MC Donalds Agreement
MC Donalds Agreement
and
(collectively “Franchisee”)
for the purpose of granting the Franchisee the rights necessary to operate the Restaurant.
In consideration of the mutual rights and obligations contained herein WIMPY and Franchisee agree as
follows:
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(b) WIMPY holds the right to authorize the adoption and use of the WIMPY System at the
Restaurant. The rights granted to the Franchisee to operate the Restaurant are set forth in this Franchise, including
the Operator’s Lease (“Lease”) which is attached hereto as Exhibit A, incorporated in this Franchise.
(c) The foundation of the WIMPY System and the essence of this Franchise is the adherence
by Franchisee to standards and policies of WIMPY providing for the uniform operation of all WIMPY restaurants
within the WIMPY System including, but not limited to, serving only designated food and beverage products;
the use of only prescribed equipment and building layout and designs; strict adherence to designated food and
beverage specifications and to WIMPY prescribed standards of Quality, Service, and Cleanliness in the
Restaurant operation. Compliance by Franchisee with the foregoing standards and policies in conjunction with the
WIMPY trademarks and service marks provides the basis for the valuable goodwill and wide family acceptance of
the WIMPY System. Moreover, the establishment and maintenance of a close personal working relationship with
WIMPY in the conduct of Franchisee’s WIMPY restaurant business, Franchisee’s accountability for performance
of the obligations contained in this Franchise, and Franchisee’s adherence to the tenets of the WIMPY System
constitute the essence of this Franchise.
(d) The provisions of this Franchise shall be interpreted to give effect to the intent of the
parties stated in this paragraph 1 so that the Restaurant shall be operated in conformity to the WIMPY System
through strict adherence to WIMPY standards and policies as they exist now and as they may be from time to
time modified.
(e) Franchisee acknowledges Franchisee’s understanding of WIMPY basic business policy
that WIMPY will grant franchises only to those individuals who live in the locality of their WIMPY restaurant,
actually own the entire equity interest in the business of the Restaurant and its profits, and who will work full time
at their WIMPY restaurant business. Franchisee represents, warrants, and agrees that Franchisee actually owns the
complete equity interest in this Franchise and the profits from the operation of the Restaurant, and that Franchisee
shall maintain such interest during the term of this Franchise except only as otherwise permitted pursuant to the
terms and conditions of this Franchise. Franchisee agrees to furnish WIMPY with such evidence as WIMPY may
request, from time to time, for the purpose of assuring WIMPY that Franchisee’s interest remains as represented
herein.
(f) Franchisee agrees to pay to WIMPY all required payments under this Franchise,
including, without limitation, the payments set forth in paragraphs 8 and 9 herein and paragraph 3.01 of the Lease.
All payments hereby required constitute a single financial arrangement between Franchisee and WIMPY which,
taken as a whole and without regard to any designation or descriptions, reflect the value of the authorization being
made available to the Franchisee by WIMPY in this Franchise and the services rendered by WIMPY during the
term hereof.
2. Franchise Grant and Term.
(a) WIMPY grants to Franchisee for the following stated term the right, license, and
privilege:
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(i) to adopt and use the WIMPY System at the Restaurant;
(ii) to advertise to the public that Franchisee is a franchisee of WIMPY;
(iii) to adopt and use, but only in connection with the sale of those food and beverage
products which have been designated by WIMPY at the Restaurant, the trade names, trademarks, and service
marks which WIMPY shall designate, from time to time, to be part of the WIMPY System; and
(iv) to occupy the Restaurant as provided herein.
The rights granted under this Franchise are limited to the Restaurant’s location only.
(b) The term of this Franchise shall begin on and end on ,
unless terminated prior thereto pursuant to the provisions hereof.
3. General Services of WIMPY. WIMPY shall advise and consult with Franchisee periodically in
connection with the operation of the Restaurant and also, upon Franchisee’s request, at other reasonable times.
WIMPY shall communicate to Franchisee know-how, new developments, techniques, and improvements in areas
of restaurant management, food preparation, and service which are pertinent to the operation of a restaurant using
the WIMPY System. The communications shall be accomplished by visits by operations consultants, printed and
filmed reports, seminars, and newsletter mailings. WIMPY shall also make available to Franchisee all
additional services, facilities, rights, and privileges relating to the operation of the Restaurant which WIMPY
makes generally available, from time to time, to all its franchisees operating WIMPY restaurants.
4. Manuals. WIMPY shall provide Franchisee with the business manuals prepared for use by
franchisees of WIMPY restaurants similar to the Restaurant. The business manuals contain detailed information
including: (a) required operations procedures; (b) systems of inventory control; (c) bookkeeping and accounting
procedures; (d) business practices and policies; and (e) other management and advertising policies. Franchisee
agrees to promptly adopt and use exclusively the formulas, systems, and policies contained in the business
manuals, now and as they may be modified from time to time. Franchisee acknowledges that WIMPY or its
affiliates own all proprietary rights in and to the WIMPY System and that the information revealed in the business
manuals, in their entirety, constitute confidential trade secrets. Without the prior written consent of WIMPY,
Franchisee shall not disclose the contents of the business manuals to any person, except employees of Franchisee
for purposes related solely to the operation of the Restaurant, nor shall Franchisee reprint or reproduce the
manuals in whole or in part for any purpose except in connection with instruction of employees in the operation of
the Restaurant. Such manuals, as modified from time to time, and the policies contained therein, are incorporated
in this Franchise by reference.
5. Advertising. WIMPY employs both public relations and advertising specialists who formulate
and carry out national and local advertising programs for the WIMPY System.
Franchisee shall use only advertising and promotional materials and programs provided by
WIMPY or approved in advance, in writing, by WIMPY. Neither the approval by WIMPY of
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Franchisee’s advertising and promotional material nor the providing of such material by WIMPY to Franchisee
shall, directly or indirectly, require WIMPY to pay for such advertising or promotion.
Franchisee shall expend during each calendar year for advertising and promotion of the
Restaurant to the general public an amount which is not less than four percent (4%) of Gross Sales (as that term is
defined in paragraph 7) for such year. Expenditures by Franchisee to national and regional cooperative
advertising and promotion of the WIMPY System, or to a group of WIMPY restaurants which includes the
Restaurant, shall be a credit against the required minimum expenditures for advertising and promotion to the
general public.
6. Training. WIMPY shall make available to Franchisee the services of Hamburger University, the
international training center for the WIMPY System. Franchisee acknowledges the importance of quality of
business operation among all restaurants in the WIMPY System and agrees to enroll Franchisee and Franchisee’s
managers, present and future, at Hamburger University or at such other training center as may be designated by
WIMPY from time to time. WIMPY shall bear the cost of maintaining Hamburger University and any other
training centers, including the overhead costs of training, staff salaries, materials, and all technical training tools,
and agrees to provide to Franchisee both basic and advanced instruction for the operation of a WIMPY System
restaurant. Franchisee shall pay all traveling, living, compensation, or other expenses incurred by Franchisee and
Franchisee’s employees in connection with attendance at Hamburger University or such other training centers.
7. Gross Sales. For the purposes of this Franchise, the term “Gross Sales” shall mean all revenues
from sales of the Franchisee based upon all business conducted upon or from the Restaurant, whether such sales
be evidenced by check, cash, credit, charge account, exchange, or otherwise, and shall include, but not be limited
to, the amounts received from the sale of goods, wares, and merchandise, including sales of food, beverages, and
tangible property of every kind and nature, promotional or otherwise, and for services performed from or at the
Restaurant, together with the amount of all orders taken or received at the Restaurant, whether such orders be
filled from the Restaurant or elsewhere. Gross Sales shall not include sales of merchandise for which cash has
been refunded, provided that such sales shall have previously been included in Gross Sales. There shall be
deducted from Gross Sales the price of merchandise returned by customers for exchange, provided that such
returned merchandise shall have been previously included in Gross Sales, and provided that the sales price of
merchandise delivered to the customer in exchange shall be included in Gross Sales. Gross Sales shall not include
the amount of any sales tax imposed by any federal, state, municipal, or other governmental authority directly on
sales and collected from customers, provided that the amount thereof is added to the selling price or absorbed
therein and actually paid by the Franchisee to such governmental authority. Each charge or sale upon credit shall
be treated as a sale for the full price in the month during which such charge or sale shall be made, irrespective of
the time when the Franchisee shall receive payment (whether full or partial) therefor.
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8. (a) Service Fee. Franchisee shall pay a monthly service fee on or before the tenth (10th) day
of the following month in an amount equal to four percent (4.0%) of the Gross Sales of the Restaurant for the
preceding month immediately ended.
(b) System of Payment. Franchisee shall at all times participate in the WIMPY automatic
debit/credit transfer program as specified by WIMPY from time to time for the payment of all amounts due
WIMPY pursuant to this Franchise. Franchisee shall execute and deliver to WIMPY such documents and
instruments as may be necessary to establish and maintain said automatic debit/credit transfer program.
(c) Interest on Delinquencies. In the event that the Franchisee is past due on the payment of
any amount due WIMPY under this Franchise, including accrued interest, the Franchisee shall be required, to the
extent permitted by law, to pay interest on the past due amount to WIMPY for the period beginning with the
original due date for payment to the date of actual payment at an annual rate equal to the highest rate allowed by
law or, if there is no maximum rate permitted by law, then fifteen percent (15%). Such interest will be calculated
on the basis of monthly compounding and the actual number of days elapsed divided by 365.
9. Initial Fee. Franchisee acknowledges that: (a) the initial grant of this Franchise constitutes the
sole consideration for the payment of an Initial Fee of Forty-Five Thousand Dollars ($45,000.00) paid by
Franchisee to WIMPY; and (b) the fee has been earned by WIMPY (except where the construction of the
Restaurant has not been completed within one (1) year from the date of the execution and delivery of this
Franchise). If the Restaurant has not been constructed or is not ready for occupancy at the time of the execution
of this Franchise, WIMPY shall use its best efforts to expedite the construction and lease of the Restaurant to
Franchisee. However, WIMPY shall not be liable to Franchisee in any manner for any delays in or lack of
completion of such construction for any reason. WIMPY shall be under no obligation to enforce performance or
to seek other remedies for non-performance of any lease, clause, or contract necessary for the construction of the
Restaurant and reserves the right, in case construction of the Restaurant should be abandoned, the lease assigned,
or other interest in the premises be relinquished, to terminate this Franchise upon reimbursement to Franchisee of
the Initial Fee. At such time as the Restaurant is completed and ready for occupancy, the Initial Fee shall be
deemed to be earned. If the Restaurant is not ready for occupancy within one (1) year from the date of this
Franchise, Franchisee shall have the right to terminate this Franchise and obtain an immediate refund of the Initial
Fee upon written request to WIMPY.
10. Reports. On or before 11:00 a.m. Central Standard Time on the first business day of each month,
Franchisee shall render, in a manner specified by WIMPY, a statement, in such form as WIMPY shall reasonably
require from time to time, of all receipts from the operation of the Restaurant for the preceding month
immediately ended. On or before the twenty-fifth (25th) day of each month Franchisee shall submit to WIMPY
an operating statement and a statistical report for the previous month in form satisfactory to WIMPY. Franchisee
shall keep and preserve full and complete records of Gross Sales for at least three (3) years in a manner and
form satisfactory to WIMPY and shall also deliver such additional financial and
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operating reports and other information as WIMPY may reasonably request on the forms and in the manner
prescribed by WIMPY. Franchisee further agrees to submit within ninety (90) days following the close of each
fiscal year of the Restaurant’s operation, a profit and loss statement covering operations during such fiscal year
and a balance sheet taken as of the close of such fiscal year, all prepared in accordance with generally accepted
accounting principles. The profit and loss statement and the balance sheet shall, if WIMPY shall request
certification, be certified by a certified public accountant. Franchisee shall at Franchisee’s expense cause
Franchisee’s public accountant and certified public accountant, if any, to consult with WIMPY concerning such
statement and balance sheet. The original of each such report required by this paragraph 10 shall be mailed to
WIMPY at the address indicated in paragraph 22 herein.
WIMPY shall have the right to inspect and/or audit Franchisee’s accounts, books, records, and
tax returns at all reasonable times to ensure that Franchisee is complying with the terms of this Franchise. If such
inspection discloses that Gross Sales actually exceeded the amount reported by Franchisee as Gross Sales by an
amount equal to two percent (2%) or more of Gross Sales originally reported to WIMPY, Franchisee shall bear
the cost of such inspection and audit.
11. Restrictions. Franchisee agrees and covenants as follows:
(a) During the term of this Franchise, Franchisee shall not, without the prior written consent
of WIMPY, directly or indirectly, engage in, acquire any financial or beneficial interest (including interests in
corporations, partnerships, trusts, unincorporated associations, or joint ventures) in, or become a landlord for any
restaurant business, which is similar to the Restaurant.
(b) Franchisee shall not, for a period of eighteen (18) months after termination of this
Franchise for any reason or the sale of the Restaurant, directly or indirectly, engage in or acquire any financial or
beneficial interest (including any interest in corporations, partnerships, trusts, unincorporated associations, or joint
ventures) in, or become a landlord of any restaurant business which is similar to the Restaurant within a ten-mile
radius of the Restaurant.
(c) Franchisee shall not appropriate, use, or duplicate the WIMPY System, or any portion
thereof, for use at any other self-service, carry-out, or other similar restaurant business.
(d) Franchisee shall not disclose or reveal any portion of the WIMPY System to a non-
franchisee other than to Franchisee’s Restaurant employees as an incident of their training.
(e) Franchisee shall acquire no right to use, or to license the use of, any name, mark, or other
intellectual property right granted or to be granted herein, except in connection with the operation of the
Restaurant.
The restrictions contained in paragraphs 11(a) and 11(b) herein shall not apply to ownership of
less than two percent (2%) of the shares of a company whose shares are listed and traded on a national or regional
securities exchange.
12. Compliance With Entire System. Franchisee acknowledges that every component of the WIMPY
System is important to WIMPY and to the operation of the Restaurant as a WIMPY
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restaurant, including a designated menu of food and beverage products; uniformity of food specifications,
preparation systems, quality, and appearance; and uniformity of facilities and service.
WIMPY shall have the right to inspect the Restaurant at all reasonable times to ensure that
Franchisee’s operation thereof is in compliance with the standards and policies of the WIMPY System.
Franchisee shall comply with the entire WIMPY System, including, but not limited to, the
following:
(a) Operate the Restaurant in a clean, wholesome manner in compliance with prescribed
standards of Quality, Service, and Cleanliness; comply with all business policies, practices, and procedures
imposed by WIMPY; serve at the Restaurant only those food and beverage products now or hereafter designated
by WIMPY; and maintain the building, fixtures, equipment, signage, seating and decor, and parking area in a
good, clean, wholesome condition and repair, and well lighted and in compliance with designated standards as
may be prescribed from time to time by WIMPY;
(b) Purchase kitchen fixtures, lighting, seating, signs, and other equipment in accordance
with the equipment specifications and layout initially designated by WIMPY and, promptly after notice from
WIMPY that the Restaurant premises are ready for occupancy, cause the installation thereof;
(c) Keep the Restaurant constructed and equipped in accordance with the building blueprints
and equipment layout plans that are standard in the WIMPY System or as such blueprints and plans may be
reasonably changed from time to time by WIMPY;
(d) Franchisee shall not, without the prior written consent of WIMPY: (i) make any building
design conversion or (ii) make any alterations, conversions, or additions to the building, equipment, or parking
area;
(e) Make repairs or replacements required: (i) because of damage or wear and tear or (ii) in
order to maintain the Restaurant building and parking area in good condition and in conformity to blueprints and
plans;
(f) Where parking is provided, maintain the parking area for the exclusive use of Restaurant
customers;
(g) Operate the Restaurant seven (7) days per week throughout the year and at least during
the hours from 7:00 a.m. to 11:00 p.m., or such other hours as may from time to time be prescribed by WIMPY
(except when the Restaurant is untenantable as a result of fire or other casualty), maintain sufficient supplies of
food and paper products, and employ adequate personnel so as to operate the Restaurant at its maximum capacity
and efficiency;
(h) Cause all employees of Franchisee, while working in the Restaurant, to: (i) wear
uniforms of such color, design, and other specifications as WIMPY may designate from time to time;
(ii) present a neat and clean appearance; and (iii) render competent and courteous service to Restaurant customers;
(i) In the dispensing and sale of food products: (i) use only containers, cartons, bags,
napkins, other paper goods, and packaging bearing the approved trademarks and which meet the WIMPY
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System specifications and quality standards which WIMPY may designate from time to time; (ii) use only those
flavorings, garnishments, and food and beverage ingredients which meet the WIMPY System specifications and
quality standards which WIMPY may designate from time to time; and (iii) employ only those systems of food
handling and preparation which WIMPY may designate from time to time;
(j) To make prompt payment in accordance with the terms of invoices rendered to
Franchisee on Franchisee’s purchase of fixtures, signs, equipment, and food and paper supplies; and
(k) At Franchisee’s own expense, comply with all federal, state, and local laws, ordinances,
and regulations affecting the operation of the Restaurant.
13. Best Efforts. Franchisee shall diligently and fully exploit the rights granted in this Franchise by
personally devoting full time and best efforts and, in case more than one individual has executed this Franchise as
the Franchisee, then shall personally devote full time and best efforts to the
operation of the Restaurant. Franchisee shall keep free from conflicting enterprises or any other activities which
would be detrimental to or interfere with the business of the Restaurant.
14. Interference With Employment Relations of Others. During the term of this Franchise,
Franchisee shall not employ or seek to employ any person who is at the time employed by WIMPY, any of its
subsidiaries, or by any person who is at the time operating a WIMPY restaurant or otherwise induce, directly or
indirectly, such person to leave such employment. This paragraph 14 shall not be violated if such person has left
the employ of any of the foregoing parties for a period in excess of six (6) months.
15. Assignment. Without the prior written consent of WIMPY, Franchisee’s interest in this Franchise
shall not be assigned or otherwise transferred in whole or in part (whether voluntarily or by operation of law)
directly, indirectly, or contingently, and then only in accordance with the terms of this paragraph 15.
(a) Death or Permanent Incapacity of Franchisee. Upon the death or permanent incapacity of
Franchisee, the interest of Franchisee in this Franchise may be assigned either pursuant to the terms of
paragraph 15(d) herein or to one or more of the following persons: Franchisee’s spouse, heirs, or nearest relatives
by blood or marriage, subject to the following conditions: (i) if, in the sole discretion of WIMPY, such person
shall be capable of conducting the Restaurant business in accordance with the terms and conditions of this
Franchise and (ii) if such person shall also execute an agreement by which the person personally assumes full and
unconditional liability for and agrees to perform all the terms and conditions of this Franchise to the same extent
as the original Franchisee. If, in WIMPY sole discretion, such person cannot devote full time and best efforts to
the operation of the Restaurant or lacks the capacity to operate the Restaurant in accordance with this Franchise,
WIMPY shall have an option to operate and/or manage the Restaurant for the account of Franchisee or of
Franchisee’s estate until the deceased or incapacitated Franchisee’s interest is transferred to another party
acceptable to WIMPY in accordance with the terms and conditions of this Franchise. However, in no event shall
such WIMPY operation and management of the Restaurant continue for a period in excess of twelve (12) full
calendar months without the consent of Franchisee or Franchisee’s estate. In the event that WIMPY so operates
and/or manages the Restaurant, WIMPY shall make a complete account to and return
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the net income from such operation to the Franchisee or to Franchisee’s estate, less a reasonable management fee
and expenses. If the disposition of the Restaurant to a party acceptable to WIMPY has not taken place within
twelve (12) months from the date that WIMPY has commenced the operation or management of the Restaurant
on behalf of the deceased or incapacitated Franchisee, then, in that event, WIMPY shall have the option to
purchase the Restaurant at fair market value for cash or its common stock at its option.
(b) Assignment to Franchisee’s Corporation. Upon Franchisee’s compliance with such
requirements as may from time to time be prescribed by WIMPY, including a Stockholders Agreement in the
form prescribed by WIMPY, WIMPY shall consent to an assignment to a corporation whose shares are wholly
owned and controlled by Franchisee. The corporate name of the corporation shall not include any of the names or
trademarks granted by this Franchise. Any subsequent assignment or transfer, either voluntarily or by operation of
law, of all or any part of said shares shall be made in compliance with the terms and conditions set forth in
paragraphs 15(a) and 15(d) herein.
(c) First Option to Purchase. Franchisee or Franchisee’s representative shall, at least twenty
(20) days prior to the proposed effective date, give WIMPY written notice of intent to sell or otherwise transfer
this Franchise pursuant to paragraph 15(d). The notice shall set forth the name and address of the proposed
purchaser and all the terms and conditions of any offer. WIMPY shall have the first option to purchase the
Restaurant by giving written notice to Franchisee of its intention to purchase on the same terms as the offer
within ten (10) days following WIMPY receipt of such notice. However, if WIMPY fails to exercise its option
and the Restaurant is not subsequently sold to the proposed purchaser for any reason, WIMPY shall continue to
have, upon the same conditions, a first option to purchase the Restaurant upon the terms and conditions of any
subsequent offer.
(d) Other Assignment. In addition to any assignments or contingent assignments
contemplated by the terms of paragraphs 15(a) and 15(b), Franchisee shall not sell, transfer, or assign this
Franchise to any person or persons without WIMPY prior written consent. Such consent shall not be arbitrarily
withheld.
In determining whether to grant or to withhold such consent, WIMPY shall consider of
each prospective transferee, by way of illustration, the following: (i) work experience and aptitude,
(ii) financial background, (iii) character, (iv) ability to personally devote full time and best efforts to managing the
Restaurant, (v) residence in the locality of the Restaurant, (vi) equity interest in the Restaurant, (vii) conflicting
interests, and (viii) such other criteria and conditions as WIMPY shall then apply in the case of an application for
a new franchise to operate a WIMPY restaurant. WIMPY consent shall also be conditioned each upon such
transferee’s execution of an agreement by which transferee personally assumes full and unconditional liability for
and agrees to perform from the date of such transfer all obligations, covenants, and agreements contained in this
Franchise to the same extent as if transferee had been an original party to this Franchise. Franchisee and each
transferor shall continue to remain personally liable for all affirmative obligations, covenants, and agreements
contained herein for the full term of this Franchise or for such shorter period as WIMPY may,
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in its sole discretion, determine. Upon each assignment or other transfer of this Franchise to any person or
persons under the terms and conditions of this paragraph 15(d), the percentage service fee charge owing to
WIMPY after the date of such assignment or transfer shall be automatically adjusted to the then prevailing
percentage service fee charge required under new Franchises issued by WIMPY for similar WIMPY restaurants at
the time of such assignment or transfer.
16. Franchisee Not an Agent of WIMPY. Franchisee shall have no authority, express or implied, to
act as agent of WIMPY or any of its affiliates for any purpose. Franchisee is, and shall remain, an independent
contractor responsible for all obligations and liabilities of, and for all loss or damage to, the Restaurant and its
business, including any personal property, equipment, fixtures, or real property connected therewith, and for all
claims or demands based on damage or destruction of property or based on injury, illness, or death of any person
or persons, directly or indirectly, resulting from the operation of the Restaurant. Further, Franchisee and WIMPY
are not and do not intend to be partners, associates, or joint employers in any way and WIMPY shall not be
construed to be jointly liable for any acts or omissions of Franchisee under any circumstances.
17. Insurance. Franchisee shall, upon taking possession of the Restaurant, acquire and maintain in
effect such insurance with such coverages as may be required by the terms of any lease of the Restaurant premises
to WIMPY, and in any event, Franchisee shall acquire and maintain in effect not less than the following
coverages in the following minimum amounts:
(a) Worker’s Compensation insurance prescribed by law in the state in which the Restaurant
is located and Employer’s Liability Insurance with $100,000/$500,000/$100,000 minimum limit. If the state in
which the Restaurant is located allows the option of not carrying Worker’s Compensation Insurance, and
Franchisee chooses to exercise that option, Franchisee shall nonetheless carry and maintain other insurance with
coverage and limits as approved by WIMPY.
(b) Commercial general liability insurance in a form approved by WIMPY with a limit of
$5,000,000 per occurrence/$5,000,000 aggregate.
(c) All such insurance as may be required under the Lease.
All insurance policies required to be carried hereunder shall name WIMPY and any party
designated by WIMPY as additional insureds, as their interests may appear in this Franchise. All policies shall be
effective on or prior to the date Franchisee is given possession of the Restaurant premises for the purpose of
installing equipment or opening the Restaurant, whichever occurs first, and evidence of payment of premiums and
duplicate copies of policies of the insurance required herein shall be delivered to WIMPY at least thirty (30) days
prior to the date that Franchisee opens for business and/or thirty (30) days prior to the expiration date of an
existing policy of insurance. All policies of insurance shall include a provision prohibiting cancellations or
material changes to the policy thereof until thirty (30) days prior written notice has been given to WIMPY.
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In the event Franchisee shall fail to obtain the insurance required herein, WIMPY may,
but is not obligated to, purchase said insurance, adding the premiums paid to Franchisee’s monthly rent.
(Franchisee may authorize WIMPY to purchase and to administer the required minimum insurance on
Franchisee’s behalf. However, WIMPY, by placement of the required minimum insurance, assumes no
responsibility for premium expense nor guarantees payment for any losses sustained by Franchisee.) WIMPY may
relieve itself of all obligations with respect to the purchase and administration of such required insurance
coverage by giving ten (10) days written notice to Franchisee.
All insurance shall be placed with a reputable insurance company licensed to do business
in the state in which the Restaurant is located and having a Financial Size Category equal to or greater than IX
and Policyholders Rating of “A+” or “A”, as assigned by Alfred M. Best and Company, Inc., unless otherwise
approved by WIMPY.
18. Material Breach. The parties agree that the happening of any of the following events shall
constitute a material breach of this Franchise and violate the essence of Franchisee’s obligations and, without
prejudice to any of its other rights or remedies at law or in equity, WIMPY, at its election, may terminate this
Franchise upon the happening of any of the following events:
(a) Franchisee shall fail to maintain and operate the Restaurant in a good, clean, wholesome
manner and in compliance with the standards prescribed by the WIMPY System;
(b) Franchisee shall be adjudicated a bankrupt, become insolvent, or a receiver, whether
permanent or temporary, for all or substantially all of Franchisee’s property, shall be appointed by any court, or
Franchisee shall make a general assignment for the benefit of creditors, or a voluntary or involuntary petition
under any bankruptcy law shall be filed with respect to Franchisee and shall not be dismissed within thirty (30)
days thereafter;
(c) Any payment owing to WIMPY is not paid within thirty (30) days after the date such
payment is
due;
(d) Any judgment or judgments aggregating in excess of $5,000.00 against Franchisee or any
lien in excess of $5,000.00 against Franchisee’s property shall remain unsatisfied or unbonded of record in excess
of thirty (30) days;
(e) Franchisee shall cause, suffer, or permit (voluntarily or involuntarily) Franchisee’s right
of possession as lessee or sublessee of the premises on which the Restaurant is located to be terminated
prematurely for any cause whatever;
(f) Franchisee shall acquire any interest in a business in violation of paragraph 11(a);
(g) Franchisee shall duplicate the WIMPY System in violation of paragraph 11(c);
(h) Franchisee shall make or cause a disclosure of any portion of the WIMPY System in
violation of paragraph 11(d) or shall make or cause a disclosure of part of the WIMPY System business manuals;
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(i) Franchisee shall violate paragraph 11(e) by use of any name, trademark, service mark, or
other intellectual property right exceeding the restrictions of said paragraph 11;
(j) Franchisee shall knowingly sell food or beverage products other than those designated by
WIMPY or which fail to conform to WIMPY System specifications for those products, or which are not prepared
in accordance with the systems prescribed by WIMPY, or fail to sell products designated by WIMPY;
(k) Any assignment or other transfer of any interest of the Franchisee in this Franchise shall
occur in violation of paragraph 15(d) herein;
(l) Franchisee shall deny WIMPY the right to inspect the Restaurant at reasonable times;
(m) Franchisee shall fail to make or make repeated delays in the prompt payment of
undisputed invoices from suppliers or in the remittance of payments as required by this Franchise;
(n) Franchisee makes any misrepresentations to WIMPY relating to the acquisition and/or
ownership of this Franchise;
(o) Franchisee engages in public conduct which reflects materially and unfavorably upon the
operation of the Restaurant, the reputation of the WIMPY System, or the goodwill associated with the WIMPY
trademarks; provided that engaging in legitimate political activity (including testifying, lobbying, or otherwise
attempting to influence legislation) shall not be grounds for termination;
(p) Franchisee is convicted of, pleads guilty or no contest to a felony, or any other crime that
is reasonably likely to adversely affect the WIMPY System, the Restaurant, or the goodwill associated with the
WIMPY trademarks; or
(q) Franchisee intentionally understates Gross Sales reported to WIMPY.
19. Other Breaches. If Franchisee fails in the performance of any of the terms and conditions of this
Franchise (other than performance of the terms and conditions listed in paragraph 18), Franchisee shall be guilty
of a breach of this Franchise which shall not (except in the case of repeated breaches of the same or of different
terms and conditions of this Franchise) constitute grounds for termination of this Franchise. WIMPY shall have
the right to seek judicial enforcement of its rights and remedies, including, but not limited to, injunctive relief,
damages, or specific performance. Notwithstanding any of the provisions of this paragraph 19, any uncured
breach of the terms of this Franchise (whether of paragraph 18 or 19) shall be sufficient reason for WIMPY to
withhold approval of its consent to any assignment or transfer of Franchisee’s interest in this Franchise provided
for herein.
20. Effect of Termination.
(a) In the event of any material breach of this Franchise, WIMPY shall have an immediate
right to enter and take possession of the Restaurant in order to maintain continuous operation of the Restaurant, to
provide for orderly change of management and disposition of personal property, and to otherwise protect WIMPY
interest.
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(b) Upon termination of this Franchise due to any breach or breaches, Franchisee shall not,
without the prior written consent of WIMPY, remove any furniture, fixtures, signs, equipment, other property, or
leasehold improvements from the premises either prior to or for a period of thirty (30) days following such
termination. WIMPY shall have the option for thirty (30) days following any such termination to purchase
Franchisee’s furniture, fixtures, signs, equipment, other property, and leasehold improvements or any portion
thereof for a sum equal to the fair market value of such property. In the event of such a termination, there shall be
no payment by WIMPY for intangible assets of Franchisee.
(c) Upon termination of this Franchise due to the expiration of its term or as a result of any
eminent domain proceedings affecting the premises upon which the Restaurant is situated, Franchisee shall not
remove any furniture, fixtures, signs, equipment, other property, or leasehold improvements within sixty (60) days
prior to the date specified for termination or the date specified for takeover by any public authority. WIMPY shall,
upon written notice of its intention to purchase said property at least thirty (30) days prior to such date of
termination, have the option to purchase Franchisee’s furniture, fixtures, signs, equipment, other property, and
leasehold improvements or any portion thereof for a sum equal to the fair market value of such property. In the
event of such a termination, there shall be no payment by WIMPY for intangible assets of Franchisee.
(d) Upon termination or expiration of this Franchise, Franchisee shall: (i) forthwith return to
WIMPY the business manuals furnished to Franchisee, together with all other material containing trade secrets,
operating instructions, or business practices; (ii) discontinue the use of the WIMPY System and its associated
trade names, service marks, and trademarks or the use of any and all signs and printed goods bearing such names
and marks, or any reference to them; (iii) not disclose, reveal, or publish all or any portion of the WIMPY System;
and (iv) not thereafter use any trade name, service mark, or trademark similar to or likely to be confused with any
trade name, service mark, or trademark used at any time in the WIMPY System.
21. Effect of Waivers. No waiver by WIMPY or any breach or a series of breaches of this Franchise
shall constitute a waiver of any subsequent breach or waiver of the terms of this Franchise.
22. Notices. Any notice hereunder shall be in writing and shall be delivered by personal service or by
United States certified or registered mail, with postage prepaid, addressed to Franchisee at the Restaurant or to
WIMPY at ONE WIMPY PLAZA, OAK BROOK, ILLINOIS 60523. Either party, by a similar written notice,
may change the address to which notices shall be sent.
23. Cost of Enforcement. If WIMPY institutes any action at law or in equity against Franchisee to
secure or protect WIMPY rights under or to enforce the terms of this Franchise, in addition to any judgment
entered in its favor, WIMPY shall be entitled to recover such reasonable attorneys’ fees as may be allowed by the
court together with court costs and expenses of litigation.
24. Indemnification. If WIMPY shall be subject to any claim, demand, or penalty or become a party
to any suit or other judicial or administrative proceeding by reason of any claimed act or omission by Franchisee
or Franchisee’s employees or agents, or by reason of any act occurring on the Restaurant premises, or by reason
of an omission with respect to the business or operation of the Restaurant, Franchisee shall indemnify
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and hold WIMPY harmless against all judgments, settlements, penalties, and expenses, including attorneys’ fees,
court costs, and other expenses of litigation or administrative proceeding, incurred by or imposed on WIMPY in
connection with the investigation or defense relating to such claim, litigation, or administrative proceeding and, at
the election of WIMPY, Franchisee shall also defend WIMPY.
25. Construction and Severability. All references in this Franchise to the singular shall include the
plural where applicable. If any part of this Franchise for any reason shall be declared invalid, such decision shall
not affect the validity of any remaining portion, which shall remain in full force and effect. In the event that any
material provision of this Franchise shall be stricken or declared invalid, WIMPY reserves the right to terminate
this Franchise.
26. Scope and Modification of Franchise. This Franchise (including Exhibit A and any riders
hereto) constitutes the entire agreement between the parties and supersedes all prior and contemporaneous, oral or
written, agreements or understandings of the parties. Nothing in this Franchise or in any related agreement,
however, is intended to disclaim the representations made in the Franchise Disclosure Document furnished to
Franchisee. No interpretation, change, termination, or waiver of any of the provisions hereof shall be binding
upon WIMPY unless in writing signed by an officer or franchising director of WIMPY, and which is specifically
identified as an amendment hereto. No modification, waiver, termination, rescission, discharge, or cancellation of
this Franchise shall affect the right of any party hereto to enforce any claim or right hereunder, whether or not
liquidated, which occurred prior to the date of such modification, waiver, termination, rescission, discharge, or
cancellation.
27. Governing Laws. The terms and provisions of this Franchise shall be interpreted in accordance
with and governed by the laws of the state of Illinois.
28. Acknowledgment. Franchisee acknowledges that:
(a) The term of this Franchise is set forth in paragraph 2(b) hereof with no promise or
representation as to the renewal of this Franchise or the grant of a new franchise;
(b) Franchisee hereby represents that Franchisee has received a copy of this Franchise, has
read and understands all obligations being undertaken, and has had an opportunity to consult with Franchisee’s
attorney with respect thereto at least seven (7) calendar days prior to execution;
(c) No representation has been made by WIMPY as to the future profitability of the
Restaurant;
(d) Prior to the execution of this Franchise, Franchisee has worked at a WIMPY
restaurant and has had ample opportunity to contact existing franchisees of WIMPY and to investigate all
representations made by WIMPY relating to the WIMPY System;
(e) This Franchise establishes the Restaurant at the location specified on page 1 hereof only
and that no “exclusive,” “protected,” or other territorial rights in the contiguous market area of such Restaurant is
hereby granted or inferred;
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(f) This Franchise supersedes any and all other agreements and representations respecting
the Restaurant and contains all the terms, conditions, and obligations of the parties with respect to the grant of this
Franchise; however, nothing in this Franchise or in any related agreement is intended to disclaim the
representations made in the Franchise Disclosure Document furnished to Franchisee;
(g) WIMPY or its affiliates are the sole owner(s) of the trademarks, trade names, service
marks, and goodwill associated therewith, respectively, and Franchisee acquires no right, title, or interest in those
names and marks other than the right to use them only in the manner and to the extent prescribed and approved by
WIMPY;
(h) No future franchise or offers of franchises for additional WIMPY restaurants, other than
this Franchise, have been promised to Franchisee and any other franchise offer shall only be in writing, executed
by an officer or franchising director of WIMPY, and identified as a Franchise Agreement or Rewrite (New Term)
Offer Letter;
(i) Neither WIMPY nor anyone acting on its behalf has made any representations,
inducements, promises, or agreements, orally or otherwise, respecting the subject matter of this Franchise, which
is not embodied herein or set forth in the Franchise Disclosure Document; and
(j) This Franchise is offered to Franchisee personally and to no others, and may not be
accepted by any other person, partnership, or corporation, or transferred by assignment, will, or operation of law.
IN WITNESS WHEREOF, the parties hereto set their hands and seals, in duplicate, the day and year in
this instrument first above written.
By:
Date
Prepared By:
Date
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