EXHIBIT 10.28

FRANCHISE DEVELOPMENT AGREEMENT
(Non-exclusive/Exclusive)

THIS FRANCHISE DEVELOPMENT AGREEMENT (“Agreement”) is made and entered into this
___ day of __________, 20___, by and between EL POLLO LOCO, INC., a Delaware
corporation, with its principal place of business at 3535 Harbor Blvd, Suite
100, Costa Mesa, California 92626 (referred to herein as “El Pollo Loco” or
“Franchisor”) and ________________________________, with its principal place of
business at _____________________________________ (“Developer”).

RECITALS

A.           Franchisor owns certain proprietary and other property rights and
interests in and to the “El Pollo Loco” trademark and service mark, and such
other trademarks, service marks, logo types, insignias, trade dress designs and
commercial symbols as Franchisor may from time to time authorize or direct
Developer to use in connection with the operation of an “El Pollo Loco”
Restaurant (the “El Pollo Loco® Marks”).  Franchisor has a distinctive plan for
the operation of retail outlets for the sale of flame-broiled food items and
related products, which plan includes but is not limited to the El Pollo Loco®
Marks and the Operations Manual (the “Manual”), policies, standards, procedures,
employee uniforms, signs, menu boards and related items, and the reputation and
goodwill of the El Pollo Loco® chain of restaurants (collectively, the “El Pollo
Loco® System”).

B.           Developer represents that it is experienced in and has independent
knowledge of the nature and specifics of the restaurant business.  Developer
represents that in entering into this Agreement it has relied solely on its
personal knowledge and has not relied on any representations of Franchisor or
any of its officers, directors, employees or agents, except those
representations contained in any legally required Disclosure Document delivered
to Developer.

C.           Developer desires to obtain development rights for multiple
restaurants from Franchisor within a specified geographical (the “Territory”)
specified in Exhibit “A” attached hereto and made a part hereof (or if single
unit replace with “Developer desires to obtain development rights for a single
restaurant from Franchisor within a specified address (the “Territory”)
specified in Exhibit “A” attached hereto and made a part hereof.”)

D.           Franchisor is willing to grant the (non-exclusive/exclusive) right
to develop and open El Pollo Loco® restaurant(s) within the Territory referenced
in Exhibit “A.”

NOW, THEREFORE, in consideration of the mutual covenants and obligations herein
contained, the parties hereto agree as follows:

1.
Development Rights in Territory.

1.1          Franchisor hereby grants to Developer, subject to the terms and
conditions of this Agreement (if 2.11 applicable add “, and specifically Section
2.11 hereof,”) and as long as Developer shall not be in default of this
Agreement or any other development, franchise or other agreement between
Developer and Franchisor, (non-exclusive/exclusive) development rights to
establish and operate ____ franchised restaurant(s), and to use the El Pollo
Loco® System solely in connection therewith, at specific locations to be
designated in separate Franchise Agreement(s) (the “Franchise Agreements”).  (If
exclusive agreement, add “Developer expressly acknowledges that the exclusive
rights granted herein apply only to the right to develop new restaurants in the
Territory, and no exclusive territory or radius protection for the term of any
Franchise Agreement is granted herein.”)  The Franchise Agreements (and all
ancillary documents attached as Exhibits to the Franchise Agreement, including
the Personal Guarantee) executed in accordance with this Agreement shall be in
the form currently in use by Franchisor at the time of execution of the
Franchise Agreement and shall be executed individually by each person, partner,
member or shareholder.

 
 

--------------------------------------------------------------------------------

 

1.2          (Only applies to multi-unit Development Agreement – delete if
single-unit Development Agreement).  Prior to or concurrent with the execution
of this Agreement, Developer shall meet with Franchisor’s development
representatives and prepare a market development plan for the units to be
constructed and opened by Developer in the Territory (identifying specific key
areas, key intersections and trade areas in the Territory) and all development
pursuant to this Agreement shall be in accordance with this plan (the “Market
Plan”).  The Market Plan shall include proposed areas where sites may be
located, ranking and prioritization of site locations and other information
customarily used by market planners in the restaurant industry.  Developer and
Franchisor shall jointly approve the Market Plan.

2.0
Limitation on Development Rights.

2.1          Developer must submit one or more site(s) for approval, enter into
binding leases or purchase agreements and open to the public the number of El
Pollo Loco® restaurant(s) on such approved sites each calendar year as required
on the Development Schedule, all as set forth on Exhibit “B” attached hereto and
made a part hereof.

2.2          For purposes of the Development Schedule in Exhibit “B”, no credit
will be given for the development of El Pollo Loco® restaurant(s) outside the
Territory, regardless of the fact that Developer may, upon proper application,
obtain from Franchisor an El Pollo Loco® Franchise Agreement (“Franchise
Agreement”) for any such development.

2.3          Although this Agreement affords the Developer the right to develop
and open El Pollo Loco® restaurant(s) within the Territory, as set forth on
Exhibit “A”, all restaurant(s) developed under this Agreement must be duly
licensed through individual Franchise Agreement(s).  Developer will execute El
Pollo Loco’s then standard Franchise Agreement in use at the time of execution
for each restaurant developed under this Agreement, and agrees to pay Franchisor
the current fees, royalties and other required payments in accordance with the
Disclosure Document then in effect.  Execution of the appropriate Franchise
Agreement and payment of the initial franchise fee and/or any other required
fees must be accomplished prior to the commencement of construction at any site.

2.4          Developer must satisfy all Franchisor’s financial and operational
criteria then in effect prior to El Pollo Loco's execution of each standard
Franchise Agreement issued pursuant to this Agreement.  Developer shall provide
Franchisor with current information pertaining to Developer's financial
condition and the financial condition of the majority and managing
members/partners/shareholders of Developer at any time upon El Pollo Loco's
request and in no event less than once annually.  Developer acknowledges that,
among other things, it will be required to submit annual financial statements of
Developer and personal financial statements of each of its principal owners and
Managing Members to be eligible for financial approval by El Pollo Loco.   In
the event any of the majority owners of Developer shall also be the Managing
Members and/or majority owners of any other entity which is a franchisee of El
Pollo Loco, then each such franchisee entity must be operationally and
financially approved by Franchisor before approval for expansion will be granted
to any one franchisee entity.  “Managing Members” shall be any individuals who
are designated as the primary decision makers or general managers of the
franchisee entity and those individuals who (individually or collectively) own
at least 51% interest in the franchisee entity.

2.5          Developer shall use its best efforts to retain qualified real
estate professionals (including licensed brokers) to locate proposed sites for
the Restaurant(s).  Developer shall submit proposed sites for each franchise
Restaurant unit to be developed under this Agreement for acceptance by
Franchisor’s Real Estate Site Approval Committee (“RESAC”), together with such
site information as may be reasonably required by Franchisor to evaluate the
proposed site, no later than the dates set forth in Exhibit “B” as RESAC
Submittal Dates, the first of which shall be approximately ninety (90) days
after execution of this Agreement.  Franchisor may require, as a condition to
its approval of a site, a site description and analysis, traffic and other
demographic information, all in such format as the Franchisor may require, which
information shall include, without limitation, a study prepared by a third party
reasonably acceptable to the Franchisor analyzing the impact of the proposed
site on other franchised restaurants surrounding or within the vicinity of such
proposed site.  All such analyses, information and studies shall be prepared at
the sole cost and expense of Developer.

 
2 of 18

--------------------------------------------------------------------------------

 

Franchisor shall send representatives to evaluate proposed site(s) for each
Restaurant to be developed under this Agreement, and Franchisor will do so at
its own expense for the first two proposed sites for each Restaurant.  If
Franchisee proposes, and Franchisor evaluates, more than two sites for each
Restaurant, then Franchisee shall reimburse Franchisor for the reasonable costs
and expenses incurred by Franchisor’s representatives in connection with the
evaluation of such additional proposed site(s), including, without limitation,
the costs of lodging, travel and meals.  In addition, as a condition to
reviewing a proposed site for the Restaurant, and to determine the impact a
proposed site may have on other existing restaurants operating under the El
Pollo Loco® System, Franchisor may require Franchisee to pay for a market study
conducted by a third party of the proposed site and the surrounding geographic
area.

2.6          Provided there exists no default by Developer under this Agreement
or any other development, franchise or other agreement between Franchisor and
Developer, Franchisor shall evaluate each site proposed for which Developer has
provided all necessary evaluation information, and shall promptly after receipt
of Developer’s proposal, send to Developer written notice of acceptance or
non-acceptance of the site.

2.7          No later than the Site Commitment Dates set forth in Exhibit “B”,
Developer shall submit for the approved site to Franchisor for its review and
approval of:
(i) a fully negotiated but unexecuted lease, which may only subject to obtaining
necessary governmental permits and for which the term with renewal options is
not less than the initial term of the Franchise Agreement.  The unexecuted form
of the lease must be submitted to Franchisor to review for the required terms
and conditions listed in this Section 2.7 prior to full execution of the
lease.  Franchisor will notify Developer upon their approval of the inclusion of
such required terms and conditions.  Developer will then provide a final
executed copy of the lease to Franchisor; and
(ii) a purchase agreement
.  Should Developer purchase the site using another entity other than the
franchise entity, Developer must then enter into a lease with the Franchise
entity as the lessee and the purchasing entity as the lessor and must comply
with all the requirements of Section 2.7).

Any lease to be entered into by Developer shall include the following terms and
conditions which may be contained in the body of the lease or in a signed
addendum to the lease in a form approved by Franchisor:

a)           The landlord consents to Developer’s use of the premises as an El
Pollo Loco restaurant and such restaurant may be open for business during the
required days and hours set forth in the Operations Manual from time to time;

b)           The landlord agrees to furnish the Franchisor with copies of any
and all notices of default, if any, pertaining to the lease and the premises, at
the same time that such notices are sent to Developer;

c)           The landlord agrees that, subject to any other applicable
provisions in the Franchise Agreement, the Franchisor shall have the right, at
its sole option and without any obligation whatsoever to do so, to assume
Developer’s occupancy rights under the lease for the remainder of the term upon
Developer’s default or termination under such lease, the termination of the
Franchise Agreement or the exercise by the Franchisor of its right of first
refusal or right to purchase as set forth in the Franchise Agreement; and

d)           That upon termination or expiration of the lease for any reason,
Developer shall, upon Franchisor’s demand, remove all of the El Pollo Loco Marks
from the Restaurant and the premises and modify the décor of the Restaurant so
that it no longer resembles, in whole or in part, an “El Pollo Loco” Restaurant
and that if Developer shall fail to do so, Franchisor may be given written
notice and the right to enter the premises to make such alterations in which
event Developer shall reimburse Franchisor for all direct and indirect costs and
expenses it may incur in connection therewith, including attorneys’ fees.

 
3 of 18

--------------------------------------------------------------------------------

 

Franchisor shall have no liability under any lease or purchase agreement for the
any Restaurant location developed under this Agreement and shall not guaranty
Developer’s obligations thereunder.  Upon approval by Franchisor of the form of
Developer’s lease and execution of a lease for a site by Developer, Developer
shall furnish to Franchisor a fully executed copy of such lease and any
amendments thereto within fifteen (15) calendar days of such
execution.  Franchisor shall have no obligation to assist Developer to negotiate
its leases.

The lease may not contain a non-competition covenant which restricts Franchisor
or any franchisee or licensee of Franchisor, from operating an El Pollo Loco
Restaurant or any other retail restaurant, unless such covenant is approved by
Franchisor in writing prior to the execution by Developer of the lease.

Each subsequent site to be developed pursuant to the Development Schedule shall
be submitted for approval by RESAC by the date set forth in Exhibit
“B”.  Similarly, each fully executed lease (executed upon prior review and
approval by Franchisor) or purchase agreement (with all contingencies to
Developer’s obligations waived or satisfied, except permitting contingencies)
relating to each subsequent site shall (1) be delivered to Franchisor on or
before the Site Commitment Date for each respective Restaurant as set forth in
Exhibit “B” and (2) prior to the commencement of construction of the Restaurant
and the execution of your Franchise Agreements and (3) the payment of your
initial Franchise Fees for each site.

Site approval does not assure that a Franchise Agreement will be
executed.  Execution of the Franchise Agreement is contingent upon Developer
completing the purchase or lease of the proposed site within sixty (60) days
after approval of the site by the Franchisor.

2.8          Developer acknowledges that time is of the essence in this
Agreement.  If Developer has not obtained approval and entered into a binding
lease or purchase agreement for each site for Restaurant(s) to be developed
under this Agreement by the applicable Site Commitment Date, Developer shall be
in default of its obligations under the Development Schedule and Franchisor
shall be entitled to exercise its rights and remedies under this Agreement, up
to and including termination of this Agreement.  Without limiting Franchisor’s
rights and remedies under this Agreement, should Developer fail to meet its
obligations under the Development Schedule to deliver a binding lease or
purchase agreement to Franchisor for each Restaurant by the Site Commitment
Date, Developer may, among other things, and at Franchisor’s election and upon
written notice by Franchisor as set forth in Section 11.3 below, lose its
exclusive rights in the Territory.

Developer also acknowledges that it is required pursuant to this Agreement to
open Restaurants in the future pursuant to dates set forth in the Development
Schedule attached as Exhibit “B”.  If Developer fails to meet the opening date
for any Restaurant to be developed under this Agreement, Developer shall be in
default and Franchisor shall be entitled to exercise all rights and remedies
available to Franchisor, including rights set forth in Sections 11.1 and 11.2
and the remedies set forth in Section 11.3.  Developer acknowledges that if
Developer fails to open Restaurants in a timely manner pursuant to the
Development Schedule, Franchisor will suffer lost revenues, including royalties
and other fees which would be difficult to calculate and which Franchisor would
have received had Developer met the agreed schedule or had Franchisor had the
right to grant development rights to others in the Territory.

Developer acknowledges that the estimated initial investment and estimated
expenses set forth in Items 6 and 7 of our Uniform Disclosure Document are
subject to and likely to increase over time, and that future Restaurants will
likely involve a greater initial investment and operating capital requirements
than those stated in the Disclosure Document provided to you prior to your
execution of this Agreement.

 
4 of 18

--------------------------------------------------------------------------------

 

Developer understands and acknowledges that in accepting Developer’s proposed
site or by granting a franchise for each approved site, Franchisor does not in
any way, endorse, warrant or guarantee either directly or indirectly the
suitability of such site or the success of the franchise business to be operated
by Developer at such site.  The suitability of the site and the success of the
franchise business depend upon a number of factors outside of Franchisor’s
control, including, but not limited to, the Developer’s operational abilities,
site location, consumer trends and such other factors that are within the direct
control of the Developer.

Developer also acknowledges that it is required pursuant to this Agreement to
retain only those design and construction professionals for the construction of
the Restaurant who have met our criteria and have signed the Preferred
Development Professional Agreement in the form attached hereto as Exhibit “D”.

2.9          Franchisor shall retain the right to:

a)           Open and operate El Pollo Loco® non-traditional restaurants or
franchise others to open and operate El Pollo Loco® non-traditional restaurants,
at all universities, colleges, airports, hospitals, municipal facilities, public
transportation facilities, shopping malls (not including out parcels), stadiums,
amusement parks, drug stores, supermarkets, department stores, truck stops,
hotel or motel chains, stadiums and similar locations of a "non-standard"
nature, regardless of location within the Territory;

b)           Operate or franchise others to operated an El Pollo Loco restaurant
located within the Territory which have been acquired by El Pollo Loco either as
of or after the date of this Agreement;

c)           Sell the same or similar products (using the Marks or not) to
customers at retail locations, through internet, telemarketing or direct
marketing means.  We reserve the right to operate and franchise other
restaurants having the same or similar menu items; and

d)           Convert the Territory from an exclusive to a non-exclusive
Territory upon sixty (60) days written notice in the event Franchisor completes
an acquisition of ten (10) or more real estate locations in a single transaction
(“Acquisition Locations”), some or all of which are located within the
Territory, including restaurants operating under another trade
name.  Notwithstanding the foregoing, Franchisor shall grant Developer a fifteen
(15) day right of first refusal to acquire Franchisor’s rights in Acquisition
Locations in the Territory at the same purchase price paid by Franchisor for
each location, including reasonable closing costs.  If Developer submits written
notice of its intent to exercise the right of first refusal in a timely manner,
it shall complete the transaction for the Acquisition Locations within sixty
(60) days from the date of its notice and retain its exclusive rights to the
Territory.

2.10        The purpose of this Agreement is to promote orderly incremental
growth within the El Pollo Loco® System. The acquisition of existing El Pollo
Loco® restaurants by Developer does not represent incremental growth and,
therefore, does not satisfy the terms of this Agreement pertaining to
development.

2.11       (To be added where there are existing restaurants in the
territory)  Developer acknowledges that Franchisor (i) is operating a unit or
(ii) has granted franchise rights in or (iii) approved a new site for
development for those locations identified in Exhibit “C” attached hereto and
incorporated herein by this reference.  Developer further acknowledges that
Franchisor retains discretion to approve or disapprove any proposed location for
development under this Agreement if, in Franchisor’s reasonable judgment, such
proposed location is not suitable for an El Pollo Loco® restaurant or such
proposed location will have a material adverse effect on the profitability of
another existing El Pollo Loco® location (or approved site) in the
Territory.  Developer covenants to use its reasonable best efforts to avoid
selecting proposed locations that would adversely impact pre-existing locations
in the Territory.

 
5 of 18

--------------------------------------------------------------------------------

 

3.0          Development Fee.

Developer shall pay to Franchisor upon execution of this Agreement a
non-refundable Development Fee (the “Development Fee”) equal to Ten Thousand
Dollars ($10,000.00), in immediately available funds, for each Restaurant to be
developed under this Agreement.  The Development Fee is consideration for this
Agreement.  The Development Fee is not consideration for any Franchise Agreement
and is non-refundable.  The $10,000 Development Fee for each Restaurant shall be
applied against the initial franchise fee payable upon the execution of the
Franchise Agreement applicable to such Restaurant.  If this Agreement is
terminated pursuant to Sections 10.0 or 11.0 below, all Development Fees or any
unused portion thereof, shall be immediately forfeited to Franchisor in
consideration of the rights granted in the Territory up to the time of
termination.

4.0          Term of Development Agreement.

This Agreement shall commence on the date specified in Exhibit "B". Unless
terminated pursuant to Section 10.0 or 11.0 below, it shall expire upon the
earlier of the date specified in Exhibit "B" or upon the opening of the last
restaurant listed in the Development Schedule.

5.0          Territory Conflicts.

5.1          Any continued operation of a restaurant operated by Franchisor or a
franchisee of Franchisor within the Territory on or before the date of this
Agreement shall not be considered to constitute a breach of this Agreement.

5.2          The rights granted Developer in this Agreement are subject to any
prior territorial rights of other franchisees which may now exist in the
Territory, whether or not those rights are currently being enforced. In the
event of a conflict in territorial rights, whether under a Franchise Agreement
or separate territorial or development agreement, the earlier in time shall
prevail. Developer shall be free to negotiate with any person, corporation or
other entity, which claims territorial rights adverse to the rights granted
under this Agreement, for the assignment of those prior territorial rights. For
this purpose, Franchisor agrees to approve any such assignment not in conflict
with the other terms of this Agreement, subject to the condition of any
Franchise Agreements involved, and current policies pertaining to assignments,
including, but not limited to, satisfaction of all past due debts owed to
Franchisor and the execution of a General Release.

5.3          In the event of third party claims to the right to develop any
Territory other than those specified above, it is the responsibility of El Pollo
Loco, where the right is exclusive, to protect and maintain Developer's right to
the Development of the Territory. However, if it appears to El Pollo Loco, in
its sole discretion, that protection of the Territory by legal action is not
advisable, whether due to the anticipation of, or the actual protracted nature
of the action, the costs involved, the uncertainty of outcome, or otherwise,
Franchisor has the right to terminate this Agreement, provided that it refunds
to Developer the balance, if any, of the Development Fee made pursuant to
Section 3.0, which has not been applied against the initial franchise fees for
Franchise Agreement(s) to be acquired under this Agreement.

6.0          Proprietary Rights of El Pollo Loco.

6.1          Developer expressly acknowledges El Pollo Loco's exclusive right,
title, and interest in an to the trade name, service mark and trademark "El
Pollo Loco", and such other trade names, service marks, and trademarks which are
designated as part of the El Pollo Loco® System (the "Marks"), and Developer
agrees not to represent in any manner that Developer has any ownership in El
Pollo Loco® Marks. This Agreement is not a Franchise Agreement. Developer may
not open an El Pollo Loco® restaurant or use the El Pollo Loco® Marks at a
particular site until it executes a Franchise Agreement for that site.
Developer's use of the El Pollo Loco® Marks shall be limited to those rights
granted under each individual Franchise Agreement.  Notwithstanding the
foregoing, El Pollo Loco® may authorize Developer in writing to use the Marks in
connection with advertising and marketing activities in connection with this
Agreement.  Developer expressly agrees that such usage is limited to those
specific activities or promotional materials approved by El Pollo Loco’s
marketing department in advance.   Developer further agrees that its use of the
Marks shall not create in its favor any right, title, or interest in or to El
Pollo Loco® Marks, but that all of such use shall inure to the benefit of El
Pollo Loco, and Developer has no rights to the Marks except to the degree
specifically granted by the individual Franchise Agreement(s). Building designs
and specifications, color schemes and combinations, sign design specifications,
and interior building layouts (including equipment, equipment specification,
equipment layouts, and interior color schemes and combinations) are acknowledged
by Developer to comprise part of the El Pollo Loco® System. Developer shall have
no right to license or franchise others to use the Marks by virtue of this
Agreement.

 
6 of 18

--------------------------------------------------------------------------------

 

6.2          Developer acknowledges that, in connection with its execution of
this Agreement, it may receive confidential and proprietary information
regarding the El Pollo Loco® System.  Developer recognizes the unique value and
secondary meaning attached to the El Pollo Loco® Marks and the El Pollo Loco®
System, and Developer agrees that any noncompliance with the terms of this
Agreement or any unauthorized or improper use will cause irreparable damage to
Franchisor and its franchisees. Developer, therefore, agrees that if it should
engage in any such unauthorized or improper use during, or after, the term of
this Agreement, Franchisor shall be entitled to both seek temporary and
permanent injunctive relief from any court of competent jurisdiction in addition
to any other remedies prescribed by law.

7.0          Insurance and Indemnification.

7.1          During the term of this Agreement, Developer shall obtain and
maintain insurance coverage for public liability, including products liability,
in the amount of at least One Million Dollars ($1,000,000.00) combined single
limit. Developer also shall carry such worker's compensation insurance as may be
required by applicable law.

7.2          Franchisor shall be named as an additional insured on all such
insurance policies and shall be provided with certificates of insurance
evidencing such coverage. All public liability and property damage policies
shall contain a provision that El Pollo Loco, although named as an insured,
shall nevertheless be entitled to recover under such policies on any loss
incurred by El Pollo Loco, its affiliates, agents and/or employees, by reason of
the negligence of Developer, its principals, contractors, agents and/or
employees. All policies shall provide Franchisor with at least thirty (30) days
notice of cancellation or termination of coverage.

7.3          Franchisor reserves the right to specify reasonable changes in the
types and amounts of insurance coverage required by this Section 7.0. In the
event that Developer fails or refuses to obtain or maintain the required
insurance coverage from an insurance carrier acceptable to El Pollo Loco,
Franchisor may, in its sole discretion and without any obligations to do so,
procure such coverage for Developer. In such event, Developer agrees to pay the
required premiums or to reimburse such premiums to Franchisor upon written
demand.

7.4          Developer agrees to defend at its own cost and to indemnify and
hold harmless El Pollo Loco, its parent corporations, affiliates, shareholders,
directors, officers, employees and agents from and against any and all loss,
costs, expenses (including, without limitation, attorneys' fees), damages and
liabilities, however caused, resulting directly or indirectly from all of
Developer’s activities under the Development Agreement. Such loss, costs,
expenses, damages, liabilities and claims shall include, without limitation,
those arising from the death or injury to any person, or arising from damage to
the property of Developer or El Pollo Loco, their affiliates, agents or
employees, or any third person, firm or corporation, whether or not such losses,
costs, expenses, damages, liabilities or claims were actually or allegedly
caused, in whole or in part through the negligence of Franchisor or any of its
affiliates, agents or employees, or resulted from any strict liability imposed
on Franchisor or any of its affiliates, agents or employees.

7.5          The provisions of this Section 7.0 shall expire as to each
Restaurant to be developed under this Agreement upon execution of a Franchise
Agreement for such Restaurant.  The provision of the Franchise Agreement, in
particular, Section 9 thereof (insurance and Indemnification) shall supersede
this Section 7.0 and govern the rights and obligations of the parties
prospectively.

 
7 of 18

--------------------------------------------------------------------------------

 

8.0          Transfer of Rights.

8.1          This Agreement shall inure to the benefit of Franchisor and its
successors and assigns, and is fully assignable by El Pollo Loco.

8.2          The parties acknowledge that this Agreement is personal in nature
with respect to Developer, being entered into by Franchisor in reliance upon and
in consideration of the personal skills, qualifications and trust and confidence
reposed in Developer and Developer's present partners, managing members or
officers if Developer is a partnership, a limited liability company or a
corporation. Therefore, the rights, privileges and interests of Developer under
this Agreement shall not be assigned, sold, transferred, leased, divided or
encumbered, voluntarily or involuntarily, in whole or in part, by operation of
law or otherwise without the prior written consent of El Pollo Loco, which
consent may be given or withheld in El Pollo Loco’s sole discretion.  For
purposes of this Section, a sale of stock, or any membership or partnership
interest in Developer, or a merger or other combination of Developer shall be
considered a transfer of Developer's interest prohibited
hereunder.  Notwithstanding the foregoing, Developer shall be permitted to
establish operating entities to serve as Franchisee, under the Franchise
Agreements, provided the ownership mirrors that of Developer (e.g., Developer
consists of persons A (50%), B (25%) and C (25%).  Franchisee also must consist
of the same three (3) persons with the same percentage of ownership).  All other
entity structures shall require the prior written approval of
Franchisor.  Developer shall pay an administrative fee of Five Hundred Dollars
($500.00) per transfer for each permitted transfer to an Entity where such
transfer is for the convenience of ownership only and does not involve a change
of principals of the business.  Where Developer desires to add new principals to
the Developer or any Franchisee entity, Developer shall pay to Franchisor an
additional $2,500 per new principal to cover Franchisor’s administrative costs
for reviewing the application and suitability of each new principal as
participants in the franchise business.

9.0          Acknowledgment of Selected Terms and Provisions of the Franchise
Agreement.

Developer represents that it has read each of the terms and provisions of the
then current form of Franchise Agreement and acknowledges and is willing to
agree to each and every obligation of Franchisee thereunder including, but not
limited to:

a)           The obligation to deliver execute Personal Guarantees or Investor
Covenants Regarding Confidentiality and Non-Competition in connection with the
execution of each franchise agreement for Restaurants to be developed under this
Agreement;

b)           The obligation to obtain the consent of Franchisor to any security
interests to be granted by Developer in the assets or business of the Restaurant
to lenders or other financing sources in advance of any agreement to provide
those security interests to such third parties;

c)           All in-term and post-term restrictive covenants; and

d)           All territorial rights, options and rights of first refusal
retained by Franchisor under the franchise agreement.

10.0        Termination by Developer; Expiration Date.

This Agreement shall terminate immediately upon El Pollo Loco's receipt of
Developer's notice to terminate, and any unapplied portion of the Development
Fee shall be forfeited to Franchisor in consideration of the rights granted in
the Territory up to the time of termination.  Notwithstanding any provision to
the contrary contained herein, unless earlier terminated by either party, this
Agreement shall expire on ______, 20___, and all rights of Developer herein
shall cease and all unapplied or unused Development Fees paid pursuant to
Section 3.0 hereof shall be forfeited to Franchisor.

 
8 of 18

--------------------------------------------------------------------------------

 

11.0        Events of Default.

11.1        The following events shall constitute a default by Developer, which
shall result in El Pollo Loco's right to declare the immediate termination of
this Agreement.

a)           Failure by Developer to meet the requirements of the Development
Schedule within the time periods specified therein, including failure by
Developer to meet the Site Commitment Date or Opening Date for each site for a
Restaurant in a timely manner as set forth in Exhibit “B” and Section 2.5 and
2.7 above.

b)           Any assignment, transfer or sublicense of this Agreement by
Developer without the prior written consent of El Pollo Loco.

c)           Any violation by Developer of any covenant, term, or condition of
any note or other agreement (including any El Pollo Loco® Franchise Agreement)
between Developer and Franchisor (or an affiliate of El Pollo Loco), the effect
of which is to allow Franchisor to terminate (or accelerate the maturity of)
such agreement before its stated termination (or maturity) date.

d)           Developer's assignment for the benefit of creditors or admission in
writing of its inability to pay its debts generally as they become due.

e)           Any order, judgment, or decree entered adjudicating Developer
bankrupt or insolvent.

f)            Any petition, or application, by Developer to any tribunal for the
appointment of a trustee, receiver, or liquidator of Developer (or a substantial
part of Developer's assets), or commencement by Developer of any proceedings
relating to Developer under any bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment of debt, dissolution, or liquidation law
of any jurisdiction, whether now or hereinafter in effect.

g)           Any filing of a petition or application against Developer, or the
commencement of such proceedings, in which Developer, in any way, indicates its
approval thereof, consent thereto, or acquiescence therein; or the entry of any
order, judgment, or decree appointing any trustee, receiver, or liquidator, or
approving the petition in any such proceedings, where the order, judgment, or
decree remains unstayed and in effect for more than thirty (30) days.

h)           Any entry in any proceeding against the Developer of any order,
judgment, or decree, which requires the dissolution of Developer, where such
order, judgment, or decree remains unstayed and in effect for more than thirty
(30) days.

i)            Developer's voluntary abandonment of any of Developer's
restaurants.

11.2        The following events shall constitute a default by Developer, which
shall result in El Pollo Loco's right to declare the termination of this
Agreement, if such default is not cured within thirty (30) days after written
notice by Franchisor to Developer:

a)           Developer's default in the performance or observance of any
covenant, term, or condition contained in this Agreement not otherwise specified
in Section 11.1 above.

b)           The creation, incurrence, assumption, or sufferance to exist of any
lien, encumbrance, or option whatsoever upon any of Developer's property or
assets, whether now owned or hereafter acquired, the effect of which
substantially impairs Developer's ability to perform or observe any covenant,
term, or condition of this Agreement.

 
9 of 18

--------------------------------------------------------------------------------

 

c)           Refusal by Developer or Developer’s partners, members, or
shareholders to enter individually into the then current form of Franchise
Agreements and Personal Guarantee as provided in Section 1.1 above.

d)           Any change, transfer or conveyance (“Transfer”) in the ownership of
Developer, which Transfer has not been approved in advance by
Franchisor.  Franchisor reserves the right to approve or disapprove any Transfer
in its sole discretion.

11.3        If Franchisor is entitled to terminate this Agreement in accordance
with Sections 11.1 or 11.2 above, Franchisor shall have the right to undertake
the following action instead of terminating this Agreement:

a.           Franchisor may terminate or modify any rights that Developer may
have with respect to protected exclusive rights in the Territory, as granted
under Section 1.1 above, effective ten (10) days after delivery of written
notice thereof to Developer.

If any of such rights are terminated or modified in accordance with this Section
11.3, such action shall be without prejudice to Franchisor’s right to terminate
this Agreement in accordance with Sections 11.1 or 11.2 above, and/or to
terminate any other rights, options or arrangements under this Agreement at any
time thereafter for the same default or as a result of any additional defaults
of the terms of this Agreement.

12.0        Effect of Termination.

12.1        Immediately upon termination or expiration of this Agreement, for
any reason, all of Developer's development rights granted pursuant to this
Agreement shall revert to El Pollo Loco. At the time of termination, only
restaurants operating or to be operated under the El Pollo Loco® System by
virtue of a fully executed Franchise Agreement shall be unaffected by the
termination of this Agreement. Franchisor shall have no duty to execute any
Franchise Agreement with Developer after the termination of this Agreement. The
foregoing remedies are nonexclusive, and nothing stated in this Section 12.0
shall prevent El Pollo Loco's pursuit of any other remedies available to
Franchisor in law or at equity due to the termination of this Agreement.

12.2        Developer understands and agrees that upon the expiration or
termination of this Agreement (or in the event of an exclusive development
agreement, the failure of Developer to meet the Development Schedule and the
resulting loss of exclusive development rights), Franchisor or its subsidiaries
or affiliates, in their sole discretion, may open and/or operate restaurants in
the Territory, or may authorize or franchise others to do the same, whether it
is in competition with or in any other way affects the sales of Developer at the
restaurants.

13.0        Non-Waiver.

El Pollo Loco's consent to or approval of any act or conduct of Developer
requiring such consent or approval shall not be deemed to waive or render
unnecessary El Pollo Loco's consent to or approval of any subsequent act or
conduct hereunder.

14.0        Independent Contractor and Indemnification.

14.1        This Agreement does not constitute Developer an agent, legal
representative, joint venturer, partner, employee or servant of Franchisor for
any purpose whatsoever, and it is understood between the parties hereto that
Developer shall be an independent contractor and is in no way authorized to make
any contract, agreement, warranty or representation on behalf of El Pollo Loco.
The parties agree that this Agreement does not create a fiduciary relationship
between them.

14.2        Under no circumstances shall Franchisor be liable for any act,
omission, contract, debt, or any other obligation of Developer. Developer shall
indemnify and save Franchisor harmless against any such claim and the cost of
defending it arising directly or indirectly from or as a result of, or in
connection with, Developer's actions pursuant to this Agreement.

 
10 of 18

--------------------------------------------------------------------------------

 

15.0        Entire Agreement.

This Agreement, including Exhibits "A", "B", “C” and “D” attached hereto,
constitutes the entire full and complete agreement between Franchisor and
Developer concerning the subject matter hereof and supersedes any and all prior
written agreements. Other than the El Pollo Loco® Franchise Disclosure Document
circulated with this Agreement (and its exhibits and attachments), no other
representations have induced Developer to execute this Agreement, and there are
no representations, inducements, promises, or agreements, oral or otherwise,
between the parties, not embodied herein, which are of any force or effect with
reference to this Agreement or otherwise. No amendment or modification of this
Agreement shall be binding on either party unless written and fully executed.

16.0        Dispute Resolution Procedures

The following shall apply to any controversy between Franchisor and Developer
(including its affiliates) relating (a) to this Agreement, (b) the parties
business activities conducted as a result of this Agreement, or (c) the parties’
relationship or business dealings with each other generally.

The parties shall first use their best efforts to meet and discuss and negotiate
a resolution of the controversy.

If negotiation efforts do not succeed, the parties shall engage in mandatory but
non-binding mediation by a mediator jointly chosen by the parties or if the
parties cannot agree upon a mediator, by the American Arbitration Association
for disputes relating to locations outside of California or Franchise
Arbitration and Mediation Services, Newport Beach, California, for disputes
relating to locations within California.

A mediation meeting will be held at a place and at a time mutually agreeable to
the parties and the mediator.  The Mediator will determine and control the
format and procedural aspects of the mediation meeting which will be designed to
ensure that both the mediator and the parties have an opportunity to present and
hear an oral presentation of each party’s views regarding the matter in
controversy.  The parties agree to use good faith efforts to resolve the
controversy in mediation.

The mediation will be held as soon as practicable after the negotiation meeting
is held.

The mediator will be free to meet and communicate separately with each party
either before, during or after the mediation meeting.
In the event that either party requires a substantial amount of information in
the possession of the other party in order to prepare for the mediation meeting,
the parties will attempt, in good faith, to agree on procedures for the
expeditious exchange of such information.  If the parties fail to agree on such
procedures, the mediator will determine such procedures and which documents and
information will be informally exchanged.

Each party may be represented by one or more other persons, including its
counsel, one or more of its business persons, an accountant and a financial
consultant.  At least one representative of each party must have the authority
to agree upon a settlement of the controversy.

 The mediator may freely express his/her views to the participants on the legal
issues unless a participant objects to his doing so.  The mediator may obtain
assistance and independent expert advice with the agreement of the participants
and at the participants’ expense.  The mediator will not be liable for an act or
omission in connection with the role of mediator, other than for gross
negligence or willful misconduct.

 
11 of 18

--------------------------------------------------------------------------------

 

If requested by the mediator, each party shall prepare a written summary of its
position to the mediator in advance of the mediation meeting.

The mediator may raise legal questions and arguments.

If the parties have failed to reach an acceptable settlement prior to the end of
the mediation meeting, the mediator before concluding the mediation meeting, may
submit to the parties a settlement proposal which the mediator deems to be
equitable to both parties.  Each of the parties will, in good faith, evaluate
the proposal and discuss it with the mediator.  In the event that a settlement
is not reached, neither the terms of the proposed settlement nor either party’s
refusal to agree thereto shall be admissible in any subsequent arbitration or
court proceedings.

If a settlement is reached, the mediator or one of the parties at the request of
the mediator, will prepare a settlement agreement for execution by the
parties.  Such settlement agreement will be revised by the parties and when, in
a mutually acceptable form, executed and delivered to each other, such that each
party shall receive a duplicate original.

The parties will cooperate and continue to mediate until the mediator terminates
the mediation.  The mediate will terminate the mediation upon the earlier of (i)
execution of a settlement agreement, (ii) a declaration by the mediator that the
mediation is terminated, or (iii) completion of a full day mediation meeting
unless extended by agreement of the parties.

At the election of the Franchisor, the provisions of this Section 16 shall not
apply to controversies relating to any fee due the Franchisor by Developer or
its affiliates, any promissory note payments due the Franchisor by Developer, or
any trade payables due the Franchisor by Developer as a result of the purchase
of equipment, goods or supplies.  The provisions of this Section 16 shall also
not apply to any controversies relating to the use and protection of the El
Pollo Loco Marks, the Manual or the El Pollo Loco System, including without
limitation, the Franchisor’s right to apply to any court of competent
jurisdiction for appropriate injunctive relief for the infringement of the El
Pollo Loco Marks or the El Pollo Loco System.

17.0        Severability.

Each 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, contrary to, or in conflict with, any
existing or future law or regulation, by any court or agency having valid
jurisdiction, then such shall be deemed not to be a part of this Agreement, but
such shall not impair the operation of, or affect the remaining portions,
sections, parts, terms and/or provisions of this Agreement, which will continue
to be given full force and effect and bind the parties hereto.

18.0        Applicable Law; Choice of Forum; Waiver of Jury Trial.

This Agreement, after review by Developer and El Pollo Loco, was accepted in the
State of California and shall be governed by and construed in accordance with
the laws of such state. The parties agree that any action brought by either
party against each other in any court, whether federal or state, will be brought
within the state of California.   The parties hereby waive any right to demand
or have trial by jury in any action relating to this Agreement in which the
Franchisor is a party.  The parties consent to the exercise of personal
jurisdiction over them by such courts and to the propriety of venue of such
courts for the purpose of carrying out the provision, and they waive any
objection that they would otherwise have to the same.

19.0        Document Interpretation.

All terms and words used in this Agreement, regardless of the number and gender
in which they are used, shall be deemed and construed to include the singular or
plural tense, and any gender, whether masculine, feminine or neuter, as the
context or sense of this Agreement or any paragraph or clause may require, the
same as if such words had been fully and properly written in the appropriate
number or gender. In the event of a conflict in the language, terms, or
conditions between this Agreement and any Franchise Agreement issued pursuant to
this Agreement, the Franchise Agreement shall control.

 
12 of 18

--------------------------------------------------------------------------------

 

20.0        Covenant Not to Compete.

20.1        To further protect the El Pollo Loco® System while this Agreement is
in effect, Developer and each officer, director, shareholder, member, manager,
partner and other equity owner, as applicable, of Developer, if Developer is an
entity, shall neither directly nor indirectly own, operate, control or any
financial interest in any other business which would constitute a “Competitive
Business” (as hereinafter defined) without the prior written consent of
Franchisor; provided further, that Franchisor may, in its sole discretion,
consent to the Developer’s continued operation of any business already in
existence and operating at the time of execution of this Agreement.  In
addition, Developer covenants that, except as otherwise approved in writing by
the Franchisor, Developer shall not, for a continuous, uninterrupted period
commencing upon the expiration, termination or assignment of this Agreement,
regardless of the cause for termination, and continuing for two (2) years
thereafter, either directly or indirectly, for itself, or through or on behalf
of, or in conjunction with any person, partnership, corporation or other entity,
own, operate, control or have any financial interest in any Competitive Business
which is located or has outlets or restaurant units within the Territory.  The
foregoing shall not apply to operation of an El Pollo Loco® restaurant by
Developer pursuant to a Franchise Agreement with Franchisor or the ownership by
Developer of less than five percent (5%) of the issued or outstanding stock of
any company whose shares are listed for trading on any public exchange or on the
over-the-counter market, provided that Developer does not control or become
involved in the operations of any such company.  For purposes of this Section
20.1, a Competitive Business shall mean a self-service restaurant or fast-food
business which sells chicken and/or Mexican food products, which products
individually or collectively represent more than fifty percent (50%) of the
revenues from such self-service restaurant or fast-food business operated at any
one location during any calendar quarter. A “Competitive Business” shall not
include a full-service restaurant.

20.2        In the event that any provision of Section 20.1 shall be determined
by a court of competent jurisdiction to be invalid or unenforceable, this
Agreement shall not be void, but such provision shall be limited to the extent
necessary to make it valid and enforceable.

21.0        Notice.

For the purpose of this Agreement, all notices shall be in writing and shall be
sent to the party to be charged with receipt thereof either (i) served
personally, or (i) sent by certified or registered United States mail, or (ii)
sent by reputable overnight delivery service, or (iv) sent by
facsimile.  Notices served personally are effective immediately on delivery, and
those served by mail shall be deemed given forty-eight (48) hours after deposit
of such notice in a United States post office with postage prepaid and duly
addressed to the party to whom such notice or communication is
directed.  Notices served by overnight delivery shall be deemed to have been
given the day after deposit of such notice with such service.  Notices served
via facsimile shall be deemed to have been given the day of faxing such
notice.   All notices to El Pollo Loco® shall be addressed as follows:

El Pollo Loco, Inc.
Attn:  Legal Department
3535 Harbor Blvd, Suite 100
Costa Mesa, CA  92626
(714) 599-5503 (fax)

All notices to Developer shall be faxed and mailed or sent via overnight service
to the Developer's number and address shown on Exhibit "B". Either party may
from time to time change its address for the purposes of this Section by giving
written notice of such change to the other party in the manner provided in this
Section.  Notwithstanding anything to the contrary contained herein, the
Franchisor may deliver bulletins and updates to the Developer by electronic
means, such as by the internet (e-mail) or an intranet, if any, established by
Franchisor.

 
13 of 18

--------------------------------------------------------------------------------

 

22.0        Section Headings.

The section headings appearing in this Agreement are for reference purposes only
and shall not affect, in any way, the meaning or interpretation of this
Agreement.

23.0        Acknowledgments.

23.1        Developer acknowledges that it has received a complete copy of the
El Pollo Loco® Disclosure Document, issuance date _______,20__ at least 14
calendar days prior to the date on which this Agreement was executed by
Developer or payment of any monies to the Franchisor.

23.2        Developer acknowledges that it has read and understands this
Agreement, the Franchise Agreement, the attachments thereto and the agreements
relating thereto contained in the Disclosure Document received by Developer on
_____,20__, and that Franchisor has accorded Developer ample opportunity and has
encouraged Developer to consult with advisors of Developer's own choosing about
the potential benefits and risks of entering into this Agreement.

IN WITNESS WHEREOF, the parties hereto have duly executed, sealed and delivered
this Agreement in duplicate original as of the date and year first written
above.

DEVELOPER:
 
EL POLLO LOCO, INC.,
   
a Delaware corporation
     
By: 
   
By: 
 
Its: 
   
Its: 
 

 
14 of 18

--------------------------------------------------------------------------------

 

EXHIBIT "A" TO DEVELOPMENT AGREEMENT

TERRITORY

 
 

--------------------------------------------------------------------------------

 

EXHIBIT "B" TO DEVELOPMENT AGREEMENT

DEVELOPMENT SCHEDULE

FRANCHISE NAME:
     
PRINCIPALS:
     
NOTICE ADDRESS:
     
FAX NUMBER:
     
EMAIL:
     
COMMENCEMENT DATE:
     
EXPIRATION DATE:
     
DEVELOPMENT FEE (SECTION 3.0):
     
DEVELOPMENT SCHEDULE:
 

   
INITIAL
FRANCHISEE
AMOUNT1
   
RESAC
SUBMITTAL
DATES
   
SITE COMMITMENT
DATES 
(Date for delivery of
signed leases or
purchase
agreements)
   
OPENING DATE
OF RESTAURANT
                           
Restaurant # 1
  $ 40,000.00                                                            
Restaurant # 2
  $ 30,000.00                                                            
Restaurant # 3
  $ 30,000.00                          

 

--------------------------------------------------------------------------------

1 Initial Franchise Fee is the total amount applicable to this unit, without
applying the Development Fee deposited with Franchisor at the time of execution
of this Agreement.

 
 

--------------------------------------------------------------------------------

 

EXHIBIT “C” TO DEVELOPMENT AGREEMENT

EXISTING EL POLLO LOCO® RESTAURANTS IN THE TERRITORY

EXHIBIT “D” TO DEVELOPMENT AGREEMENT

PREFERRED DEVELOPMENT PROFESSIONAL AGREEMENT
(Architects, Design/Build Contractors, Contractors, Structural and Civil
Engineers)

This Agreement (the “Agreement”) is made this ____ day of ____________, 20___
(the “Effective Date”), by and between El Pollo Loco, Inc., located at 3535
Harbor Blvd., Costa Mesa, CA 92626 (“EPL”) and ________________________, located
at _______________________________ (hereinafter referred to as “Preferred
Development Professional” or “PDP”).

RECITALS

 
A.
EPL is the franchisor and operator of a national chain of quick-service
restaurants serving marinated flame-grilled chicken and Mexican food products
and meals.  EPL is actively expanding restaurants nationally throughout the
United States, both through company and franchise development.

 
 
B.
EPL wishes to insure that new restaurants in all geographic areas of the country
meet its specific criteria for uniformity and quality, regardless of location or
operation as company or franchised restaurants.  In connection therewith, EPL
desires to establish a network of qualified development professionals who meet
its standards and to designate those individuals as “Preferred Development
Professionals.”

 
 
C.
EPL franchise developers who have executed development agreements with El Pollo
Loco as of January 1, 2008 will only be permitted to use PDP’s in connection
with the development of their EPL Restaurants.

 
 
D.
PDP has examined EPL’s criteria for designation as an EPL PDP and has met the
standards set by EPL and therefore, desires to be included in EPL’s national
network of PDP’s.

 
 
E.
EPL is willing to include PDP in its network of approved development
professionals provided PDP executes this Agreement and agrees to abide by the
terms and conditions contained herein.

NOW THEREFORE, in consideration of the foregoing and of the mutual covenants and
considerations set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereby
agree as follows:

AGREEMENT

1.
Term.   The initial term of this Agreement shall be for two (2) years from the
Effective Date, subject to earlier termination as provided in Paragraph 13
below.  The term shall automatically renew for one (1) year successive terms
unless either party provides sixty (60) days advance written notice in advance
of the expiration date to the other party of its intent not to renew.

 
 

--------------------------------------------------------------------------------

 
 
2.
PDP Designation.  PDP shall be designated as an El Pollo Loco Preferred
Development Professional for use by its franchisees in connection with the
development of their El Pollo Loco Restaurants for the term of this
Agreement.  EPL will include PDP in its list of authorized development
professionals for use by its franchisees and licensees in connection with the
development of their EPL Restaurants.  PDP shall use its best efforts to insure
that the EPL Restaurants for which it performs work or services are developed in
accordance with the requirements of EPL, including approved plans, criteria and
specifications.

 
3.
Proprietary Plans.  EPL shall provide PDP with standard plans and a sample
layout for a typical El Pollo Loco Restaurant and a set of required
construction, equipment and décor specifications (the “Plans”).  PDP
acknowledges that EPL owns the Plans and all proprietary and other property
rights and interests thereto, including trade dress rights, in the design and
layout of its Restaurants.  PDP shall include the following in all contracts
with EPL franchisees or licensees:

 
“The plans and specifications (including design, layout and equipment
specifications) for an EPL Restaurant are the sole property of El Pollo Loco,
Inc.  Use of the plans and specifications is limited to the Restaurant for which
work is being contracted.”
 
4.
Confidentiality Covenant.  PDP agrees to treat and keep the Plans and
information contained therein strictly confidential and limit access to
employees and independent contractors of PDP on a need to know basis only.  PDP
acknowledges that the unauthorized use or disclosure of the Plans or the
confidential information contained therein or otherwise provided by EPL to PDP
will cause irreparable injury to the Company and that damages are not an
adequate remedy.  PDP accordingly covenants that without EPL’s prior written
consent, which consent may only be given by EPL and not by any of its
franchisees or licensees, PDP shall not disclose (except to such employees,
agents, contractors or subcontractors as must have access to such Plans in order
to construct EPL Restaurants) or use or permit the use of such Plans, or any
part thereof, (except as may be required by applicable law or authorized by this
Agreement), or copy, duplicate, record or otherwise reproduce such Plans, in
whole or in part, or otherwise make the same available to any person or source
not authorized in writing by EPL to receive such Plans or the information
contained therein.  This covenant shall survive the expiration or termination of
this Agreement.

 
5.
Compliance with Laws. PDP represents and warrants that it possesses all
licenses, permits, authorizations and other consents required by applicable law
to perform the development activities for which it has contracted with EPL’s
franchisee or licensee.  PDP shall perform all work under such contract in full
compliance with all applicable laws, regulations, ordinances or statutes.  EPL
reserves the right to immediately terminate this Agreement without any
opportunity to cure, should PDP breach its representations or covenants under
this Paragraph 5.

 
 

--------------------------------------------------------------------------------

 
 
6.
Architectural Plans.  PDP acknowledges and agrees that all architectural plans
must be approved by EPL at the preliminary design phase (before construction
ready working drawings are created) and that final plans shall not deviate
significantly from the approved preliminary plans.  Should modifications to the
approved Plans be required by franchisee, its agents, employees or
representatives, or by landlords or governmental agencies, PDP will immediately
notify EPL of same and shall submit the modified Plans to EPL for
approval.   Such approvals by EPL will be limited to items and issues relating
to the El Pollo Loco System only and is not intended to be a verification or
approval of the structure of the building, mechanical systems or document
accuracy.  PDP shall verify that all architectural plans for the construction of
the EPL Restaurant are EPL approved and that only approved plans are used to
create working construction drawings for the restaurants.

 
7.
Construction of the Restaurant.  If PDP is retained by an EPL franchisee or
licensee to act as the general contractor for a Restaurant, it hereby agrees to:
(a) provide a construction schedule to EPL before the start of construction; (b)
provide monthly progress reports to EPL during the construction process; (c)
promptly notify EPL and request its approval regarding any material
modifications to the approved Plans which become necessary during the
construction process (design and specification changes, among other things,
shall be deemed material changes); (d) request final inspection of the
constructed and fully equipped Restaurant by EPL or its authorized consultants;
(e) provide a letter to EPL indicating that the Restaurant has been constructed
or remodeled in substantial conformance with the approved final Plans, including
any changes thereto approved by the Company, and in accordance with all
applicable federal, state and local laws, statutes and ordinances regulating
such construction, including without limitation, building, fire, health and
safety codes.  All construction approvals by EPL will be limited to items and
issues relating to the El Pollo Loco Restaurant system only and are not intended
to be verification or approval of the structure of the building, mechanical
systems or document accuracy.

 
8.
ADA Compliance.  Under the Americans with Disabilities Act (“ADA”), certain
handicap accessibility requirements are placed on any “person” who owns, leases,
leases to, or operates a place of public accommodation.  As an owner, lessor or
operator of a restaurant, EPL franchisees and licensees are liable for failures
to accommodate disabled people as provided for in the ADA.  In approving Plans
submitted by PDP or franchisees, EPL is not an insurer of compliance with the
ADA, and shall not be responsible for failures by franchisees, their architects
or their contractors to construct buildings that comply with the ADA.

 
9.
Certificate of Occupancy.  PDP shall insure that EPL receives a copy of any
certificate of occupancy issued by the applicable governing authority for each
Restaurant for which it performs development professional services within thirty
(30) days after opening of the Restaurant.

 
10.
Use of Trademarks; Press Releases.  PDP shall not use the trademarks, logos or
other intellectual property of EPL at any time for any purpose without the prior
written consent of EPL’s marketing or legal departments.

 
 

--------------------------------------------------------------------------------

 
 
11.
Indemnification and Insurance.  During the term of this Agreement, PDP shall
maintain in full force and effect the kinds of insurance, containing the limits
of liability set forth below:

a)           Automobile Liability - If automotive vehicles are operated by PDP
in PDP performance of PDP's obligations under this Agreement, PDP shall maintain
an automobile liability policy which shall include coverage on all owned,
non-owned and hired vehicles and shall have a minimum limit of liability of not
less than $100,000 per occurrence;

b)           Workers’ Compensation – PDP shall comply with the Workers’
Compensation law of the State wherein the services are to be rendered.  Such
policy shall provide coverage for all persons engaged in activities described in
this Agreement under the employ, supervision or control of PDP; and

c)           General Liability – The policy shall contain a combined single
limit of liability of not less than $1,000,000 per occurrence.

If the foregoing coverage expires, changes, or is canceled, PDP shall notify EPL
within thirty (30) days prior to the effective date of such expiration, change
or cancellation.

PDP agrees to indemnify and hold EPL, its officers, directors, employees,
agents, affiliates, subsidiaries, parent company, successors and assigns
harmless against any and all claims, counterclaims, suits, demands, actions,
causes of action, damages, setoffs, liens, attachments, debts, expenses,
judgments, or other liabilities of whatsoever kind or nature, including
reasonable attorneys' fees and costs, arising from any alleged or actual
negligent, willful, reckless, or wrongful act or omission of PDP, PDP's
officers, directors, employees and agents in PDP's performance of this
Agreement, and from any breach of PDP's representations and warranties or PDP's
obligations of confidentiality herein.  These obligations shall survive the
termination or expiration of the Agreement.

12.
Independent Contractor.  PDP is independent contractor.  EPL is not a party to
any contract between PDP and EPL franchisees.

13.
Termination.  Either party may terminate this Agreement prior to its expiration
date, with or without cause, upon sixty (60) days advance written notice to
EPL.  Notwithstanding the foregoing, in the event of a material breach of this
Agreement or any provision hereof by PDP, EPL may immediately terminate this
Agreement, which termination shall be effective five (5) days after dispatch of
the termination notice to PDP.  The parties agree to use reasonable efforts to
provide concurrent copies of any termination notice to any franchisee with whom
PDP has pending contractual obligations.

14.
Miscellaneous Terms and Conditions.

14.1.        No Implication of Exclusive Use.  Nothing contained in this
Agreement shall be deemed or construed to provide PDP an express or implied
exclusive right to act or serve as a preferred development professional (or in
any other capacity).

14.2.        Relationship of Parties.   The parties agree that except as
expressly set forth herein that nothing contained herein shall make either party
the fiduciary of the other for any purpose whatsoever, nor shall this Agreement
be deemed to create any form of business organization between the parties,
including without limitation a joint venture or partnership.

14.3.        Assignment.  PDP may not assign its rights or delegate its
obligations hereunder without the prior written consent of EPL, which consent
may be withheld in its sole and absolute discretion.  Notwithstanding the
foregoing, EPL may assign this Agreement and its rights and obligations
hereunder (at any time and for any reason) with notice to PDP, but without
obtaining PDP’s prior written consent.

 
 

--------------------------------------------------------------------------------

 

14.4.        Representations and Warranties.  In consideration of EPL entering
into this Agreement, PDP makes the following representations and warranties as
of the Effective Date, each of which is material and is being relied upon by EPL
(and the truth and accuracy of which shall constitute a condition precedent to
EPL’s obligations hereunder).

a)           Power.  PDP has the legal power, right and authority to enter into
this Agreement.

b)           Requisite Action.  All requisite action (corporate, trust,
partnership or otherwise) has been take by PDP in connection with entering into
this Agreement, and by the Effective Date, all such necessary action will have
been taken.

c)           Individual Authority.  The individuals executing this Agreement on
behalf of PDP have the legal power, right and actual authority to bind PDP to
the terms and conditions hereof and thereof.

d)           No Conflict.  Neither the execution or delivery of this Agreement,
nor compliance with the terms of this Agreement conflict with or result in the
material breach of any terms, conditions or provisions of, or constitute a
default under, agreement or instrument to which PDP is a party.

14.5.        Notices.  Any notice to be given hereunder to either party shall be
in writing and shall be given either by personal delivery (including express or
courier service), telecopier transmission, or by registered or certified mail,
with return receipt requested, postage prepaid and addressed as follows:

To EPL:
El Pollo Loco, Inc.
 
3535 Harbor Blvd., Suite 100
 
Costa Mesa, CA 92626
 
Attention: Real Estate Department
   
with copies to:
El Pollo Loco, Inc.
 
3535 Harbor Blvd., Suite 100
 
Costa Mesa, CA 92626
 
Attention: Legal Department
   
To PDP:
                 
With copies to:
             

Any party may, by written notice to the other, designate a different address,
which shall be substituted for the one specified above. Any such notice shall be
deemed to have been delivered upon its receipt or upon the second attempt at
delivery, as evidenced by the facsimile confirmation in the case of notice by
telecopier, or by the regular records of the person or entity attempting
delivery, in all other cases.

14.6.        Time of the Essence.  Time is of the essence of each and every
provision of this Agreement.

14.7.        Further Assurances.  Each of the parties shall execute and deliver
any and all additional papers, documents, and other assurances, and shall do any
and all acts and things reasonably necessary in connection with the performance
of their obligations hereunder and to carry out the intent of this Agreement.

 
 

--------------------------------------------------------------------------------

 

14.8.        Successors and Assigns. All of the provisions of this Agreement
shall inure to the benefit of and shall be binding upon the successors and
permitted assigns of the parties, if any.

14.9.        Amendments.  No provision of this Agreement may be amended except
as set forth in a writing and signed by both parties.

14.10.      Construction of Agreement.  Each party and attorneys for each party
have participated in the drafting and preparation of this Agreement. Therefore,
the provisions of this Agreement shall not be construed in favor of or against
either party, but shall be construed as if both parties equally prepared this
Agreement.

14.11.      Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.

14.12.      No Waiver.  The waiver by one party of the performance of any
covenant, condition or promise, or of the time for performing any act, under
this Agreement shall not invalidate this Agreement nor shall it be considered a
waiver by such party of any other covenant, condition or promise, or of the time
for performing any other act required, under this Agreement. The exercise of any
remedy provided in this Agreement shall not be a waiver of any remedy provided
by law, and the provisions of this Agreement for any remedy shall not exclude
any other remedies unless they are expressly excluded.

14.13.      Severability.  If any provision of this Agreement shall become
illegal, null or void or against public policy, for any reason, or shall be held
by any court of competent jurisdiction to be illegal, null or void or against
public policy, the remaining provisions of this Agreement shall not be affected
thereby and shall remain in force and effect to the full extent permissible by
law.

14.14.      Counterparts.  This Agreement may be executed in counterparts, each
of which shall constitute an original, but all of which together shall
constitute one and the same instrument. The signature page of any counterpart
may be detached there from without impairing the legal effect of the
signature(s) thereon provided such signature page is attached to any other
counterpart identical thereto except having additional signature pages executed
by the other party. Counterparts may be delivered by facsimile provided that
original executed counterparts are delivered to the recipient on the next
business day following the facsimile transmission.

14.15.      Attorneys' Fees, Costs and Expenses.  If any action or proceeding is
instituted to enforce or interpret any provision of this Agreement, the
prevailing party therein shall be entitled to recover its attorneys' fees, costs
and expenses from the losing Party.

14.16.      Survival.  The agreements, indemnity obligations, representations,
covenants and warranties of the parties contained herein shall survive the
termination of the Agreement.

14.17.      Publicity.  PDP shall not issue any press release or otherwise
publicize in any manner the transactions contemplated by this Agreement before
or after the Effective Date without EPL’s prior written consent, which EPL may
withhold in its sole and absolute discretion.

14.18.      Dispute Resolution Procedures.  The following shall apply to any
controversy between the parties relating to this Agreement.

(a)           The parties shall first use their best efforts to meeting and
discuss and negotiate a resolution of the controversy.  If negotiation efforts
do not succeed, the parties shall engage in mandatory but non-binding mediation
by a mediator jointly chosen by the parties or if the parties cannot agree upon
a mediator, by the American Arbitration Association for disputes relating to
locations outside of California or Franchise Arbitration and Mediation Services,
Newport Beach, California, for disputes relating to locations within California.

 
 

--------------------------------------------------------------------------------

 

(b)           A mediation meeting will be held at a place and at a time mutually
agreeable to the parties and the mediator.  The Mediator will determine and
control the format and procedural aspects of the mediation.  The mediation will
be held as soon as practicable after the negotiation meeting is held.

(c)           In the event that either party requires a substantial amount of
information in the possession of the other party in order to prepare for the
mediation meeting, the parties will attempt, in good faith, to agree on
procedures for the expeditious exchange of such information.

(d)           The parties will cooperate and continue to mediate until the
mediator terminates the mediation.  The mediator will terminate the mediation
upon the earlier of (i) execution of a settlement agreement, (ii) a declaration
by the mediator that the mediation is terminated, or (iii) completion of a full
day mediation meeting unless extended by agreement of the parties.

(e)           If after good faith efforts, mediation efforts have failed, the
parties may pursue all available remedies in law and equity.

14.19.     Entire Agreement.  This Agreement constitutes the entire agreement
between the parties pertaining to the subject matter hereof and shall supersede
all prior and contemporaneous agreements, representations, negotiations and
understandings of the parties, oral or written.

IN WITNESS WHEREOF, this Agreement has been executed by the parties as of the
Effective Date first above written.

“EPL”
 
“PDP”
El Pollo Loco, Inc.,
   
A Delaware corporation
 
a
         
By:
   
By:
 
Name: 
   
Name: 
 
Title:
   
Title:
 

 
 

--------------------------------------------------------------------------------