Exhibit 10.1
AIRPORT DEVELOPMENT AGREEMENT
     THIS AIRPORT DEVELOPMENT AGREEMENT (the “Agreement”) is made this 20th day
of July, 2007 by and between THE GROVE, INC., located at 3 Westbrook Corporate
Center, Suite 500, Westchester, Illinois 60154 (“Franchisee”), and ROCKY
MOUNTAIN CHOCOLATE FACTORY, INC., located at 265 Turner Drive, Durango, Colorado
81303 (“Franchisor”).
RECITALS
     A. The Franchisor offers franchises for the establishment of retail stores,
known as “ROCKY MOUNTAIN CHOCOLATE FACTORY Stores” or “Stores” offering gourmet
chocolates and other premium confections, featuring Rocky Mountain Chocolate
Factory® brand boxed chocolates and also confections made at the Stores. The
Stores are operated under the Franchisor’s service mark “ROCKY MOUNTAIN
CHOCOLATE FACTORY” and other trademarks, service marks, logo types,
architectural designs, trade dress and other commercial symbols (collectively,
“Marks”) and pursuant to the Franchisor’s proprietary business format, systems,
methods, procedures, designs, layouts and specifications (“System”) for the
establishment, operation and promotion of the Stores.
     B. The Franchisee operates numerous retail stores (“Grove Stores”) at
airports throughout the United States, selling packaged snack foods, beverages
and frozen treats, under the trademark “THE GROVE” and other marks (“Grove
Marks”).
     C. The Franchisee would like to use the Franchisor’s Marks and System in
connection with the development of ROCKY MOUNTAIN CHOCOLATE FACTORY Stores at
airports throughout the United States, under the terms set forth herein. The
Franchisor desires to grant the Franchisee the right to establish and operate
such Stores under the terms and conditions which are contained in this
Agreement.
     The parties therefore agree as follows:
1. GRANT OF DEVELOPMENT RIGHTS
     1.1. Development Area. The Franchisor grants to the Franchisee the right to
develop and establish Stores using the Franchisor’s Marks and System in those
airports (“Airports”) described in Exhibit A attached hereto (the “Development
Area”). Except as set forth in Section 1.2 below, the Franchisor shall not
establish, nor shall it license any other party to establish, Stores using the
Marks and System within Airports in the Development Area for so long as this
Agreement is in effect.
     1.2. Franchisor’s Reservation of Rights. The Franchisee acknowledges that
the Franchisor reserves the rights, among others: (1) to use and license others
to use, the Marks and System for the operation of ROCKY MOUNTAIN CHOCOLATE
FACTORY Stores, Kiosk Stores and Satellite Stores at any location other than
within Airports in the Development Area; (2) to use and license the use of
different marks and methods in connection with the sale of products or services
similar to those which the Franchisee will sell in its Stores, whether in
alternative channels of distribution or in connection with the operation of
retail stores selling gourmet chocolates or other premium confectionary
products, at any location outside of the Development Area, which businesses are
the same as, or different from Stores, on any terms and conditions as the
Franchisor determines; and (3) to use the Marks to identify and sell any type of
services, products, promotional and marketing efforts or related items made
available by the

 

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Franchisor, in its sole discretion, and to identify products and services
similar to those which the Franchisee will sell, but made available through
alternative channels of distribution (other than Stores), at any location,
excluding the Development Area.
     1.3. Franchise Agreement — First Store Developed. The parties acknowledge
that the ROCKY MOUNTAIN CHOCOLATE FACTORY Franchise Agreement dated May 11, 2007
between the parties (“First Store Agreement”), attached hereto as Exhibit B and
by this reference incorporated herein, will govern the operation of the
Franchisee’s first Store to be opened at the Dallas-Ft. Worth International
Airport. Unless otherwise defined herein, all defined terms in this Agreement
will be defined as set forth in the First Store Agreement, as amended. The
parties acknowledge that the First Store Agreement has been amended to include
terms negotiated by the Franchisor and the Franchisee and that these terms will
be incorporated into all subsequent Franchise Agreements signed by the parties,
except for changes set forth in other addenda to those agreements. The
Franchisee agrees to comply with the terms and conditions of the First Store
Agreement, as amended, as a part of its obligations hereunder and acknowledges
that failure to comply with such First Store Agreement is a breach of this
Agreement.
     1.4. Franchisor’s Products. The Franchisor agrees not to offer or license
others to offer Factory Candy for retail sale in the Development Area other than
through the Franchisee under the terms of this Agreement. In consideration
therefor, the Franchisee agrees that RMCF Products will, within 180 days from
the date of this Agreement, be the exclusive branded candy sold through Grove
Stores. The Franchisee agrees to use point-of-sale marketing that has been
approved in advance by the Franchisor to identify the Factory Candy and other
RMCF Products offered in Grove Stores. The Franchisee will pay the Franchisor a
monthly royalty of * of its Gross Retail Sales of Factory Candy and other RMCF
Products sold in Grove Stores.
2. FEES
     2.1. Initial Franchise Fees. Concurrently with the execution of the First
Store Agreement, the Franchisor acknowledges that the Franchisee has paid *,
representing payment in full of the initial franchise fee for the first Store to
be developed hereunder. For each subsequent Store developed under this
Agreement, an initial franchise fee of * will be due and payable by the
Franchisee on the date the Franchisee signs a Franchise Agreement for a Store in
the Development Area.
     2.2. Commissions on Franchised Stores. If the Franchisee subleases or
otherwise obtains a site in an Airport in the Development Area and an approved
third-party franchisee signs a lease or sublease for such site and signs a
Franchise Agreement for a Store at that site and pays the Franchisor a * initial
franchise fee, the Franchisor will pay the Franchisee a commission equal to
one-third of the initial franchise fee received by the Franchisor, within
30 days after the following conditions have been met:
     a. The Franchisee provides written notice to the Franchisor 30 days’ prior
to the proposed effective date of the lease or sublease and Franchise Agreement,
and includes information reasonably detailed to enable the Franchisor to
evaluate the terms and conditions of the proposed lease or sublease;
     b. The proposed third-party franchisee provides information to the
Franchisor sufficient for the Franchisor to assess its business experience,
aptitude and financial qualification, including completing an application, and
the Franchisor approves the proposed third-party franchisee as qualified to
operate a Store;

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     c. The proposed third-party franchisee completely executes the Franchisor’s
then-current form of Franchise Agreement, which will not include the negotiated
changes that are set forth in the addenda to the First Store Agreement, and pays
the initial franchise fee in full;
     d. The proposed third-party franchisee agrees to complete the Franchisor’s
initial training program, which training must be completed to the Franchisor’s
satisfaction prior to the effectiveness of the lease or sublease and the
Franchise Agreement; and
     e. All amounts due and owing by the Franchisee to the Franchisor are paid
in full.
     If all of the conditions listed above are met to the Franchisor’s
satisfaction, the Franchisee will be entitled to receive a commission equal to
one-third of the * monthly Royalty actually received by the Franchisor from the
Store operated by the third-party franchisee, within 15 days after the
Franchisor actually receives such Royalty payments. The Franchisee will be
entitled to this commission, provided all of the conditions listed above are met
to the Franchisor’s satisfaction, for the initial term of the third-party
franchise agreement. The Franchisee will also be entitled to this commission for
any third-party franchise agreements that are in progress at the expiration date
of this Agreement, but executed after the expiration date of this Agreement,
provided all of the conditions listed above are met to the Franchisor’s
satisfaction.
     2.3. Royalty Fees. The Franchisor agrees that it will charge a * Royalty
fee to the Franchisee for the Dallas-Ft. Worth Airport Store and for the next
two ROCKY MOUNTAIN CHOCOLATE FACTORY Stores developed by the Franchisee under
this Agreement, provided that the Franchisee develops and operates such Stores
itself. After three Franchise Agreements have been signed at a * Royalty fee,
the Franchisor will charge a * Royalty fee for each ROCKY MOUNTAIN CHOCOLATE
FACTORY Store developed and operated by the Franchisee thereafter. All of the
discounted Royalty fee rates discussed in this Section 2.3 will be effective for
only the initial term of a Franchise Agreement and will not apply to any renewal
terms.
     2.4. Separate Franchise Agreements. The parties agree that a separate
Franchise Agreement shall be executed for each Store to be developed under this
Agreement. The Franchisee’s failure to execute any additional Franchise
Agreements or its default in any term of such Franchise Agreements may, at the
option of the Franchisor, be deemed a default under this Agreement and shall
entitle the Franchisor to terminate this Agreement as further provided in
Article 3 below. Each Franchise Agreement to be executed by the Franchisee for
each Store to be developed hereunder shall be in a form substantially similar to
the First Store Agreement, although the Franchisor reserves the right to change
the terms of a Franchise Agreement to conform with the then current form of
Franchise Agreement being offered to new franchisees of the Franchisor.
     2.5. Store Location. All Stores developed by the Franchisee under the terms
of this Agreement shall be developed in an Airport located in the Development
Area.
     2.6. Training and Other Development Assistance. The Franchisee acknowledges
that the Franchisor shall have the right, in the Franchisor’s sole discretion,
to waive the initial training program, which is the same as the training
provided under Section 6.1 of the First Store Agreement, for the second and each
subsequent Store developed and operated by the Franchisee under the terms of
this Agreement.

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3. TERM AND TERMINATION
     3.1. Term. This Agreement shall commence as of the date of execution hereof
and shall end 24 months later, regardless of how many Stores have been developed
during the term. After expiration of the term, or earlier termination of this
Agreement as provided below, the Franchisor shall have the right to establish,
or license any other party to establish, Stores anywhere within the Development
Area.
     3.2. Termination By Franchisor. This Agreement may be terminated by the
Franchisor on 30 days prior written notice, such notice containing a right to
cure such default, if applicable, in the event of any of the following:
     a. If the Franchisee defaults on any term or condition of this Agreement;
or
     b. In the event of any occurrence which would entitle the Franchisor to
terminate any Franchise Agreement executed in furtherance of this Agreement.
This Agreement shall automatically terminate at the end of such 30-day notice
period, unless the Franchisee cures the default set forth in such notice within
said 30-day period.
     3.3. Post-Termination Obligations. In the event of termination of this
Agreement for any reason, the Franchisee shall remain subject to the provisions
of Article 5 of this Agreement regarding nondisclosure and covenants not to
compete, in addition to the terms and conditions of any and all Franchise
Agreements executed in furtherance of this Agreement which have not also been
terminated.
4. ASSIGNMENT
     4.1. Assignment By Franchisor. The Franchisor may transfer or assign its
rights under this Agreement at any time upon notice to the Franchisee, provided
that the Franchisor has fulfilled its obligations hereunder or has made adequate
provisions therefor.
     4.2. Assignment By Franchisee. The Franchisee may not sell, transfer or
assign its rights under this Agreement, unless the Franchisee obtains the
Franchisor’s prior written consent, which consent shall not be unreasonably
withheld if the Franchisee is in compliance with the terms and conditions of
this Agreement and complies with the transfer provisions of the Franchise
Agreement most recently executed by the Franchisor and the Franchisee, which
provisions shall be deemed to be incorporated herein by reference.
     4.3. Franchisor’s Right of First Refusal. In the event of any proposed
sale, gift, transfer or assignment of its rights under this Agreement, the
Franchisee agrees to grant the Franchisor a 30-day right of first refusal to
purchase such rights on the same terms and conditions as are contained in the
most recently executed Franchise Agreement.
5. RESTRICTIVE COVENANTS
     5.1. Restrictive Covenants. During the term and after the termination of
this Agreement or any Franchise Agreement signed in furtherance of this
Agreement, the Franchisee and its officers, partners, directors, agents or
employees who have completed the Franchisor’s training programs or had access to
the Operations Manual, as described in the Franchise Agreement, and/or the
beneficial owners of a majority interest in the Franchisee and their respective
immediate families, shall be subject to all restrictive covenants as set forth
in the First Store Agreement, and in any Confidentiality and

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Noncompetition Agreements executed in conjunction with any Franchise Agreement,
which covenants by this reference are incorporated herein.
6. BUSINESS RELATIONSHIPS
     6.1. Independent Contractor. During the term of this Agreement, the
Franchisee shall be an independent contractor and shall in no way be considered
as an agent, partner or employee of the Franchisor. It is understood and agreed
that no agency or partnership is created by this Agreement. As such, the
Franchisee has no authority of any nature whatsoever to bind the Franchisor or
incur any liability for or on behalf of the Franchisor or to represent itself as
anything other than an independent contractor.
     6.2. Indemnification. The Franchisee shall indemnify and hold harmless the
Franchisor and its officers, directors, agents and representatives (the
“Indemnified Parties”) from all fines, suits, proceedings, claims, demands or
actions of any kind or nature, including reasonable attorneys’ fees, from anyone
whomsoever, directly or indirectly arising or growing out of, or otherwise
connected with the Franchisee’s activities, actions or failure to act, under
this Agreement, or the Franchisee’s operation of its Store(s) developed under
this Agreement. For purposes of this indemnification, claims shall mean and
include all obligations, actual and consequential damages and costs reasonably
incurred in the defense of any claim against the Indemnified Parties, including,
without limitation, reasonable accountants’, attorneys’ and expert witness fees,
costs of investigation and proof of facts, court costs, other litigation
expenses and travel and living expenses. The Franchisor shall have the right to
defend any such claim against it. This indemnity shall continue in full force
and effect subsequent to and notwithstanding the expiration or termination of
this Agreement.
7. MISCELLANEOUS
     7.1. Disputes. The parties agree that any dispute between the parties
arising out of the terms of this Agreement shall be governed by the applicable
provisions of the First Store Agreement, which terms and conditions are by this
reference incorporated herein, including without limitation, all provisions
relating to governing laws, venue and jurisdiction.
     7.2. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of each of the parties’ respective heirs, successors, assigns and
personal representatives.
     7.3. Review. The Franchisee acknowledges that it had a copy of this
Agreement in its possession for a period of time not fewer than 10 full business
days, during which time the Franchisee has had the opportunity to submit the
same for professional review and advice of the Franchisee’s choosing prior to
freely executing this Agreement.
     7.4. No Waiver. No waiver of any condition or covenant contained in this
Agreement or failure to exercise a right or remedy by any party hereto shall be
considered to imply or constitute a further waiver of the same or any other
condition, covenant, right or remedy.
     7.5. Modification. This Agreement may be modified only upon execution of a
written agreement between the parties.
     7.6. Entire Agreement. This Agreement contains the entire agreement between
the parties and supersedes any and all prior agreements, both oral and written,
concerning the subject matter hereof, provided that the First Store Agreement,
addenda thereto and any other Franchise Agreements executed

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by the parties hereto shall remain binding, except to the extent that this
Agreement specifically supersedes any term thereof.
     7.7. Invalidity. If any provision of this Agreement is held invalid by any
court of competent jurisdiction in a final decision from which no appeal is or
can be taken, such provision shall be deemed modified to eliminate the invalid
element and, as so modified, such provision shall be deemed a part of this
Agreement as though originally included. The remaining provisions of this
Agreement shall not be affected by such modification.
     7.8. Notices. All notices required to be given under this Agreement shall
be given in writing, by certified mail, return receipt requested, or by an
overnight delivery service providing documentation of receipt, at the addresses
first set forth above, or at such other address as either party may designate
from time to time by written notice as set forth herein. Notice shall be deemed
effective when deposited in the United States mail postage prepaid or when
received by overnight delivery, as may be applicable.
     7.9. Attorneys’ Fees and Costs. In the event of any default on the part of
either party to this Agreement, in addition to all other remedies, the party in
default will pay the aggrieved party all amounts due and all damages, costs and
expenses, including reasonable attorneys’ fees, incurred by the aggrieved party
in any legal action or other proceeding as a result of such default, plus
interest at the highest rate allowable by law, accruing from the date of such
default.
     7.10. Injunctive Relief. Nothing herein shall prevent the Franchisor or the
Franchisee from seeking injunctive relief to prevent irreparable harm, in
addition to all other remedies.
     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed effective as of the date first above written.

            ROCKY MOUNTAIN CHOCOLATE FACTORY, INC.
    Date: July 20, 2007  By:   /s/ Bryan Merryman         Bryan Merryman, Chief
Operating Officer                THE GROVE, INC.
      By:   /s/ Michelle Dukler     Date: July 23, 2007    Its: President     

Legend:
 

*  
The material has been omitted pursuant to a request for confidential treatment
and such material has been filed separately with the Commission.

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EXHIBIT A
TO AIRPORT DEVELOPMENT AGREEMENT
BETWEEN ROCKY MOUNTAIN CHOCOLATE FACTORY, INC.
AND
THE GROVE, INC.
     The Development Area, as referred to in Section 1.1 of the Area Development
Agreement, shall consist of the following airports:
All airports in the United States where there are no ROCKY MOUNTAIN CHOCOLATE
FACTORY Stores operating or under development pursuant to the terms of an
executed lease, as of the date of this Agreement. The parties acknowledge that
ROCKY MOUNTAIN CHOCOLATE FACTORY Stores are currently located in the following
airports and therefore, these airports are excluded from the Development Area:
Excluded Airports:

  1.  
Denver International Airport
    2.  
Minneapolis/St. Paul International Airport
    3.  
Charlotte, NC International Airport
    4.  
Salt Lake City, UT International Airport
    5.  
Phoenix, AZ International Airport
    6.  
Philadelphia, PA International Airport

 

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EXHIBIT B
TO AIRPORT DEVELOPMENT AGREEMENT
BETWEEN ROCKY MOUNTAIN CHOCOLATE FACTORY, INC.
AND
THE GROVE, INC.
Franchise Agreement dated May 11, 2007 as amended,
between Rocky Mountain Chocolate Factory, Inc. and The Grove, Inc.