other cause of action under the Lanham Act and Combo Kitchen shall be entitled to receive an award of multiple damages, attorneys’ fees and all damages as provided by law.
The parties hereto and each of them EXPRESSLY AGREE(S) THAT IN THE EVENT OF ANY FINAL DETERMINATION ADJUDICATION OR APPLICABLE ENACTMENT OF LAW THAT PUNITIVE MULTIPLE AND/OR EXEMPLARY DAMAGES MAY NOT BE WAIVED, ANY RECOVERY BY ANY PARTY IN ANY ARBITRATION OR OTHER FORUM SHALL NEVER EXCEED TWO (2) TIMES ACTUAL DAMAGES, except that COMBO KITCHEN may recover more than two (2) times its actual damages if you commit acts of willful trademark infringement or otherwise violate the Lanham Act, as provided by law.
You hereby expressly waive any and all rights, actions or claims for relief under the Federal Act entitled “Racketeer Influenced and Corrupt Organizations,” 18 U.S.C. § 1961, et seq. (“RICO”).
You hereby expressly agree that the existence of any claims You may have against Combo Kitchen or its Related Parties, whether or not arising from this Agreement, shall not constitute a defense to the enforcement by Combo Kitchen of the covenants contained in this Agreement. You agree to pay all costs and expenses, including reasonable attorneys’ fees, incurred by Combo Kitchen in connection with the enforcement of any covenant contained in this Agreement.
9.16 Approval and Guaranty Provision
If You are a corporation, all officers and shareholders, or, if You are a partnership, all Your general partners, or, if You are a limited liability company, all Your members, shall approve this Agreement, permit You to furnish the financial information required by Combo Kitchen, and agree to the restrictions placed on them including restrictions on the transferability of their interests in the franchise and the Combo Kitchen Restaurant and limitations on their rights to compete, and sign separately a Guaranty, guaranteeing Your payments and performance. Where required to satisfy our standards of creditworthiness, or to secure the obligations made under this Agreement, Your spouse or the spouses of Your Related Parties, may be asked to sign the Guaranty. Our form of Guaranty appears as Exhibit C to this Agreement.
9.17 Acceptance by Combo Kitchen
This Agreement will not be binding on Combo Kitchen unless and until an authorized management officer of Combo Kitchen has signed it.
9.18 Disclaimer of Representations
NO SALESPERSON, REPRESENTATIVE OR OTHER PERSON HAS THE AUTHORITY TO BIND OR OBLIGATE US EXCEPT OUR AUTHORIZED MANAGEMENT OFFICER BY A WRITTEN DOCUMENT. YOU ACKNOWLEDGE THAT NO REPRESENTATIONS, PROMISES INDUCEMENTS, GUARANTEES OR WARRANTIES OF ANY KIND WERE MADE BY US OR ON OUR BEHALF WHICH HAVE LED YOU TO ENTER INTO THIS AGREEMENT. YOU UNDERSTAND THAT WHETHER YOU SUCCEED AS A FRANCHISEE IS DEPENDENT UPON YOUR EFFORTS, BUSINESS JUDGMENTS, THE PERFORMANCE OF YOUR EMPLOYEES, MARKET CONDITIONS AND VARIABLE FACTORS BEYOND OUR CONTROL OR INFLUENCE. YOU FURTHER UNDERSTAND THAT SOME FRANCHISEES ARE MORE OR LESS SUCCESSFUL THAN OTHER FRANCHISEES AND THAT WE HAVE MADE NO REPRESENTATION THAT YOU WILL DO AS WELL AS ANY OTHER FRANCHISEE. YOU UNDERSTAND THAT COMBO KITCHEN IS NOT A FIDUCIARY AND HAS NO SPECIAL RESPONSIBILITIES BEYOND THE NORMAL RESPONSIBILITIES OF A SELLER IN A BUSINESS TRANSACTION.
The undersigned acknowledges receipt of this Agreement before execution of this Agreement or Your payment of any monies to us refundable or otherwise.
9.20 Opportunity for Review by Your Advisors
You acknowledge that we have recommended, and that You have had the opportunity to obtain a review of this Agreement by Your lawyer, accountant or other business advisor before execution hereof.
9.21 Execution of Agreements
Each of the undersigned parties warrants that it has the full authority to sign this Agreement. If You are a partnership, limited liability company or corporation, the person executing this agreement on behalf of such partnership, limited liability company or corporation warrants to us, both individually and in his capacity as partner member, manager or officer, that all of the partners of the partnership all of the members or managers of the limited liability company, or all of the shareholders of the corporation, as applicable, have read and approved this Agreement, including any restrictions which this Agreement places upon rights to transfer their interest in the partnership limited liability company or corporation.
9.22 Independent Investigation
You acknowledge that You have conducted an independent investigation of the franchised business contemplated by this Agreement and recognize that it involves business risks which make the success of the venture largely dependent upon Your business abilities and efforts. You acknowledge that You have been given the opportunity to clarify any provision of this Agreement that You may not have initially understood and that we have advised You to have this Agreement reviewed by an attorney.
9.23 No Guarantee of Earnings
You understand that neither Combo Kitchen nor any of our representatives and/or agents with whom You have met have made and are not making any guarantees express or implied, as to the extent of Your success in Your franchised business, and have not and are not in any way representing or promising any specific amounts of earnings or profits in association with Your franchised business.
9.24 No Personal Liability
You agree that fulfillment of any and all of our obligations written in this Agreement, or based on any oral communications which may be ruled to be binding in a court of law, shall be Combo Kitchen’s sole responsibility and none of its agents, representatives, nor any individuals associated with it shall be personally liable to You for any reason.
9.25 Non-Uniform Agreements
Combo Kitchen makes no representations or warranties that all other agreements with Combo Kitchen System franchisees entered into before or after the Effective Date do or will contain terms substantially similar to those contained in this Agreement. You recognize, acknowledge and agree that Combo Kitchen may waive or modify comparable provisions of other Franchise Agreements granted to other System franchisees in a non-uniform manner.