Franchise Agreement

• Date: 19 March 2024
• Parties: Pretzel Time, Inc. doing business as Pretzel Time ("Pretzel Time", "FRANCHISOR"), Franchisee ("Franchisee")
• State: Pennsylvania
• Renewal Term: 5 years
• Section: Commercial Contracts

FRANCHISE AGREEMENT

TABLE OF CONTENTS

1. INTRODUCTION AND DEFINITIONS.......................................1

1.A. INTRODUCTION..............................................1

1.B. DEFINITIONS...............................................3

2. GRANT OF FRANCHISE RIGHTS..........................................7

2.A. GRANT OF FRANCHISE........................................7

2.B. PRINCIPAL OWNERS' GUARANTY................................7

2.C. TERRITORIAL RIGHTS........................................8

2.D. RESERVATION OF RIGHTS.....................................8

2.E. OPTION TO DEVELOP OTHER SITES WITHIN THE TERRITORY........9

2.F. TERM OF FRANCHISE.........................................9

3. OTHER DISTRIBUTION METHODS........................................10

3.A. SPECIAL DISTRIBUTION ARRANGEMENTS........................10

4. FRANCHISE AND OTHER FEES..........................................10

4.A. INITIAL FRANCHISE FEE....................................10

4.B. DEFERRAL OF FRANCHISE FEE................................10

4.C. ROYALTY FEE..............................................10

4.D. ADVERTISING FUND FEE.....................................11

4.E. TRANSFER FEE.............................................11

4.F. FEES FOR ADDITIONAL FRANCHISES...........................11

4.G. FEES FOR RENEWAL OF FRANCHISE............................12

4.H. PAYMENT BY ELECTRONIC FUNDS TRANSFER.....................12

4.I. LATE CHARGE AND INTEREST. ...............................12

5. RENEWAL OF FRANCHISE TERM.........................................13

5.A. FRANCHISEE'S RIGHT TO A SUCCESSOR FRANCHISE..............13

5.B. RELEASES.................................................14

5.C. NOTICES..................................................15

6. TRADEMARKS AND LIMITATIONS........................................15

6.A. OWNERSHIP OF MARKS.......................................15

6.B. DISCONTINUANCE OF USE OF MARKS...........................16

6.C. CORPORATE NAME...........................................16

6.D. TERMINATION..............................................17

6.E. TRADEMARK ENFORCEMENT....................................17

6.F. USE OF SERVICE MARK......................................17

7. SELECTION OF FRANCHISE LOCATION...................................18

7.A. SITE SELECTION...........................................18

7.B. LEASE....................................................18

7.C. RELOCATION...............................................20

8. DEVELOPMENT OF UNIT...............................................21

8.A. UNIT DESIGN SPECIFICATIONS AND CONSTRUCTION PLANS........21

8.B. DEVELOPMENT OF THE UNIT..................................21

8.C. EQUIPMENT, FIXTURES, FURNISHINGS, AND SIGNS..............22

8.D. EXCEPTIONS TO EQUIPMENT OR FURNISHINGS...................22

8.E. CONSTRUCTION ASSISTANCE..................................23

8.F. LIMITATION ON LIABILITY..................................23

9. UNIT OPENING......................................................24

9.A. COMMENCEMENT OF OPERATIONS...............................24

10. FRANCHISEE TRAINING...............................................24

10.A. INITIAL TRAINING.........................................24

10.B. EMPLOYEE TRAINING........................................25

10.C. ON-SITE TRAINING...........................................26

10.D. COMPANY GROWTH...........................................26

10.E. RETRAINING PROGRAMS......................................26

10.F. OTHER GUIDANCE...........................................26

11. ADVERTISING AND OTHER PROMOTIONS..................................27

11.A. PROVIDING OF ADVERTISING MATERIALS.......................27

11.B. CONTROL OF ADVERTISING PROGRAMS AND CONCEPTS.............27

11.C. SEGREGATION OF ADVERTISING FUND..........................28

11.D. SUSPENSION OF ADVERTISING FUND FEES......................29

11.E. FRANCHISEE'S REQUIRED ADVERTISING EXPENDITURES...........29

11.F. USE OF TRADEMARK REFERENCES AND APPROVAL...............

OF FRANCHISEE'S MARKETING..............29

12. ADHERENCE TO UNIFORM STANDARDS....................................30

12.A. STANDARDS AND OPERATIONS MANUAL..........................30

12.B. CONFIDENTIALITY OF OPERATIONS MANUAL.....................32

12.C. INCORPORATION OF OPERATIONS MANUAL INTO AGREEMENT........32

12.D. MODIFICATIONS/UPDATES OF OPERATIONS MANUAL...............33

13. UNIT IMAGE AND OPERATION..........................................33

13.A. CONDITION AND APPEARANCE OF UNIT.........................33

13.B. UNIT MENU..................................................35

13.C. ADHERENCE TO APPROVED ITEMS..............................35

13.D. EXCEPTION PROCESS........................................36

13.E. PROMOTIONAL ALLOWANCES.....................................37

14. FRANCHISEE OPERATIONS.............................................37

14.A. MANAGEMENT...............................................37

14.B. SUFFICIENT WORKING CAPITAL.................................38

14.C. FILING OF OPERATIONS AND SALES REPORTS.....................38

14.D. EMPLOYEE DRESS AND CUSTOMER SERVICE......................38

14.E. COMPLIANCE WITH LAWS AND GOOD BUSINESS PRACTICES...........38

14.F. PAYMENT OF TAXES.........................................39

14.G. SALE OF PRODUCT..........................................39

14.H. COOPERATION..............................................39

14.I. INSURANCE................................................39

14.J. SUGGESTED RETAIL PRICES..................................40

15. ACCOUNTING, REPORTS AND FINANCIAL STATEMENTS......................41

15.A. ESTABLISHMENT OF ACCOUNTING SYSTEM.........................41

15.B. MAINTENANCE OF RECORDS....................................41

16. AUDITS AND INSPECTIONS............................................42

16.A. AUDITS...................................................42

16.B. RIGHT OF ENTRY AND INSPECTION............................42

17. TRANSFER, ASSIGNMENT AND REPURCHASE. .............................43

17.A. BY PRETZEL TIME............................................43

17.B. BY FRANCHISEE..............................................43

17.C. CONDITIONS FOR APPROVAL OF TRANSFER........................44

17.D. TRANSFER TO A WHOLLY-OWNED CORPORATION...................45

17.E. FORMATION OF A CORPORATION.................................46

17.F. DEATH OR DISABILITY OF FRANCHISEE..........................47

17.G. PRETZEL TIME'S FIRST RIGHT OF REFUSAL....................47

17.H. PUBLIC OR PRIVATE OFFERINGS..............................48

18. TERMINATION OF AGREEMENT BY FRANCHISEE............................49

18.A. FRANCHISEE'S RIGHT TO TERMINATE............................49

19. DEFAULT AND TERMINATION...........................................50

19.A. EXACT AND COMPLETE PERFORMANCE REQUIRED....................50

19.B. DEFAULT AND RIGHT TO CURE................................50

19.C. EXTENSION OF NOTICE........................................50

19.D. REPEATED BREACHES..........................................50

19.E. EVENTS OF DEFAULT - 30 DAYS NOTICE - CURABLE DEFAULTS....51

19.F. EVENTS OF DEFAULT - IMMEDIATE TERMINATION - NO

RIGHT TO CURE............................................53

20. RIGHTS AND OBLIGATIONS OF PRETZEL TIME AND FRANCHISEE UPON TERMINATION

OR EXPIRATION OF THE FRANCHISE..................................56

20.A. AMOUNTS OWED...............................................56

20.B. DISCONTINUANCE OF MARKS..................................56

20.C. RETURN OF MATERIALS......................................57

20.D. TELEPHONE COMPANY........................................57

20.E. CONFIDENTIAL INFORMATION.................................58

20.F. LEASING..................................................58

20.G. COVENANT NOT TO COMPETE..................................58

20.H. PRETZEL TIME'S RIGHT TO PURCHASE ASSETS OF THE UNIT........59

21. RELATIONSHIP OF THE PARTIES/INDEMNIFICATION.......................60

21.A. EXCLUSIVE RELATIONSHIP...................................60

21.B. NO LIABILITY FOR ACTS OF OTHER PARTY.......................61

21.C. TAXES....................................................61

21.D. INDEMNIFICATION..........................................62

21.E. INDEPENDENT CONTRACTOR.....................................62

22. PROTECTION OF TRADE SECRETS.......................................63

22.A. CONFIDENTIAL INFORMATION...................................63

22.B. DISCLOSURE OF IDEAS AND NEW PROCEDURES.....................64

23. ENFORCEMENT.......................................................65

23.A. UNAVOIDABLE DELAYS.......................................65

23.B. RIGHTS OF PARTIES ARE CUMULATIVE.........................65

23.C. WAIVER OF OBLIGATIONS....................................65

23.D. CONTINUING OBLIGATIONS...................................66

23.E. INVALID OR UNENFORCEABLE PROVISIONS......................66

23.F. INJUNCTIVE RELIEF..........................................66

23.G. APPLICABLE LAW...........................................67

23.H. ENTIRE STATUS OF AGREEMENT...............................67

23.I. AMENDMENT OF AGREEMENT...................................67

23.J. HEIRS, SUCCESSORS AND ASSIGNS............................67

23.K. CONDITIONS AND CONTINGENCIES.............................67

23.L. WAIVER BY PRETZEL TIME...................................68

23.M. COSTS AND EXPENSES OF ENFORCEMENT........................68

23.N. RIGHTS OF PARTIES ARE CUMULATIVE ........................69

23.O. WAIVER OF JURY TRIAL.....................................69

23.P. WAIVER OF PUNITIVE DAMAGES.................................69

23.Q. EXCLUSIVE JURISDICTION.....................................69

23.R. LIMITATIONS OF CLAIMS....................................69

24. ACKNOWLEDGMENTS AND REPRESENTATIONS...............................70

25. CONSTRUCTION......................................................70

25.A. HEADINGS.................................................70

25.B. TERMINOLOGY................................................70

25.C. COUNTERPARTS.............................................71

25.D. REASONABLENESS.............................................71

26. SECURITY AGREEMENT................................................70

26.A. SECURITY INTEREST........................................71

26.B. DEFAULT REMEDIES UNDER U.C.C...............................72

27. NOTICES...........................................................72

27.A. DELIVERY OF NOTICES......................................72

EXHIBITS

FRANCHISE ACKNOWLEDGMENTS AND REPRESENTATIONS

STATEMENT . . . . . . . . . . . . . . . . . . . . . . .. A

PRINCIPAL OWNER, OTHER OWNERS, DESIGNATED PRINCIPAL

OWNERS, UNIT AND MANAGER, SUPERVISING OWNERS AND INITIAL

CAPITALIZATION . . . . . . . . . . . . . . . .. . . . B

PERMITTED COMPETITIVE BUSINESSES, FORM DEVELOPMENT

AGREEMENT (FOR SINGLE-UNIT FRANCHISES), IDENTITY OF

DEVELOPER AND DATE OR DEVELOPMENT AGREEMENT . . . .C

OWNER'S AND GUARANTOR'S UNDERTAKING AND ASSUMPTION OF

OBLIGATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . D

AUTHORIZATION AGREEMENT FOR PREARRANGED PAYMENTS (DIRECT DEBITS). E

UNIT SITE AGREEMENT . . . . . . . . . . . . . . . F

COLLATERAL ASSIGNMENT OF TELEPHONE NUMBERS AND LISTINGS . . G

MUTUAL CONFIDENTIALITY AGREEMENT . . .H

TCBY YOGURT PRODUCTS ADDENDUM . . . . . . I

FRAN.AGT 6.5.96

SATELLITE UNIT ADDENDUM . . . . . . . . . . . . . . J

RELEASE AGREEMENT . . . . . . . . . . . . . . K

THIRD PARTY ASSIGNMENT AGREEMENT . . . . . . . . . L

SUBLEASE . . . . . . . . . . . . . . . . . M

COLLATERAL ASSIGNMENT OF LEASE . . . . . . . . . N

PRETZEL TIME, INC.

FRANCHISE AGREEMENT

This agreement is made and entered into this day of , 19 (hereinafter

referred to as "Effective Date") by and between Pretzel Time, Inc., a

Pennsylvania corporation with its principal place of business at 4800

Linglestown Road, Suite 202, Harrisburg, Pennsylvania 17112 trading and doing

business as Pretzel Time (hereinafter referred to as Pretzel Time) and

Franchisee (as defined below) who hereby agrees to the following:

Franchisee:

,

a

,

with its principal address at:

NOW THEREFORE, in consideration of the mutual covenants herein

contained, and intending to be legally bound hereby, the parties agree as

follows:

1. INTRODUCTION AND DEFINITIONS.

1.A. INTRODUCTION.

Pretzel Time and its Affiliates (as defined below) have developed and

continue to develop methods of operating food service businesses, including the

food service business referred to in this Agreement as a Pretzel Time Unit

(defined below), which feature Products (defined below) for off premises

consumption. Pretzel Time has established quality products and services which

will continue to be a unique benefit to Pretzel Time and its Franchisees. In

addition to off-premises dining, Pretzel Time may, in its sole discretion, offer

to a Pretzel Time Unit the right to offer TCBY frozen yogurt and other TCBY

yogurt products. Pretzel Time Units operate at locations that feature a

distinctive food service format and Trade Dress (defined below) and utilize

distinctive business formats, specifications, employee selection and training

programs, signs, equipment, layouts, unit fronts, operation systems, recipes,