KRISPY KREME DOUGHNUT
CORPORATIONFRANCHISE AGREEMENTBASIC TERMS

|A. | Effective
      Date           |                                                                                                              |                    
|-- | ------------------------------ | ------------------------------------------------------------------------------------------------------------ | -------------------
|   | (Insert date Franchisee        |                                                                                                              |                    
|   | executes the
      agreement): |                                                                                                              |                    
|B. | Franchisor:                    | Krispy Kreme Doughnut
      Corporation, a North Carolina corporation                                       
|C. | Store
      Number:            |                                                                                                              |                    
|D. | Store
      Address:           |                                                                                                              |                    
|E. | Store Type & Initial           | _____________                                                                                                | Factory
      Store
|   | Franchise Fee:                 | _____________                                                                                                | Hot
      Shop     
|   |                                | _____________                                                                                                | Fresh Shop/Kiosk   
|F. | Franchisee:                    |                                                                                                              |                    
|   | Franchisees
      Address:    |                                                                                                              |                    
|   | Telephone:                     |                                                                                                              |                    
|   | E-mail
      Address:          |                                                                                                              |                    
|G. | Principal
      Owners:        |                                                                                                              |                    
|H. | Managing
      Director:       |                                                                                                              |                    
|I. | General
      Manager:         |                                                                                                              |                    
|J. | Term:                          | The time period
      commencing on the Effective Date and expiring 15 years after the Effective
      Date.

|Franchisor: |           
|----------- | ----------
|            | (initials)
|           
|Franchisee: |           
|            | (initials)

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TABLE OF CONTENTS

|    |  |                                                                      | Page
|--- |  | -------------------------------------------------------------------- | ----
|1.  |  | BACKGROUND                                                           | 1   
|2.  |  | DEFINITIONS                                                          | 1   
|3.  |  | ACKNOWLEDGMENTS, REPRESENTATIONS, AND WARRANTIES                     | 5   
|4.  |  | GRANT OF
      FRANCHISE                                             | 7   
|5.  |  | FRANCHISORS RESERVATION OF RIGHTS                                   | 7   
|6.  |  | SITE
      SELECTION                                                 | 8   
|7.  |  | LEASE OR PURCHASE OF SITE                                            | 9   
|8.  |  | STORE
      DEVELOPMENT                                              | 9   
|9.  |  | BUILDING, EQUIPMENT, FIXTURES, FURNISHINGS, SIGNS AND
      SUPPLIES | 10  
|10. |  | COMPUTER
      SYSTEM                                                | 11  
|11. |  | STORE OPENING                                                        | 12  
|12. |  | CAPITAL
      IMPROVEMENTS                                           | 12  
|13. |  | INITIAL FRANCHISE FEE AND ROYALTIES                                  | 13  
|14. |  | TRAINING AND
      GUIDANCE                                          | 14  
|15. |  | SYSTEM STANDARDS                                                     | 14  
|16. |  | MARKS                                                                | 15  
|17. |  | CONFIDENTIAL INFORMATION                                             | 16  
|18. |  | PATENTS AND
      INVENTIONS                                         | 17  
|19. |  | WORKS OF AUTHORSHIP AND COPYRIGHTS                                   | 18  
|20. |  | EXCLUSIVE
      RELATIONSHIP                                         | 19  
|21. |  | COMPLIANCE WITH LAW                                                  | 19  
|22. |  | MARKETING AND
      ADVERTISING                                      | 20  
|23. |  | ACCOUNTING, REPORTS AND FINANCIAL STATEMENTS                         | 22  
|24. |  | TRANSFER                                                             | 22  
|25. |  | SUCCESSOR FRANCHISE                                                  | 25  
|26. |  | TERMINATION OF
      FRANCHISE                                       | 26  
|27. |  | EFFECT OF TERMINATION OR EXPIRATION                                  | 27  
|28. |  | RELATIONSHIP OF
      PARTIES/INDEMNIFICATION                        | 30  
|29. |  | MISCELLANEOUS                                                        | 32  
|30. |  | ACKNOWLEDGMENTS                                                      | 35  

|EXHIBIT A       |  | FRANCHISEE INFORMATION                       
|--------------- |  | ---------------------------------------------
|EXHIBIT
      B |  | PRINCIPAL
      OWNERS PERSONAL GUARANTY    
|EXHIBIT C       |  | INVESTOR PERSONAL COVENANTS                  
|EXHIBIT
      D |  | AUTHORIZATION
      FOR ACH DEBITS OR CREDITS
|EXHIBIT E       |  | AUTHORIZED OFF-PREMISES SALES                

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KRISPY KREME DOUGHNUT
CORPORATIONFRANCHISE AGREEMENT

THIS
FRANCHISE AGREEMENT (this Agreement) is made and entered into as of the
Effective Date by and between Franchisor and Franchisee.

|1.  |  | BACKGROUND                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|1.1 |  | Franchisor has
      developed, as a result of considerable time, skill, effort, and money, a
      distinctive system for operating stores called Krispy Kreme Stores that
      offer and serve a variety of doughnuts, beverages, and other authorized
      products and services under the Marks.                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|1.2 |  | Franchisors
      Affiliate, HDN Development Corporation, owns the Marks and has granted
      Franchisor the right to sublicense the Marks to its franchisees for their
      use in operating Krispy Kreme Stores and Commissary
  Facilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|1.3 |  | Franchisor grants
      Franchises to own and operate Krispy Kreme Stores and Commissary Facilites
      to Persons who meet its qualifications and are willing to undertake the
      investment and effort to properly develop and operate them.                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|1.4 |  | Franchisee has
      submitted a Franchise Application to own and operate a Krispy Kreme Store
      at the Site, and Franchisor has accepted the application in reliance on
      all information Franchisee has provided in connection
  therewith.                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|2.  |  | DEFINITIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|2.1 |  | Capitalized terms used
      in this Agreement have the meanings given to them in this Section and in
      the Basic Terms.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|    |  | Account Franchisees bank account as to which
      Franchisee has provided Franchisor with all appropriate account
      information and from which Franchisee has authorized Franchisor to
      withdraw funds by electronic funds transfers.                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|    |  | Affiliate Any person that directly or indirectly
      owns or controls, that is directly or indirectly owned or controlled by,
      or that is under common ownership or control with the referenced person,
      including parents and subsidiaries.                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|    |  | Authorized
      Off-Premises Sales Sales to wholesale
      customers pursuant to an express authorization by Franchisor, the current
      form of which is attached as Exhibit E.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|    |  | Basic Terms The terms of this Agreement set forth
      on the Krispy Kreme Doughnut Corporation Franchise Agreement Basic Terms
      section on the first page hereof.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|    |  | Brand Fund As defined in Section
    22.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|    |  | Commissary Facility
      A manufacturing facility for
      doughnuts and other Products that are supplied to Hot Shops and Fresh
      Shops/Kiosks. Commissary Facilities are not used for retail sales, but may
      distribute and sell to wholesale customers, subject to Franchisors
      authorization pursuant to the Commissary Facility Agreement.                                                                                                                                                                                                                                                                                                                                         
|   
|    |  | Commissary Facility
      Agreement An agreement used by
      Franchisor to grant the right to operate a Commissary Facility at a
      specific location.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|    |  | Competitive
      Business A business, other than a
      Krispy Kreme Store or Commissary Facility, that: (a) makes, sells or
      distributes yeast-raised doughnuts, cake doughnuts, or any other types of
      doughnuts, miniature doughnuts, doughnut holes or any other bakery
      products in any distribution channel to any customer for consumption or
      resale, and such sales constitute ten percent (10%) or more of its total
      sales (or such sales from any single location constitute 10% or more of
      the total sales of that location) during any calendar quarter or calendar
      year; (b) sells coffee or coffee drinks in any distribution channel to
      any

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| |  | customer for consumption or resale,
      and such sales constitute twenty percent (20%) or more of its total sales
      (or such sales from any single location constitute 20% or more of the
      total sales of that location) during any calendar quarter or calendar
      year; (c) is the same as, or similar to, the Krispy Kreme Store concept as
      it evolves over time; or (d) grants franchises or licenses, or establishes
      joint ventures, for the development and/or operation of any business
      referred to in (a) through (c), above. Restrictions in this Agreement on
      having an Ownership Interest in a Competitive Business shall not apply to
      the ownership of shares of a class of securities listed on a stock
      exchange or traded on a public stock market that represents less than
      three percent (3%) of the number of shares of that class of securities
      issued and outstanding.
      Confidential
      Information Certain confidential
      information relating to the development and operation of Krispy Kreme
      Stores and Commissary Facilities, which includes:                                                                                                                  
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| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | (g)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | (h)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | Development Agreement
      If applicable, the Krispy Kreme
      Doughnut Corporation Development Agreement pursuant to which Franchisor
      has granted Franchisee the right to develop Krispy Kreme Stores and
      Commissary Facilities in the Development Area and pursuant to which this
      Agreement has been executed.
      Development AreaIf applicable, the geographic area in which Franchisee
      has the right to develop Krispy Kreme Stores and Commissary Facilities, as
      set forth in the Development Agreement.
      Factory Store A retail sales facility with the manufacturing
      capability to produce fresh doughnuts in accordance with System Standards.
      Additionally, Factory Stores may have some capacity to supply fresh
      doughnuts to Hot Shops and Fresh Shops/Kiosks.
      Force Majeure Any of the following events or circumstances: (a) fire,
      earthquake, storm, hurricane, tornado, flood or other act of God; (b) war,
      act of terrorism, insurrection, rebellion, riots or other civil unrest;
      (c) epidemics, quarantine restrictions or other public health restrictions
      or advisories; and (d) other similar events beyond the reasonable control
      of the party.

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| |  | FranchiseThe rights granted and the obligations imposed pursuant
      to this Agreement that relate to the development and operation of the
      Krispy Kreme Store at the Site.
      Franchise
      AgreementAn agreement, such as this
      Agreement, used by Franchisor to grant franchises for the operation of
      Krispy Kreme Stores at specific locations (including all exhibits, riders,
      guarantees and other agreements used in connection therewith).
      Franchise Application The application submitted by Franchisee
      for the Franchise.
      Franchise Disclosure DocumentThe franchise disclosure document
      required by applicable law.
      Franchisee As defined in the Basic Terms.
      Franchisor As defined in the Basic Terms.
      Fresh Shop/Kiosk A retail sales facility with limited
      manufacturing capabilities (e.g. icing and filling equipment), or no
      manufacturing capabilities, that receives doughnuts from a Factory Store
      or a Commissary Facility and finishes them as necessary to sell in
      accordance with System Standards.
      Fundraising Sales of doughnuts, redemption cards, or coupons to
      charitable, educational, and other nonprofit organizations restricted to
      those located within the STOREs local market area (as Franchisor may
      determine from time to time) for resale (or giving) to
      consumers.
      General ManagerThe general manager of the STORE. The initial general
      manager is identified in the Basic Terms.
      Good StandingThe condition that Franchisee and its Affiliates: (a)
      are current with all payments due to Franchisor, its Affiliates and
      suppliers; and (b) are not in default of any of their obligations under
      this Agreement, any Development Agreement (including any Development
      Schedule), any Franchise Agreement, any Commissary Facility Agreement or
      any other agreement between the parties hereto or any of their
      Affiliates.
      Hot Shop A retail sales facility with an impinger oven and
      limited manufacturing capabilities (e.g., icing and filling equipment)
      that receives doughnuts from a Factory Store or a Commissary Facility and
      finishes them as necessary to sell in accordance with System
      Standards.
      Immediate FamilyThe spouse, parents, brothers, sisters and children,
      whether natural or adopted, of the referenced Person.
      Initial Franchise
      Fee As defined in Section
      13.1
      Krispy Kreme
      Store(s)Stores which Franchisor or any
      of its Affiliates own, operate or franchise and which use the Marks and
      the System. Krispy Kreme Stores include Factory Stores, Hot Shops and
      Fresh Shops/Kiosks, but do not include Commissary Facilities.
      Managing DirectorThe person designated as managing director of
      Franchisees business pursuant to Section 20.2. The initial
      Managing Director is identified in the Basic Terms.
      Marks The current and future trademarks, service marks,
      logos, designs, trade names, and other commercial symbols, together with
      all distinctive trade dress elements, or combinations thereof, used by
      Franchisor to identify the sources of goods and services offered and sold
      at Krispy Kreme Stores, including the trademark and service mark KRISPY
      KREME®.
      Net SalesAll the STOREs revenue from food, beverages, and other
      products and merchandise of any type whatsoever sold, whether or not
      produced at the STORE or acquired from a third party, including Products
      purchased from other Krispy Kreme franchises (regardless whether owned by
      Franchisee) and services rendered at or away from the STORE (whether or
      not such sales are authorized by Franchisor) or from any use of the Marks,
      recorded using the accrual basis of accounting and otherwise in accordance
      with accounting principles generally accepted in the United States.
      Without limiting the foregoing, and for
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| |  | the avoidance of doubt, Net Sales
      (a) includes all amounts Franchisee receives or has the right to receive
      from the conveyance of products and services, whether such sales are made
      for cash or cash equivalents (including credit, debit and gift cards) or
      on credit terms, but excludes (i) sales and similar taxes collected or
      which Franchisee has the right to collect from customers and which
      Franchisee is required by law to remit to a taxing authority, (ii)
      customer refunds, (iii) credits for product returns and (iv) sales or
      delivery of products to other Krispy Kreme Stores or Commissary Facilities
      (regardless whether owned by Franchisee), and (b) shall not be reduced by
      any charge or other provision for uncollectible accounts. Neither the
      inclusion of any type of revenue in the definition of Net Sales nor
      Franchisors demand or receipt of Royalties or Brand Fund contributions on
      such revenues shall constitute waiver or approval of any unauthorized
      sales by Franchisee hereunder, and Franchisor reserves all rights and
      remedies with respect thereto.
      On-Premises SalesSales conducted on-premises to retail customers
      visiting the STORE.
      OwnerEach Person (and permitted transferee of each such Person)
      holding: (a) a direct or indirect, legal or beneficial Ownership Interest
      or voting rights in Franchisee or any Affiliate of Franchisee that owns an
      Ownership Interest or voting rights in Franchisee; (b) a direct or
      indirect, legal or beneficial interest in this Agreement; (c) a direct or
      indirect, legal or beneficial interest in the STORE; or (d) any other
      legal or equitable interest, or the power to vest in himself or herself or
      itself any legal or equitable interest, in the revenue, profits, rights or
      assets arising from any of the foregoing.
      Ownership
      InterestAny direct or indirect, legal
      or beneficial ownership interest of any type, including (a) in relation to
      a corporation, the ownership of shares in the corporation; (b) in relation
      to a partnership, the ownership of a general or limited partnership
      interest; (c) in relation to a limited liability company, the ownership of
      a membership interest; or (d) in relation to a trust, the ownership of a
      legal or beneficial interest of such trust.
      Payment DayThe day of the Week on which Royalties are due, which
      day currently is Friday, but may be changed at Franchisors sole
      discretion.
      PersonAny individual, corporation, limited liability company, general or
      limited partnership, unincorporated association, cooperative or other
      legal or functional entity.
      Principal OwnerAn Owner with an Ownership Interest in Franchisee of
      ten percent (10%) or more.
      Products The current and future products that Franchisor
      authorizes to be offered and sold at Krispy Kreme Stores, including (a)
      fresh doughnuts (including, yeast-raised doughnuts, cake doughnuts,
      miniature doughnuts, and doughnut holes, which doughnuts have various
      types and flavors of fillings, glazes, or other coatings); (b) hot or cold
      fresh-brewed coffee beverages suitable for immediate consumption; (c) hot
      or cold espresso drinks suitable for immediate consumption; (d) frozen
      beverages suitable for immediate consumption; and (e) such other products
      and beverages as we may determine from time to time.
      Reporting Day The day of the Week by which Franchisee is required
      to report Net Sales to Franchisor, which day currently is Tuesday, but may
      be changed at Franchisors sole discretion.
      Restricted PersonFranchisee, its Owners and Affiliates, and members of
      the Immediate Families of Franchisee (if a natural Person), and its Owners
      and Affiliates.
      RoyaltiesAs set forth in Section 13.
      Site The location of the STORE with the street address identified in
      the Basic Terms.
      STOREThe Krispy Kreme Store of the type identified in the Basic Terms
      that Franchisor authorizes Franchisee to operate at the Site pursuant to
      this Agreement. The term includes all of the assets of the STORE,
      including its revenue and income.
      System Those business formats, methods, procedures, signs,
      designs, layouts, equipment, and mixes designated by Franchisor from time
      to time for use in operating Krispy Kreme Stores and Commissary
      Facilities.
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|    |  | System Standards The mandatory and suggested
      specifications, standards, operating procedures and rules that Franchisor
      prescribes from time to time for the operation of Krispy Kreme Stores and
      Commissary Facilities, including the standards, specifications and other
      requirements related to the purchase, preparation, marketing and sale of
      the Products; On-Premises Sales, Authorized Off-Premises Sales; customer
      service; the design, décor and appearance of the STORE; the maintenance
      and remodeling of the STORE and the equipment, fixtures and furnishings
      therein; the use and display of the Marks; the insurance coverage required
      to be carried for the STORE; the training of STORE employees; the days and
      hours of STORE operation; and the content, quality and use of advertising
      and promotional materials.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
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|   
|    |  | System Standards
      Manuals The documents and other media
      that contain the System Standards.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
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|    |  | Term As defined in the Basic
  Terms.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|    |  | TransferorTransfer the Franchise(or
      similar words)  The direct or indirect sale, assignment, transfer,
      exchange, conversion, license, sublicense, lease, sublease, mortgage,
      pledge, collateral assignment, grant of a security, collateral or
      conditional interest or other encumbrance in or on, or other disposition,
      whether voluntary, involuntary, by operation of law or otherwise, of this
      Agreement, of any interest in or right under this Agreement, any form of
      legal or beneficial ownership interest in Franchisee, or any form of
      ownership interest or right to participate in or receive the benefits of
      the assets, revenues, income or profits of Franchisees business, or any
      one or more other acts or events not covered by the foregoing that
      Franchisor reasonably determines to be a form of direct or indirect
      transfer, including: (a) any transfer, redemption or issuance of a legal
      or beneficial ownership interest in the capital stock of, a membership
      interest in, or a partnership interest in, Franchisee or any interest
      convertible into or exchangeable for capital stock of, a membership
      interest in or a partnership interest in, Franchisee; (b) any merger or
      consolidation of Franchisee, whether or not Franchisee is the surviving
      entity, or any conversion of Franchisee from one form of legal entity into
      another form of legal entity, or any sale, exchange, encumbrance or other
      disposition of Franchisees assets; (c) any transfer in connection with or
      as a result of a divorce, dissolution of marriage or similar proceeding or
      a property settlement or legal separation agreement in the context of a
      divorce, dissolution or marriage or similar proceeding, an insolvency,
      bankruptcy or assignment for benefit of creditors, a judgment, a
      corporate, limited liability company or partnership dissolution or
      otherwise by operation of law; or (d) any transfer by gift, declaration of
      trust, transfer in trust, revocation of trust, trustee succession, trust
      termination, discretionary or mandatory trust distribution, occurrence of
      any event (e.g., death of a person) that affects or ripens the rights
      of contingent beneficiaries, exercise of a power of appointment, exercise
      of a withdrawal right, adjudication of Franchisee or any Principal Owner
      as legally disabled, or upon or after Franchisees death or the death of
      any of Franchisees Principal Owners by will, disclaimer or the laws of
      intestate succession or otherwise.
|   
|    |  | Week Any consecutive seven (7) calendar
      day period that Franchisor may designate from time to time, currently
      consisting of each seven (7) calendar day period ending at 11:59 PM on
      each Sunday.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|2.2 |  | Other terms used in
      this Agreement are defined in the context in which they
arise.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
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|3.  |  | ACKNOWLEDGMENTS,
      REPRESENTATIONS, AND WARRANTIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
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|3.1 |  | Franchisee
      acknowledges that Franchisee has read this Agreement and Franchisors
      Franchise Disclosure Document and understands and accepts the terms and
      conditions contained in this Agreement as being reasonably necessary to
      maintain Franchisors high standards of quality and service. Franchisee
      further acknowledges that the uniformity of those standards at each Krispy
      Kreme Store is reasonably necessary to protect and preserve the goodwill
      of the Marks. Franchisee acknowledges that Franchisee has conducted an
      independent investigation of the business venture contemplated by this
      Agreement and recognizes that, like any other business, the nature of the
      business conducted by a Krispy Kreme Store may evolve and change over
      time, that an investment in a Krispy Kreme Store involves business risks,
      and that Franchisees business abilities and efforts are vital to the
      success of the venture. Any information Franchisee acquires from other
      Krispy Kreme Store franchisees relating to their sales, profits, or cash
      flows does not constitute information obtained from Franchisor, nor does
      Franchisor make any representation as                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

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|    |  | to the accuracy of any
      such information or the likelihood of Franchisee achieving comparable
      results. Franchisee acknowledges that, in all of its dealings with
      Franchisor, Franchisors officers, directors, employees and agents act
      only in a representative, and not in an individual, capacity. All business
      dealings between Franchisee and such Persons in connection with this
      Agreement are solely between Franchisee and Franchisor. Franchisee further
      acknowledges that Franchisor has advised Franchisee to have this Agreement
      reviewed and explained to Franchisee by an attorney.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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|3.2 |  | Franchisee represents
      and warrants to Franchisor, as an inducement to Franchisors entry into
      this Agreement, that all statements Franchisee has made and all materials
      Franchisee has submitted to Franchisor in connection with Franchisees
      Franchise Application for and purchase of the Franchise are accurate and
      complete and that Franchisee has made no misrepresentations or material
      omissions to obtain the Franchise. Franchisor has approved Franchisees
      Franchise Application for a franchise for a Krispy Kreme Store in reliance
      on each of Franchisees representations to Franchisor.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
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|3.3 |  | Franchisee represents
      and warrants to Franchisor that Franchisee has the authority to execute
      and deliver this Agreement and to perform Franchisees obligations
      hereunder.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
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|3.4 |  | Franchisee represents
      and warrants to Franchisor that this Agreement has been duly executed and
      delivered by Franchisee and, assuming the due authorization, execution and
      delivery by Franchisor, constitutes a legal, valid and binding obligation
      of Franchisee, enforceable in accordance with its terms.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
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|3.5 |  | Franchisee represents
      and warrants to Franchisor that Franchisees execution and delivery of
      this Agreement does not, and Franchisees performance of its obligations
      under this Agreement will not, with or without the giving of notice or the
      lapse of time or both, (a) conflict with or violate its organizational
      documents, if applicable, (b) conflict with or violate any law, statute,
      ordinance, rule, regulation, order, judgment or decree applicable to
      Franchisee, or (c) conflict with, result in any breach of, or constitute a
      default under, any contract, agreement, lease, license, permit, franchise
      or other instrument or obligation to which Franchisee is a party or by
      which Franchisee is bound.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
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|3.6 |  | Franchisee represents
      and warrants to Franchisor that: (a) Franchisee owns fee simple title to
      the real property and improvements which comprise the STORE; or (b) if
      Franchisee holds a leasehold interest in the STORE, Franchisee has or will
      have a binding and effective lease with a lease term (plus renewal
      options) extending at least to the end of the Term and otherwise
      conforming to Franchisors requirements in accordance with Section
      7.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
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|3.7 |  | If Franchisee is, or
      at any time becomes, a business corporation, partnership, limited
      liability company or other legal entity, Franchisee and each of its
      Principal Owners represent, warrant and agree that: (a) Franchisee is duly
      organized and validly existing under the laws of the state of its
      organization, and, if a foreign business corporation, partnership, limited
      liability company or other legal entity, Franchisee is duly qualified to
      transact business in the state in which the STORE is located; (b)
      Franchisee has the authority to execute and deliver this Agreement and to
      perform its obligations hereunder; (c) true and complete copies of the
      articles of incorporation, articles of organization, operating agreement
      or principles, partnership agreement, bylaws, subscription agreements,
      buy-sell agreements, voting trust agreements, trust agreements and all
      other documents relating to Franchisees ownership, organization,
      capitalization, management and control (Organizational Documents) shall
      be promptly delivered to Franchisor for its approval, which approval shall
      not be unreasonably withheld; (d) any and all amendments, deletions and
      additions to Franchisees Organizational Documents shall be promptly
      delivered to Franchisor for its approval, which approval shall not be
      unreasonably withheld; (e) Franchisees activities are restricted to those
      necessary solely for the development, ownership and operation of Krispy
      Kreme Stores and Commissary Facilities in accordance with this Agreement
      and in accordance with any other agreements entered into with Franchisor
      or any of its Affiliates; (f) the Organizational Documents recite that the
      issuance, transfer or pledge of any direct or indirect legal or beneficial
      ownership interest is restricted by the terms of this Agreement; (g) all
      certificates representing direct or indirect legal or beneficial ownership
      interests now or hereafter issued must bear a legend in conformity with
      applicable law reciting or referring to such restrictions; and (h)
      Franchisee will deliver to Franchisor a Secretary/Clerks/Trustees
      Certificate

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|    |  | or other evidence satisfactory to
      Franchisor that the execution, delivery and performance of this Agreement
      and all other agreements and ancillary documents contemplated hereby or
      thereby have been duly authorized by all necessary action by the
      corporation, partnership, limited liability company or other legal entity,
      as applicable, and are within the legal powers of Franchisees trustee, if
      Franchisee is a trust.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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|3.8 |  | Franchisee and each of its
      Principal Owners represent, warrant, and agree that Exhibit A is
      current, complete and accurate. Franchisee agrees that an updated
      Exhibit A will be furnished promptly to Franchisor, so that
      Exhibit A (as so revised and signed by Franchisee) is at all times
      current, complete and accurate. Each person who is or becomes a Principal
      Owner must execute an agreement in the form Franchisor prescribes,
      undertaking to guarantee and be bound jointly and severally by the terms
      of this Agreement, the current form of which is attached hereto as
      Exhibit B. Each person who is or becomes an Owner, whether or not a
      Principal Owner, must execute an agreement in the form Franchisor
      prescribes, undertaking to be bound by the confidentiality and
      non-competition covenants contained in this Agreement, the current form of
      which is attached hereto as Exhibit C. Each Owner must be an
      individual acting in his/her individual capacity, unless Franchisor waives
      this requirement.
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|3.9 |  | The provisions of Section
      3 constitute continuing representations and warranties, and Franchisee
      and Franchisees Principal Owners shall notify Franchisor immediately in
      writing of the occurrence of any event or the development of any
      circumstance that might render any of the foregoing representations and
      warranties false, inaccurate or misleading.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
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|4.  |  | GRANT OF
    FRANCHISE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
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|4.1 |  | Subject to the terms of and on
      the conditions contained in this Agreement, Franchisor hereby grants to
      Franchisee the right to operate the STORE during the Term and to use the
      Marks and the System in the performance of Franchisees obligations under
      this Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
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|4.2 |  | Franchisee will faithfully,
      honestly, and diligently perform Franchisees obligations under this
      Agreement. Franchisee will continuously exert its best efforts to promote
      and enhance the operation of the STORE and to maximize the sale of
      Products.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
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|4.3 |  | Franchisee may not operate the
      STORE from any location other than the Site without Franchisors prior
      written consent. If Franchisor consents to the relocation of the STORE,
      Franchisor has the right to charge Franchisee for its expenses in
      connection with the relocation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
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|4.4 |  | Franchisee agrees that the STORE
      will be under direct, on-premises management by a trained Managing
      Director or General Manager or one of Franchisees other managers, all of
      whom must have completed training to Franchisors
  satisfaction.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
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|4.5 |  | Franchisee agrees that the STORE
      will not be closed for five (5) or more consecutive days without
      Franchisors prior written consent.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
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|4.6 |  | In addition to selling the
      Products, Franchisee agrees to offer and sell such other goods and
      services as Franchisor may require from time to time in Franchisors sole
      discretion. Franchisee will not, however, sell anything at, from or in
      connection with the STORE, other than the Products and other goods or
      services Franchisor authorizes Franchisee to offer or sell.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
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|4.7 |  | Franchisee may engage only in
      On-Premises Sales at and from the STORE and Authorized Off-Premises Sales,
      and shall not engage in any other types of sales or distribution of
      Products.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
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|5.  |  | FRANCHISORS RESERVATION OF
      RIGHTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
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|5.1 |  | Franchisor and its Affiliates
      (and their respective successors and assigns, by purchase, merger,
      consolidation or otherwise) retain all rights not expressly granted to
      Franchisee in this Agreement, including those with respect to Krispy Kreme
      Stores and Commissary Facilities, the Marks, and the sale of Products,
      including all rights Franchisor expressly reserves in this Section
      5. Franchisee waives, to the fullest extent permitted under applicable
      law, all claims, demands or causes of action arising from or related to
      any of such activities by Franchisor or any of its
  Affiliates.                                                                                                                                                                                                                                                                                                                                                                                                                                                             

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|5.2 |  | No exclusive
      territory, protection, or other right in the contiguous space, area, or
      market of the STORE is expressly or impliedly granted to Franchisee under
      this Agreement, and Franchisor reserves the right to operate and to grant
      others the right to operate Krispy Kreme Stores at any location on such
      terms and conditions as it deems appropriate. Franchisee acknowledges and
      agrees that such Krispy Kreme Stores and Commissary Facilities may be in
      direct competition with the STORE, without regard to any adverse effect on
      the STORE and without any obligation or liability to
  Franchisee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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|5.3 |  | Franchisor reserves
      the right to acquire, develop, and operate, or be acquired by, any
      company, including a company operating one or more food service businesses
      (including food service businesses selling doughnuts or
  coffee).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
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|5.4 |  | Franchisor reserves
      the right to license, sample, sell, or market by any means whatsoever
      (including the Internet) the Products and any goods or services identified
      by the Marks. Such goods and services may be licensed, sampled, sold, or
      marketed in any and all locations and venues, and through any method or
      channel of distribution Franchisor deems appropriate in its sole
      discretion (including wholesale distribution of Products to supermarkets,
      grocery stores, convenience stores, and other retail outlets). Such sales
      may be in direct competition with the STORE, without regard to any adverse
      effect on the STORE and without any obligation or liability to
      Franchisee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
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|6.  |  | SITE
      SELECTION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
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|6.1 |  | Franchisee
      acknowledges that, prior to signing this Agreement, Franchisee (with or
      without Franchisor assistance) located, and Franchisor approved, the Site.
      Franchisee acknowledges and agrees that Franchisors recommendation or
      approval of the Site, and any information regarding the Site communicated
      to Franchisee, do not constitute any acknowledgement, warranty or
      representation of any kind, express or implied, including any warranty or
      representation as to the potential access, visibility or profitability of
      a Krispy Kreme Store at that Site, or for any other purpose. Franchisors
      approval of the Site merely signifies that Franchisor is willing to grant
      a Franchise for a Krispy Kreme Store at that location. Application of
      criteria that have appeared effective with respect to other sites may not
      accurately reflect the potential for all sites, and, after Franchisors
      approval of a site, demographic and/or other factors included in or
      excluded from Franchisors criteria could change, thereby altering the
      potential of a site. The uncertainty and instability of such criteria are
      beyond Franchisors control, and Franchisor will not be responsible for
      the failure of a site Franchisor has recommended or approved to meet
      expectations as to potential revenue or operational criteria. Neither
      Franchisors approval of the Site nor any assistance Franchisor may give
      Franchisee in identifying the Site, constitutes a warranty or
      representation of any kind, express or implied, as to the suitability of
      the proposed Site for a Krispy Kreme Store or for any other purpose.
      Franchisees decision to develop and operate the STORE at the Site is
      based solely on Franchisees own independent investigation of the
      suitability of the Site for a Krispy Kreme Store.
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|6.2 |  | Franchisee must also
      cause to be prepared, and submit for approval by Franchisor, a site plan
      and any modifications to Franchisors basic plans and specifications for
      the STORE, including requirements for dimensions, exterior design,
      materials, interior layout, equipment, fixtures, furniture, signs and
      decorating. Franchisee understands that Franchisee may modify Franchisors
      basic plans and specifications only to the extent required to comply with
      applicable ordinances, building codes and permit requirements and only
      with Franchisors prior written approval. Franchisors exercise of its
      right to approve the Site layout, to approve any plans, to inspect the
      construction or conversion of the STORE shall be solely for the purpose of
      assuring compliance with the System Standards and shall not be construed
      as any express or implied representation or warranty that the STORE
      complies with any applicable laws, codes or regulations (including the
      Americans with Disabilities Act (ADA) or any other federal, state, or
      local law or ordinance regulating standards for the access to, use of, or
      modification of buildings for and by persons whose disabilities are
      protected by law) or that the construction thereof is sound or free from
      defects. Franchisors criteria for approval or disapproval do not
      encompass technical, architectural or engineering considerations.
      Franchisor shall have no liability or obligation with respect to the
      construction or conversion of the STORE.                                                                                                                                                                                                                                                                                                                      

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|7.  |  | LEASE OR
      PURCHASE OF SITE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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|7.1 |  | Franchisee
      must lease, sublease or purchase the Site within one-hundred and eighty
      (180) days after the date of Franchisors site acceptance letter.
      Franchisor has the right to approve the terms of any lease, sublease or
      purchase contract for the Site, and Franchisee agrees to deliver a copy to
      Franchisor for Franchisors approval before Franchisee signs it.
      Franchisee agrees that any lease or sublease for the Site must, in form
      and substance satisfactory to Franchisor, (a) provide for notice to
      Franchisor of Franchisees default under the lease or sublease and an
      opportunity for Franchisor to cure such default; (b) require the lessor or
      sublessor to disclose to Franchisor, on its request, sales and other
      information furnished by Franchisee; (c) give Franchisor the right on any
      termination or expiration (without renewal) of this Agreement to assume
      the lease or sublease without the lessors or sublessors consent; (d)
      give Franchisor the right to enter the STORE to remove signs and other
      tangible property that embodies any of the Marks or that contains or
      embodies patents owned by Franchisor or any of its Affiliates, and provide
      that the lessor and/or sublessor relinquishes to Franchisor, on any
      termination or expiration (without renewal) of this Agreement, any lien or
      other ownership interest, whether by operation of law or otherwise, in and
      to any tangible property, including any outdoor sign, that embodies any of
      the Marks; and (e) require that the lessor and/or sublessor acknowledges
      that Franchisor has no liability or obligation whatsoever under the lease
      or sublease until and unless Franchisor assumes the lease or sublease on
      termination or expiration of this Agreement.
|   
|    |  | Franchisee
      may not execute a lease, sublease or purchase contract pertaining to the
      Site for the STORE or any modification thereof without Franchisors
      approval. Franchisors approval of the lease, sublease or purchase
      contract does not constitute a warranty or representation of any kind,
      express or implied, as to its fairness or suitability or as to
      Franchisees ability to comply with its terms. Franchisor does not, by
      virtue of approving the lease, sublease or purchase contract, assume any
      liability or responsibility to Franchisee or to any third parties.
      Franchisee must deliver a copy of the fully signed lease, sublease or
      purchase contract to Franchisor within five (5) days after its
      execution.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
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|8.  |  | STORE
      DEVELOPMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
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|8.1 |  | Franchisee
      is responsible for developing the STORE. In the System Standards Manuals,
      Franchisor will furnish Franchisee with mandatory and suggested
      specifications and layouts for a Krispy Kreme Store, including
      requirements for dimensions, design, image, interior layout, decor,
      equipment, fixtures, furnishings, construction materials, and signs.
      Franchisee acknowledges that the System Standards Manuals do not contain
      the requirements of any federal, state, or local law, code, ordinance or
      regulation (including building codes, permit requirements, and regulations
      and the ADA or similar rules governing accommodations for persons with
      disabilities). Franchisee is obligated to have prepared all required
      construction plans and specifications to suit the shape and dimensions of
      the Site and to insure that such plans and specifications comply with all
      applicable state, federal, and local laws, codes, ordinances, regulations
      (including building codes, permit requirements, and regulations and the
      ADA or similar rules governing accommodations for persons with
      disabilities). Franchisee is obligated to submit construction plans and
      specifications to Franchisor for approval before construction of the STORE
      is commenced and, at Franchisors request, to submit all revised plans and
      specifications during the course of such construction with as built
      plans to be provided upon completion. Franchisor may be willing to assist
      Franchisee in developing the STORE by recommending engineers and
      architects and otherwise furnishing information to assist Franchisee in
      developing the STORE in accordance with Franchisors
    specifications.                                                                    
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|8.2 |  | Franchisee
      agrees, at its own expense, to do the following with respect to developing
      the STORE at the Site:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|    |  | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|    |  | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|    |  | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

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|    |  | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  | purchase or lease and install all
      required equipment, fixtures, furnishings, and signs required for the
      STORE; and                                                                                                                                         
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  | purchase an opening inventory of
      authorized and approved materials and supplies, certain of which items
      must be purchased from Franchisor, its Affiliates, or suppliers designated
      by Franchisor, all as described in the System Standards
  Manuals.
|   
|8.3 |  | Franchisee acknowledges that
      Franchisor is not responsible for, and shall have no liability for, the
      architecture, design, engineering, or construction of the STORE, for the
      STOREs compliance with any federal, state, or local law (including the
      ADA and any other federal, state or local law or ordinance regulating
      standards for access to, use of the, or modification of buildings for and
      by persons who are protected by law by virtue of such disability or whose
      disabilities are otherwise recognized by law), for any errors, omissions
      or discrepancies of any nature in any drawings or specifications with
      respect to the STORE, or for any other matter relating to the development,
      use or operation of the STORE, even if Franchisor assists in the
      development of the STORE.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|9.  |  | BUILDING, EQUIPMENT, FIXTURES,
      FURNISHINGS, SIGNS AND SUPPLIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|9.1 |  | Franchisee acknowledges that the
      Products, Marks, and System have established significant prestige and
      goodwill and are well-recognized in the mind of the public and the trade.
      In order to preserve such prestige and goodwill, Franchisee understands
      and agrees that it is necessary and appropriate for Franchisor to closely
      control the supply chain for all equipment (including production equipment
      and fixtures, cash register, POS system and computer), fixtures,
      furnishings, signs, delivery vehicles, raw materials (including doughnut
      mixes and coffee beans), supplies, and any other items used or useful in
      developing or operating the STORE or producing, marketing, or selling the
      Products or other goods Franchisor requires Franchisee to
  sell.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|9.2 |  | Franchisee agrees to use in
      developing and operating the STORE (and producing, marketing, and selling
      the Products and other goods Franchisor requires Franchisee to sell) only
      the equipment, fixtures, furnishings, signs, delivery vehicles, raw
      materials, supplies, cash register, POS system, and computers and other
      items that Franchisor has approved from time to time for Franchisee to use
      in conjunction with the STORE as meeting its specifications and standards
      for quality, design, appearance, function and performance in accordance
      with the System Standards. Any deviation from Franchisors mandatory
      specifications and standards as prescribed by the System Standards must
      receive prior written approval from Franchisor. Approval of any item for
      use by Franchisor, its Affiliates, or other developers or franchisees will
      not be construed as approval of such item for Franchisees
  use.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|9.3 |  | Notwithstanding Section
      9.2, Franchisor may require Franchisee to purchase any or all of the
      equipment, fixtures, furnishings, signs, delivery vehicles, raw materials,
      supplies, and other items for the STORE directly from Franchisor or its
      Affiliates or other suppliers it may designate from time to time.
      Franchisee agrees to purchase all such items from Franchisor, its
      Affiliates or designated suppliers, as Franchisor may require. Franchisee
      acknowledges and agrees that Franchisor, its Affiliates and designated
      suppliers have the right to profit from the sale of such items and that
      Franchisor does not act as agent, representative or in any other
      intermediary or fiduciary capacity for Franchisee in Franchisors
      relationship with any designated suppliers. Franchisee acknowledges and
      agrees that (a) Franchisor and/or its Affiliates may receive payments,
      fees, commission or reimbursements from designated suppliers and third
      parties in respect to such purchases, (b) Franchisor and/or its Affiliates
      may have investments in designated suppliers, and (c) Franchisor and/or
      its Affiliates may profit from Franchisees purchases from designated
      suppliers. Franchisor, its Affiliates and designated suppliers shall not
      be liable for any delay in the delivery of ingredients as a result of any
      Force Majeure. Franchisor, its Affiliates and designated suppliers may
      establish policies and procedures from time to time for the allocation and
      distribution of items among Krispy Kreme Stores and Commissary
      Facilities.

10

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|9.4  |  | All equipment
      (including production equipment), fixtures, furnishings, raw materials
      (including doughnut mixes and coffee beans) that Franchisee purchases from
      Franchisor, its Affiliates or designated suppliers shall be at such prices
      and on such purchase terms (including credit, such as COD, and shipping)
      and conditions as Franchisor, its Affiliates or designated suppliers may
      determine from time to time.EXCEPT AS
      OTHERWISE EXPRESSLY PROVIDED IN ANY PURCHASE ORDER ISSUED BY FRANCHISOR OR
      ITS AFFILIATES OR DESIGNATED SUPPLIERS, NEITHER FRANCHISOR, ANY OF ITS
      AFFILIATES NOR ANY DESIGNATED SUPPLIER MAKES ANY WARRANTY OR
      REPRESENTATION, EXPRESS OR IMPLIED, AS TO MERCHANTABILITY, FITNESS FOR
      PARTICULAR PURPOSE OR OTHERWISE WITH RESPECT ANY ITEMS FRANCHISEE IS
      REQUIRED TO PURCHASE FROM ANY OF THEM. NEITHER FRANCHISOR, ANY OF ITS
      AFFILIATES NOR ANY DESIGNATED SUPPLIER WILL HAVE ANY LIABILITY FOR
      SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES IN CONNECTION WITH
      ANY SUCH ITEMS, INCLUDING FRANCHISEES PURCHASE, USE OR RESALE OF ANY SUCH
      ITEMS.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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|9.5  |  | In the event
      Franchisor does not require Franchisee to purchase a particular item from
      Franchisor, its Affiliates, or a designated supplier, Franchisee may
      purchase such item from a supplier Franchisor has approved. If Franchisee
      proposes to purchase any such item from any supplier who is not then
      approved by Franchisor, Franchisee and the proposed supplier must submit
      to Franchisor all information that Franchisor may request in order to
      determine whether to approve the supplier. Franchisor will have the
      unconditional right to approve or disapprove any proposed supplier, and
      Franchisor may approve a supplier conditionally. Within thirty (30) days
      after Franchisor receives all requested information, Franchisor will
      communicate to Franchisee in writing Franchisors decision to approve or
      disapprove Franchisees proposed supplier. Franchisor will evaluate
      proposed suppliers on their ability to comply with applicable standards,
      specifications and procedures, and Franchisor will only approve those
      proposed suppliers that meet Franchisors high standards. Franchisor may
      disapprove any supplier who Franchisor previously approved, and Franchisee
      may not, after receipt of notice of disapproval, reorder from any supplier
      Franchisor has disapproved. Franchisor may prescribe procedures for the
      submission of requests for approval and impose obligations on approved
      suppliers, which will be incorporated in a written license agreement with
      the supplier. Franchisor may obtain from Franchisee and/or such approved
      suppliers reimbursement of Franchisors reasonable costs and expenses
      incurred in connection with the approval process of the suppliers
      compliance with Franchisors requirements. Franchisee acknowledges and
      agrees that Franchisor does not act as agent, representative or in any
      other intermediary or fiduciary capacity for Franchisee in Franchisors
      relationship with approved suppliers. Franchisor may impose limits on the
      number of approved suppliers. Franchisor has the right to monitor the
      quality of services provided by approved suppliers in a manner Franchisor
      deems appropriate and may terminate any approved supplier that does not
      meet Franchisors quality standards and specifications, as may be in
      effect from time to time.
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|9.6  |  | Franchisee agrees to
      place or display at the Sites (interior and exterior) only such signs,
      emblems, lettering, logos, and display materials that Franchisor approves
      from time to time.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
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|10.  |  | COMPUTER
      SYSTEM                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
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|10.1 |  | Franchisee agrees to
      use in the development and operation of the STORE the POS, cash
      register/computer terminals and operating software (Computer System)
      that Franchisor specifies from time to time. Franchisee agrees to install
      and use at the STORE the Computer System that Franchisor specifies from
      time to time and to transmit to Franchisor (and otherwise permit
      Franchisor to collect) in the form and at frequencies it specifies from
      time to time, electronic information from the Computer System. Franchisee
      also agrees to identify Product categories and other items in the Computer
      System in a form that Franchisor specifies. Franchisee agrees to install
      and maintain at the STORE a DSL or cable modem, or similar means of
      networking, and dedicated line that Franchisor may use to access sales
      information and other data on the Computer System. Franchisee is
      responsible for maintaining a secure network environment consistent with
      this Agreement and all applicable legal
requirements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

11

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|10.2 |  | Franchisee acknowledges that
      Franchisor has developed specifications for certain components of the
      Computer System and may modify such specifications and the components of
      the Computer System from time to time. As part of the Computer System,
      Franchisor may require Franchisee to obtain specified computer hardware
      and/or software, including a license to use proprietary software developed
      by Franchisor or others. Franchisors modification of such specifications
      for the components of the Computer System may require Franchisee to incur
      costs to purchase, lease and/or license new or modified computer hardware
      and/or software and to obtain service and support for the Computer System
      during the term of this Agreement. Franchisee acknowledges that Franchisor
      cannot estimate the future costs of the Computer System (or additions or
      modifications thereto) and that the cost to Franchisee of obtaining the
      Computer System (including software licenses) (or additions or
      modification thereto) may not be fully amortizable over the remaining term
      of this Agreement. Within sixty (60) days after Franchisee receives notice
      from Franchisor, Franchisee agrees to obtain the components of the
      Computer System that Franchisor designates and requires.
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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|10.3 |  | Franchisee further acknowledges
      and agrees that Franchisor has the right to charge a reasonable systems
      fee for software or systems, modifications and enhancements specifically
      made for Franchisor that are licensed to Franchisee and other maintenance
      and support services that Franchisor or its Affiliates furnish to
      Franchisee related to the Computer System.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    
|11.  |  | STORE OPENING                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
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|11.1 |  | Franchisee agrees not to open the
      STORE for business until:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
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|     |  | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    
|     |  | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    
|     |  | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    
|     |  | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    
|     |  | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    
|11.2 |  | Franchisee must properly staff
      the STORE prior to opening. Franchisor will supply at no charge an opening
      team that will assist Franchisee for a minimum of seven (7) days in the
      opening of the STORE. However, if Franchisee is developing several Krispy
      Kreme Stores or Commissary Facilities pursuant to a Development Agreement,
      this team will be made available at no charge for the first Krispy Kreme
      Store or Commissary Facility, one-half of a team will be made available at
      no charge for the second Krispy Kreme Store or Commissary Facility, a
      field consultant will be made available at no charge for the third Krispy
      Kreme Store or Commissary Facility and a field consultant may or may not
      be made available at no charge for any subsequent Krispy Kreme Stores or
      Commissary Facilities, at Franchisors sole discretion. No charge means
      Franchisor will be responsible for the teams travel, room and board, and
      salaries, but Franchisee will be responsible for all other charges or
      expenses.                                                                                                                                                                                                                                                                            
|    
|12.  |  | CAPITAL
    IMPROVEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
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|12.1 |  | In addition to the requirements
      of Section 10 pertaining to the Computer System, Franchisor may,
      from time to time, require Franchisee to make certain capital improvements
      with respect to developing or operating the STORE, including: (a) the
      acquisition of new equipment (whether for the Products or other goods
      Franchisor requires Franchisee to sell or otherwise), fixtures,
      furnishings, signs, delivery vehicles, or other fixed assets; (b) periodic
      remodeling; and (c) replacement of obsolete or worn-out improvements,
      equipment, fixtures, furnishings, signs, delivery vehicles, or other fixed
      assets (Capital Improvements).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

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|     |  | Franchisee agrees to make such Capital
      Improvements as Franchisor may specify from time to time in Franchisors
      sole discretion. Franchisee agrees not to make any modifications to any
      required Capital Improvements without Franchisors prior written approval.
      Franchisee further agrees that all intellectual property rights to any
      such Capital Improvements, if applicable, will be the exclusive property
      of Franchisor or its Affiliates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
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|13.  |  | INITIAL FRANCHISE FEE AND
      ROYALTIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
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|13.1 |  | Concurrently with the signing of
      this Agreement, Franchisee agrees to pay Franchisor a nonrecurring initial
      franchise fee in the amount specified in the Basic Terms (Initial
      Franchise Fee). The Initial Franchise Fee is fully-earned,
      non-refundable, and payable to Franchisor on the Effective
  Date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|13.2 |  | On or before the Payment Day each Week,
      Franchisee will pay Franchisor an amount equal to four and one-half
      percent (4.5%) of Net Sales (Royalties) for the preceding Week, provided
      however, Royalties on Authorized Off-Premises Sales shall be the following
      percentages of Net Sales: three and one half (31⁄2%)
      of Net Sales incurred during 2008; two and one-half percent (21⁄2%) of Net Sales incurred during 2009; and one percent
      (1%) of Net Sales incurred during 2010 and thereafter. On or before the
      Reporting Day each Week, Franchisee will report to Franchisor, in the form
      it may require from time to time, the true and correct Net Sales of the
      STORE for the preceding Week.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|13.3 |  | Franchisee agrees to give Franchisor
      authorization, in the form that Franchisor designates from time to time
      (the current from is attached as Exhibit D), for direct debits
      from, or credits to, the Account. Franchisee shall not close the Account
      (or allow the Account to be closed) without first opening and notifying
      Franchisor of an alternate Account, nor shall Franchisee terminate any
      direct debit authorization from the Account without a replacement
      authorization approved by Franchisor. Franchisee hereby authorizes
      Franchisor to initiate debit entries and/or credit entries to the Account
      for payments of Royalties and other amounts payable under this Agreement,
      including purchases for production equipment, fixtures, furnishings,
      doughnut mixes and other ingredients, packaging and all supplies purchased
      from Franchisor and any interest charges due thereon. Franchisee agrees to
      make the funds available in the Account for withdrawal no later than the
      due date for payment. The amount actually transferred from the Account to
      pay Royalties will be based on the STOREs Net Sales reported to
      Franchisor or determined by Franchisor from the records contained in the
      cash register/computer terminals of the STORE. If Franchisee has not
      reported Net Sales of the STORE to Franchisor for any reporting period as
      required above, Franchisee hereby authorizes Franchisor to debit the
      Account in an estimated amount based on prior reports of Net
    Sales.
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|13.4 |  | If at any time Franchisor determines that
      Franchisee has under-reported the Net Sales of the STORE, or underpaid
      Royalties or any other amounts due to Franchisor under this Agreement,
      Franchisee hereby authorizes Franchisor to initiate immediately a debit to
      the Account in the appropriate amount, including interest as provided for
      in this Agreement. Any overpayment will be credited to the Account through
      a credit effective as of the first reporting date after Franchisor and
      Franchisee determine that such credit is due.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|13.5 |  | All amounts that Franchisee owes Franchisor
      will bear interest after their due date at the rate of one and one-half
      percent (1.5%) per month or the highest contract rate of interest
      permitted by law, whichever is less. Franchisee acknowledges that this
      Section does not constitute Franchisors agreement to accept any payments
      after they are due or Franchisors commitment to extend credit to, or
      otherwise finance Franchisees operation of, the STORE. Franchisees
      failure to pay all amounts when due constitutes a material breach and
      grounds for termination of this Agreement, as provided in Section
      26 hereof, notwithstanding the provisions of this Section
      13.5.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|13.6 |  | Notwithstanding any designation Franchisee
      might make, Franchisor has sole discretion to apply any of Franchisees
      payments to any of its past due indebtedness to Franchisor in any
      sequence. Franchisee acknowledges and agrees that Franchisee has no right
      to set off any amounts that Franchisee claims Franchisor owes Franchisee
      against Royalties, Brand Fund contributions, payments for purchases, or
      any other amounts Franchisee owes Franchisor under this Agreement or
      otherwise.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

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|14.  |  | TRAINING AND
      GUIDANCE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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|14.1 |  | Before the STORE
      begins operating, Franchisor will furnish training on the operation of a
      Krispy Kreme Store as follows. Franchisor will furnish a training program
      for up to two (2) STORE managers furnished at Franchisors designated
      training facility and/or at an operating Krispy Kreme Store, at
      Franchisors discretion. The STORE managers are required to complete
      training to Franchisors satisfaction. Although Franchisor will furnish
      training to these managers of the STORE at no additional fee or other
      charge, Franchisee will be responsible for the managers wages, salaries,
      travel, room and board, and living expenses during training. Franchisee
      agrees to replace a manager immediately if Franchisor determines that he
      or she is not qualified to serve in this capacity at the STORE. Franchisor
      will furnish the same training program to one (1) additional manager of
      the STORE per year that Franchisee hires after the STORE is open, without
      fee or other charge, subject to the schedules for the training program in
      effect from time to time. Franchisee will be responsible for the managers
      wages, salaries, travel, room and board, and living expenses during
      training.                                                                                                                                                                                             
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|14.2 |  | Franchisor may require
      managers of the STORE to attend and successfully complete periodic or
      additional training programs, and Franchisor may also offer optional
      training programs. Except as provided in Section 14.1, Franchisor
      has the right to charge reasonable fees for providing any such initial,
      periodic or additional training programs. Franchisee will be responsible
      for the managers wages, salaries, travel, room and board, and living
      expenses incurred by Franchisee and Franchisees personnel in attending
      any training programs. Franchisee shall immediately replace any managers
      who fail to successfully complete any training program.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
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|14.3 |  | Franchisor will
      furnish Franchisee periodic guidance with respect to the System, including
      improvements and changes to the System. Such guidance, at Franchisors
      discretion, will be furnished in the form of the System Standards Manuals,
      bulletins and other written materials, consultations by telephone or in
      person at Franchisors offices or at the STORE, or by any other means of
      communications. At Franchisees request, Franchisor may provide special
      assistance for which Franchisee will be required to pay the fees and
      charges Franchisor may establish from time to time. If Franchisee requests
      or Franchisor requires additional or special training for Franchisees
      employees, all of the expenses that Franchisor incurs in connection with
      such training, including per diem charges and travel and living expenses
      for Franchisors personnel, will be Franchisees
  responsibility.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
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|15.  |  | SYSTEM
      STANDARDS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    
|15.1 |  | Franchisor will loan
      Franchisee one (1) copy of its System Standards Manuals solely for use in
      operating the STORE during the Term. The System Standards Manuals at all
      times will remain Franchisors property, and they are protected by
      copyright. Franchisee will keep its copy of the System Standards Manuals
      current and in a secure location at the STORE and shall return them to
      Franchisor immediately upon request, upon termination, or expiration of
      this Agreement or upon any Transfer. If any copies of the System Standards
      Manuals in Franchisees possession are lost, destroyed or significantly
      damaged, Franchisee will obtain a replacement copy at Franchisors then
      applicable charge. Franchisee may not at any time copy, duplicate, record,
      or otherwise reproduce any part of the System Standards Manuals or allow
      any unauthorized persons access to any System Standards Manuals, including
      those that are made available electronically, nor may Franchisee post all
      or any part of the System Standards Manuals on any limited access intranet
      sites without Franchisors approval. Franchisee may not distribute any
      part of the System Standards Manuals and may not disclose any part of the
      System Standards Manuals to any person, other than its employees who have
      a need to know the contents of the System Standards Manuals in order to
      perform their jobs.
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|15.2 |  | During the Term,
      Franchisee will comply with all of the System Standards and other
      requirements contained in System Standards Manuals, in addition to all
      applicable laws, regulations, rules, by-laws, orders and ordinances in
      connection with its operation of the STORE. In the event of a dispute
      relating to the contents of the System Standards Manuals, the master copy
      of the System Standards Manuals maintained by Franchisor at its principal
      office is controlling. Franchisor may at any time and from time to time
      change the System Standards Manuals to reflect changes in System
      Standards.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

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|15.3 |  | To determine whether
      Franchisee is in compliance with this Agreement and all System Standards,
      Franchisor and/or Franchisors agents have the right at any time during
      regular business hours, and without prior notice to Franchisee, to: (a)
      inspect the STORE; (b) observe, photograph and videotape the operations of
      the STORE; (c) remove samples of any Products, materials or supplies for
      testing and analysis; (d) interview personnel of the STORE; (e) interview
      customers of the STORE and to require Franchisee to present to Franchisee
      customers any evaluation forms periodically prescribed by Franchisor and
      to participate in and/or request its customers to participate in any
      surveys performed by or on behalf of Franchisor; and (f) inspect and copy
      any books, records and documents relating to the operation of the
      STORE.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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|16.  |  | MARKS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
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|16.1 |  | Franchisee
      acknowledges that HDN Development Corporation is the Owner of the Marks
      and that Franchisor has the right to sublicense the use of the Marks.
      Franchisee further acknowledges that Franchisees right to use the Marks
      is derived solely from this Agreement and is limited to the performance of
      Franchisees responsibilities and obligations hereunder in accordance with
      the terms hereof. Franchisee acknowledges that its unauthorized use of any
      of the Marks will constitute a material breach of this Agreement,
      warranting immediate termination of this Agreement by Franchisor at
      Franchisors election. Franchisee acknowledges and agrees that its usage
      of the Marks and any goodwill established thereby shall inure solely to
      the benefit of the Owner of the Marks and that this Agreement does not
      confer any goodwill or other interests in any of the Marks upon Franchisee
      or Franchisees Owners (other than the rights specifically granted by this
      Agreement). All provisions of this Agreement applicable to the Marks apply
      to any additional trademarks, service marks, logos, trade dress and
      commercial symbols Franchisor authorizes Franchisee to use. Franchisee may
      not at any time during or after the Term contest, or assist any other
      person in contesting, the validity or ownership of any of the
    Marks.                                                                                                                                                                                                                                                                                                                                                         
|    
|16.2 |  | Franchisee shall use
      the Marks as the sole brand and other source identifier of the STORE,
      provided Franchisee shall identify itself as the independent owner and
      operator of the STORE in the manner Franchisor prescribes. Franchisee
      shall use the Marks only as Franchisor prescribes or allows in writing,
      whether in connection with the sale of Products and the operation of the
      STORE, or otherwise.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    
|16.3 |  | Franchisee and
      Franchisees Owners, affiliates and agents may not: (a) challenge the
      validity of any of the Marks or any registration or application for
      registration therefore, or attempt to claim ownership of or to register
      anywhere any of the Marks or any derivation or colorable imitation
      thereof; (b) attempt to claim ownership of or to register anywhere any
      trademark, service mark, trade name, or trade dress confusingly similar to
      any of the Marks; (c) use any of the Marks or any other trademark or trade
      dress confusingly similar thereto in any manner that would jeopardize
      Franchisors rights in the Marks; or (d) do any act that would invalidate
      registration for any of the Marks. Franchisee may not use any of the Marks
      as part of any corporate or legal business name or with any prefix, suffix
      or other modifying words, terms, designs or symbols (other than logos
      licensed to Franchisee hereunder), or in any modified form, nor may
      Franchisee use any of the Marks in connection with the performance or sale
      of any unauthorized products or services or in any other manner Franchisor
      has not expressly authorized in writing. Franchisee agrees to display the
      Marks prominently in the manner Franchisor prescribes, including at the
      STORE, on packaging and serving materials that Franchisor designates and
      in connection with forms and advertising and marketing materials.
      Franchisee agrees to give such notices of trademark and service mark
      registrations and such other trademark and service mark notices as
      Franchisor specifies and to obtain any fictitious or assumed name
      registrations required under applicable law.
|    
|16.4 |  | Franchisee agrees to
      notify Franchisor immediately of any apparent infringement of, or
      challenge to, any of the Marks, or of any claim by any Person of any
      rights in any of the Marks, and Franchisee agrees not to communicate with
      any Person other than Franchisor, Franchisors attorneys and Franchisees
      attorneys in connection with any such apparent infringement, challenge or
      claim. Franchisor has sole discretion to take such action as Franchisor
      deems appropriate and the right to control exclusively any litigation,
      U.S. Patent and Trademark Office proceeding or any other proceeding
      arising out of any such apparent infringement,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

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|     |  | challenge or claim or
      otherwise relating to any of the Marks, including the exclusive right to
      utilize counsel of Franchisors choice to prosecute or defend any such
      litigation or proceeding. Any award recovered in any such action or
      proceeding shall belong exclusively to Franchisor, or, as appropriate,
      Franchisors Affiliates. Franchisee agrees to sign any and all instruments
      and documents, render such assistance and do such acts and things as, in
      the opinion of Franchisor and/or Franchisors attorneys, may be necessary
      or advisable to protect and maintain Franchisors interests in any
      litigation or U.S. Patent and Trademark Office proceeding or other
      proceeding or otherwise to protect and maintain Franchisors interests in
      the Marks.                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|16.5 |  | Franchisee may not
      register, or attempt to register, any of the Marks as part of any Internet
      domain name or URL, and may neither display nor use any of the Marks or
      other of Franchisors or its Affiliates intellectual property in
      connection with, or associate the System with (through a link or
      otherwise) any website advertising, address or listing on the World Wide
      Web or any other portion of the Internet without Franchisors prior
      written consent.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    
|16.6 |  | Franchisee may not use
      any of the Marks to incur any obligation or indebtedness on behalf of
      Franchisor or its Affiliates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    
|16.7 |  | Franchisee hereby
      assigns to Franchisor all tangible media of expression derived from any of
      the Marks, and agrees to execute such further assignments as Franchisor
      may request. Franchisee shall take all actions and sign all documents
      necessary to give effect to the purpose and intent of this Section
      16. Franchisee irrevocably appoints Franchisor as the true and lawful
      attorney-in-fact for Franchisee and authorizes Franchisor to take such
      actions and to execute, acknowledge and deliver all such documents as may
      from time to time be necessary to convey to Franchisor all rights granted
      by this Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    
|16.8 |  | Franchisor may, in its
      sole discretion, modify or discontinue the use of any of the Marks and/or
      to use one or more additional or substitute trademarks or service marks.
      Franchisee agrees to comply with Franchisors directions with regard to
      such modification, discontinuance, addition, or substitution of use of any
      Mark. Franchisor will not be obligated to reimburse Franchisee for any
      expense or loss of revenue related thereto.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    
|16.9 |  | Franchisee
      acknowledges that the Marks have established prestige and goodwill and are
      well recognized in the mind of the public and the trade, and that it is of
      great importance to Franchisor that the high standards and reputation
      symbolized by the Marks be maintained in the manufacture, marketing, and
      sale of the various Products and other authorized goods bearing and
      services utilizing the Marks. Accordingly, all items of Products
      manufactured, marketed, or sold, and services rendered, by Franchisee
      pursuant to this Agreement shall be of high quality as determined by
      Franchisor in its sole discretion. They shall be suitable for the
      exploitation of the Marks to the best advantage and the protection and
      enhancement of the Marks and the goodwill associated therewith. Franchisor
      shall have the right to, and shall, exercise quality control over
      Franchisees use of the Marks to the degree reasonably necessary to
      maintain the validity thereof and to protect the goodwill associated
      therewith, including but not limited to the right to inspect and monitor
      Franchisees use of the Marks in any manner and time prescribed by
      Franchisor.
|    
|17.  |  | CONFIDENTIAL
      INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    
|17.1 |  | Franchisor will
      disclose to Franchisee such parts of the Confidential Information as
      Franchisor deems necessary or advisable from time to time for the
      performance of Franchisees obligations under this Agreement. Franchisee
      acknowledges and agrees that Franchisee and its Owners and Affiliates will
      not acquire any interest in or right to use the Confidential Information,
      other than the right to use it in the performance of Franchisees
      obligations under this Agreement, and that the use or duplication of the
      Confidential Information in any other business would constitute an unfair
      method of competition with Franchisor and with other developers and
      Franchisees of Krispy Kreme Stores. Franchisee agrees to disclose the
      Confidential Information to Franchisees Owners and to Franchisees
      employees only to the extent reasonably necessary for the performance of
      Franchisee obligations under this Agreement. Franchisees Owners must
      execute the form of Investor Personal Covenants Regarding Confidentiality,
      Non-Competition and Non-Solicitation attached hereto as Exhibit
      C.                                                                        

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|17.2 |  | Franchisee
      acknowledges and agrees that the Confidential Information is confidential,
      is Franchisors proprietary and valuable asset, includes trade secrets
      owned by Franchisor and Franchisor Affiliates and is disclosed to
      Franchisee solely on the condition that Franchisee, Franchisees Owners
      and employees who have access to the Confidential Information agree, and
      Franchisee agrees that, during and after the Term, Franchisee,
      Franchisees Owners, Franchisees Affiliates and Franchisees
      employees:                                                                                                                                                                                                                                                                                                                        
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|     |  | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    
|     |  | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    
|     |  | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    
|     |  | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    
|     |  | Without
      limiting the foregoing, Franchisee, and each of its Owners, as applicable,
      each (i) acknowledge the possibility that they may gain access to
      Franchisors material non-public information and/or that of Franchisors
      parent company, Krispy Kreme Doughnuts, Inc. (KKDI), and that the
      securities laws prohibit trading in KKDI securities while in possession of
      such information, and (ii) agree to refrain from trading in KKDI
      securities in violation of such laws.                                                                                                                                                                                                                                                                                                                                                                  
|    
|17.3 |  | Notwithstanding anything to the contrary contained in this
      Agreement and provided Franchisee has obtained Franchisors prior written
      consent, the restrictions on Franchisee disclosure and use of the
      Confidential Information will not apply to the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    
|     |  | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    
|     |  | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    
|18.  |  | PATENTS
      AND INVENTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    
|18.1 |  | Franchisor
      and/or its Affiliates have obtained certain patent protection and may seek
      additional patent protections for other aspects of the System, the
      Products, and/or other technology related to the development and operation
      of Krispy Kreme Stores and Commissary Facilities and the production,
      marketing, and sale of the Products, or otherwise, including all
      improvements thereto. Nothing in this Agreement shall be construed as
      transferring ownership of any patents or patent applications from
      Franchisor or its Affiliates to Franchisee. Nothing in this Agreement
      shall be construed as transferring the right to sublicense any patents or
      patent applications from Franchisor or its Affiliates to
    Franchisee.                                                                                         
|    
|18.2 |  | Franchisee
      agrees to promptly disclose to Franchisor and/or its Affiliates, and
      Franchisee agrees not to disclose to any other Person or permit any other
      Person to use (absent Franchisors prior written consent), any and all
      inventions (which term inventions includes any invention, idea, concept,
      method, technique, material, design, discovery, know-how, development,
      improvement, product, process, or innovation), including all improvements
      thereto, which are developed by Franchisee, Franchisees Owners, or
      Franchisees Affiliates, whether or not constituting protectable
      intellectual property, which are in any way related to the System, the
      Products, the development or operation of Krispy Kreme Stores or
      Commissary Facilities, or the production, marketing, or sale of the
      Products.

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|18.3 |  | Franchisee hereby agrees to
      assign, and does assign, to Franchisor and/or the Affiliates Franchisor
      designates all right, title, and interest in any invention, patent
      application, or patent conceived of or reduced to practice which is in any
      way related to the System, the Products, the development or operation of
      Krispy Kreme Stores or Commissary Facilities, or the production,
      marketing, or sale of the Products. Franchisor will have no obligation to
      make payments to Franchisee or any other Person with respect to any such
      assignments. Franchisee agrees that all such inventions, patent
      applications, and patents referenced above shall belong to Franchisor
      and/or Franchisors Affiliates, and that all right, title, and interest
      therein shall be the sole and exclusive property of Franchisor and/or
      Franchisors Affiliates, except that Franchisee shall be entitled to use
      all such inventions without charge by Franchisor in connection with this
      Agreement for the Term.                                                                                                                                                                                                                                     
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|18.4 |  | Franchisee agrees to assist
      Franchisor and/or Franchisors Affiliates in the evaluation and
      documentation of any such inventions, patent applications, and patents
      referred to above. Franchisee also agrees to assist Franchisor and/or
      Franchisors Affiliates in the documentation of such assignment in any way
      necessary to transfer such interest to Franchisor and/or Franchisors
      Affiliates. Franchisee also agrees to assist Franchisor and/or
      Franchisors Affiliates in obtaining and maintaining such interest,
      including signing any declaration, patent application, assignment of
      rights, power of attorney, or other documents in such form and substance
      as Franchisor may require related to such invention or interest.
      Franchisee further agrees to assist Franchisor and/or Franchisors
      Affiliates in the protection and enforcement of any such interest,
      including testifying in any court action brought to enforce, protect, or
      defend such interest or invention.                                                                                                                                                                                                                                                    
|    
|19.  |  | WORKS OF AUTHORSHIP AND
      COPYRIGHTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    
|19.1 |  | Franchisee agrees that all works
      (defined herein as including works of authorship, works in any tangible
      medium, writings, documents, and computer programs) authored, made, or
      produced by Franchisee, Franchisees Owners, or Franchisees Affiliates
      that are in any way related to the System, the Products, the development
      or operation of Krispy Kreme Stores or Commissary Facilities, or the
      production, marketing, or sale of the Products, whether or not such works
      are copyrightable, are works-made-for-hire and that Franchisee will not
      have, under this Agreement or otherwise, any right, title, or interest of
      any kind or nature in and to such works, and that all rights therein are
      the sole and exclusive property of Franchisor and/or its
    Affiliates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    
|19.2 |  | If any portion of any work
      described above is not considered a work-made-for-hire for Franchisor or
      its Affiliates, Franchisee hereby agrees to assign, and does assign, to
      Franchisor and/or the Affiliates Franchisor designates, all right, title,
      and interest in any work authored, made, or produced by Franchisee or its
      Owners or Affiliates (whether alone or in conjunction with one or more
      other persons) in the course of involvement with Franchisor under this
      Agreement or otherwise relating to the System, the Products, the Marks,
      the development or operation of Krispy Kreme Stores or Commissary
      Facilities, or the production, marketing, or sale of the Products.
      Franchisor will have no obligation to make payments to Franchisee or any
      other Person with respect to any such assignment. Franchisee agrees that
      all such works referenced above shall belong to Franchisor and/or its
      Affiliates, and that all right, title, and interest therein, including any
      copyrights, shall be the sole and exclusive property of Franchisor and/or
      its Affiliates, except that Franchisee shall be entitled to use all such
      works at the STORE (if authorized by Franchisor) without charge by
      Franchisor.
|    
|19.3 |  | Franchisee agrees to assist
      Franchisor in the evaluation, documentation, and registration of any such
      work described above. Franchisee also agrees to assist Franchisor in the
      documentation of such assignment in any way necessary to transfer such
      interest to Franchisor or its Affiliates. Franchisee also agrees to assist
      Franchisor in obtaining and maintaining such interest, including signing
      any assignment of rights, copyright application, power of attorney, or
      other document in such form and substance as Franchisor may require
      related to such work or interest. Franchisee further agrees to assist
      Franchisor in the protection and enforcement of any such interest,
      including testifying in any court action brought to enforce, protect, or
      defend such work.                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

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|20.  |  | EXCLUSIVE
      RELATIONSHIP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|20.1 |  | Franchisee acknowledges
      and agrees that Franchisor would be unable to (a) protect the Confidential
      Information against unauthorized use or disclosure; (b) preserve the
      prestige, integrity, and goodwill of the Products, Marks, and System; or
      (c) encourage the free exchange of ideas and information among Krispy
      Kreme Stores and Commissary Facilities if franchisees and owners of Krispy
      Kreme Stores and Commissary Facilities or their owners were permitted to
      engage in or benefit from certain competitive activities. Franchisee also
      acknowledges that Franchisor has granted the franchise rights to
      Franchisee in consideration of and reliance on Franchisees agreement that
      Franchisee and its Owners will deal exclusively with Franchisor.
      Therefore, except as expressly authorized by this Agreement or another
      written agreement with Franchisor, Franchisee agrees that during the term
      of this Agreement, without Franchisors prior written consent, neither
      Franchisee, nor any other Restricted Person will:                                               
|    
|     |  | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    
|     |  | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    
|     |  | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    
|     |  | (iv)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    
|     |  | (v)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    
|20.2 |  | At all times during the
      Term, Franchisee will designate a Managing Director of its business
      pursuant to this Agreement who shall complete Franchisors mandatory
      training program to Franchisors satisfaction. The initial Managing
      Director is identified in the Basic Terms. The Managing Director will use
      his or her full-time efforts to fulfill Franchisees obligations under
      this Agreement and under other Franchise Agreements and any Commissary
      Facility Agreements, and will not directly or indirectly engage in any
      other business or activity that requires any significant management
      responsibility or time commitments, or that otherwise conflicts with
      Franchisees obligations under this Agreement. If the Managing Director is
      terminated in that role, or if the Managing Director does not carry out
      his or her responsibilities or otherwise perform in accordance with this
      Agreement, Franchisee will promptly designate a replacement, and each such
      replacement shall complete Franchisors mandatory training program to
      Franchisors satisfaction.
|    
|21.  |  | COMPLIANCE WITH
      LAW                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    
|21.1 |  | In operating the STORE,
      Franchisee agrees to comply with all laws, including, but not limited to,
      all federal, state, and local laws, rules, regulations, ordinances, court
      orders, and decrees. Franchisee agrees that its failure to comply with
      these laws is a material breach and grounds for termination of this
      Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

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|21.2 |  | Franchisee and Franchisees
      Principal Owners represent and warrant to Franchisor that neither
      Franchisee nor any Principal Owner is identified, either by name or an
      alias, pseudonym or nickname, on the lists of Specially Designated
      Nationals or Blocked Persons maintained by the U.S. Treasury
      Departments Office of Foreign Assets Control. Further, Franchisee and
      Franchisees Principal Owners represent and warrant that neither has
      violated and agree that neither will violate any law (in effect now or
      which may become effective in the future) prohibiting corrupt business
      practices, money laundering or the aid or support of persons or entities
      who conspire to commit acts of terror against any person or government,
      including acts prohibited by the U.S. Patriot Act, U.S. Executive Order
      13244, or similar law.          
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|22.  |  | MARKETING AND
      ADVERTISING                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    
|22.1 |  | Franchisor has established a fund
      (the Brand Fund) for the creation, production and/or implementation of
      advertising, promotional, marketing, and public relations programs and
      materials Franchisor deems appropriate. Franchisee agrees to contribute to
      the Brand Fund amounts (as determined by Franchisor from time to time) not
      more than one percent (1%) of the Net Sales of the STORE, payable by
      electronic funds transfer in the same manner as the Royalties. Krispy
      Kreme Stores and Commissary Facilities located in the U.S. and owned or
      operated by Franchisor shall contribute to the Brand Fund at least on the
      same basis.                                                                                                                                                                                                                              
|    
|22.2 |  | Franchisor will direct all
      programs funded by the Brand Fund. Periodically, Franchisor may give
      Franchisee, at no cost, samples of advertising, marketing, and promotional
      formats and materials produced and funded by the Brand Fund. Franchisee
      may purchase additional copies of these materials at cost.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    
|22.3 |  | The Brand Fund will be accounted
      for separately from Franchisors other funds and will not be used to
      defray any of its general operating expenses, except for reasonable
      salaries, administrative costs and overhead Franchisor may incur in
      activities related to the administration of the Brand Fund and its
      programs, including conducting market research, preparing advertising and
      marketing materials and collecting and accounting for contributions to the
      Brand Fund. Franchisor may spend in any fiscal year an amount greater or
      less than the aggregate contributions of all Krispy Kreme Stores and
      Commissary Facilities to the Brand Fund in that year, and the Brand Fund
      may borrow from Franchisor or other lenders to cover deficits in the Brand
      Fund or cause the Brand Fund to invest any surplus for future use by the
      Brand Fund.
|    
|22.4 |  | Franchisor will prepare annually
      a statement of monies collected and costs incurred by the Brand Fund and
      furnish Franchisee a copy upon Franchisees written request. Except as
      otherwise expressly provided in this Section 22, Franchisor assumes
      no direct or indirect liability or obligation with respect to the
      maintenance, direction or administration of the Brand Fund. Franchisor
      does not act as trustee or in any other fiduciary capacity with respect to
      the Brand Fund.                                                                                                                                                                                                                                                                                                                                                                                                  
|    
|22.5 |  | Franchisor may operate the Brand
      Fund through a separate entity whenever it deems appropriate. The
      successor entity will have all of the rights and duties specified in
      Sections 22.1 through 22.8.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    
|22.6 |  | Franchisor cannot ensure that
      Brand Fund expenditures in or affecting any geographic area are
      proportionate or equivalent to Brand Fund contributions by contributors
      operating in that geographic area or that any contributor benefits
      directly or in proportion to its Brand Fund contribution.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    
|22.7 |  | Franchisor has the right, but no
      obligation, to use collection agents and institute legal proceedings to
      collect Brand Fund contributions at the Brand Funds expense. Franchisor
      may also forgive, waive, settle and compromise any and all claims for
      contributions to the Brand Fund. Except as expressly provided in
      Sections 22.1 through 22.8, Franchisor assumes no direct or
      indirect liability or obligation to Franchisee for collecting amounts due
      to, maintaining, directing or administering the Brand Fund.                                                                                                                                                                                                                                                                                                                                                                
|    
|22.8 |  | Franchisor may at any time defer
      or reduce the Brand Fund contributions of one or more franchisees and,
      upon thirty (30) days prior written notice to Franchisee, reduce or
      suspend Brand Fund contributions and operations for one or more periods of
      any length and terminate (and, if terminated, reinstate) the Brand Fund.
      If Franchisor terminates the Brand Fund, it will distribute all unspent
      monies to its franchisees, and to Franchisor and its Affiliates, in
      proportion to their, and Franchisors, respective Brand Fund contributions
      during the preceding twelve (12) month period.                                                                                                                                                                                                                                                                              

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|22.9  |  | Franchisee will not
      execute or conduct any advertising or promotional activity in relation to
      the STORE or the System without Franchisors prior written approval.
      Franchisee must submit annual marketing plans to Franchisor in a form
      Franchisor specifies. Such annual marketing plans require Franchisor
      approval.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     
|22.10 |  | Franchisee will be
      responsible for conducting, with Franchisors guidance, a grand opening
      marketing program (the Grand Opening Marketing Program) during the
      period commencing thirty (30) days before and ending ninety (90) days
      after the opening of the STORE. The Grand Opening Marketing Program will
      utilize public relations and advertising, media, and promotional materials
      that Franchisor has developed or approved. Amounts so spent on the Grand
      Opening Marketing Program, up to one percent (1%) of the STOREs Net
      Sales, will be credited against Franchisees requirement to spend three
      percent (3%) of the STOREs Net Sales, as set forth in Section
      22.11, for the first year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     
|22.11 |  | During each twelve
      (12) month period of the Term, Franchisee agrees to spend for advertising
      and promotion of the STORE not less than three percent (3%) of the STOREs
      Net Sales and to submit plans for such programs for Franchisors approval
      or disapproval in accordance with schedules prescribed by Franchisor. For
      these purposes, advertising expenditures include amounts spent for
      advertising media, such as television, radio, newspaper, billboards,
      posters, direct mail, yellow pages, collateral promotional and novelty
      items, advertising on public vehicles, such as cabs and buses, and, if not
      provided by Franchisor, the cost of producing approved materials necessary
      to participate in these media. Advertising expenditures do not include
      Brand Fund contributions or amounts spent for items which Franchisor, in
      its reasonable judgment, deems inappropriate for meeting the minimum
      advertising requirement, including permanent on-premises signs and menu
      boards, lighting, menus, premiums, discounts, free offers, charitable
      contributions, fundraising activities, and employee incentive programs.
      Franchisor will have the right to review Franchisees books and records
      from time to time to determine Franchisees expenditures for local
      advertising and promotion.
|     
|22.12 |  | Before Franchisee uses
      any advertising, promotional or marketing materials that Franchisor has
      not prepared or previously approved, Franchisee must send samples of all
      such materials to Franchisor for approval. If Franchisee does not receive
      Franchisors written disapproval within thirty (30) days after Franchisor
      receives the materials, they are deemed approved. Franchisee may not use
      any advertising, promotional, or marketing materials that Franchisor has
      disapproved.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     
|22.13 |  | Franchisee agrees that
      any advertising, promotion and marketing it conducts will be completely
      clear and factual and not misleading and conform to the highest standards
      of ethical marketing and the promotion policies and System Standards that
      Franchisor prescribes from time to time.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     
|22.14 |  | At Franchisors
      option, Franchisor may establish one or more websites to advertise,
      market, and promote Krispy Kreme Stores, the Products, and/or the Krispy
      Kreme franchise system (each a System Website). If Franchisor
      establishes a System Website, Franchisor may require Franchisee to
      participate in such System Website by including information relating to
      the STORE. Franchisor will control website traffic and registration of
      additional domain names.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     
|22.15 |  | Franchisee may not
      develop, maintain, or authorize any other website that mentions or
      describes Franchisee or the STORE or that displays any of the Marks
      without obtaining written approval from Franchisor.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     
|22.16 |  | Franchisor has the
      right to establish local and/or regional advertising cooperatives for
      Krispy Kreme Stores in Franchisees local or regional area, covering such
      geographical areas as Franchisor may designate from time to time.
      Franchisee must participate in such advertising cooperatives and their
      programs and abide by their by-laws. Franchisee must contribute such
      amounts to the advertising cooperatives as they determine from time to
      time in accordance with their by-laws. Any Krispy Kreme Stores owned by
      Franchisor or any of its Affiliates located in such designated local or
      regional areas will contribute to the cooperatives on at least the same
      basis. Contributions to such local and regional advertising cooperatives
      are credited toward the annual three percent (3%) advertising expenditures
      required by Section 22.11.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

21

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|23.  |  | ACCOUNTING, REPORTS
      AND FINANCIAL STATEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|23.1 |  | Franchisee will, at
      Franchisees expense, retain all records relating to the development and
      operation of the STORE. All such records shall be kept at the premises of
      the STORE, unless Franchisor otherwise approves. Franchisee will furnish
      to Franchisor via the medium Franchisor prescribes from time to time, in a
      form consistent with its then-current accounting practices and procedures:
      (a) by each Reporting Day, reports of the STOREs sales, cost of goods
      sold, labor expense and number of transactions for the preceding Week; (b)
      within thirty (30) days after the end of each month, an operating income
      statement of Franchisee, the STORE, or both for such month and fiscal year
      to date, prepared in accordance with generally accepted accounting
      principles consistently applied; (c) within forty-five (45) days after the
      end of each fiscal quarter, a balance sheet and income statement of
      Franchisee, the STORE, or both for such quarter and fiscal year to date,
      prepared in accordance with generally accepted accounting principles
      consistently applied; (d) within one hundred twenty days (120) days after
      the end of Franchisees fiscal year, a balance sheet and an income
      statement for the STORE and/or Franchisee for such fiscal year (reflecting
      all year-end adjustments), and a statement of cash flow of the STORE,
      prepared in accordance with generally accepted accounting principles
      consistently applied; and (e) upon request by Franchisor, such other data,
      reports, information and supporting records as Franchisor may from time to
      time prescribe.                                                                                                                                                                                                                                                                                                     
|    
|23.2 |  | Franchisee agrees to
      maintain and to furnish to Franchisor, upon request, complete copies of
      all withholding, income, sales, value added, use and service tax returns
      filed by Franchisee reflecting activities of the STORE.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    
|23.3 |  | Franchisor has the
      right to (a) disclose data derived from all reports; (b) require
      Franchisee to have audited financial statements prepared on an annual
      basis; and (c) to access all cash registers/computer terminals and
      Franchisees Computer System and retrieve all information relating to the
      STORE, as often as it deems appropriate. Franchisee will take such action
      as may be necessary to provide such access to Franchisor. Furthermore,
      Franchisee will immediately report to Franchisor any events or
      developments which may have a significant or material adverse impact on
      the operation of the STORE, Franchisees performance under this Agreement,
      or the goodwill associated with the Marks and Krispy Kreme Stores.
      Franchisee will sign and verify as correct and complete each report and
      financial statement submitted by Franchisee in the manner prescribed by
      Franchisor.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    
|23.4 |  | Each year, Franchisor
      requires that Franchisee submit an annual business plan for Franchisors
      review. Further, Franchisor has the right to audit at any time during
      regular business hours, and without prior notice to Franchisee, to inspect
      and audit, or cause to be inspected and audited, the business, financial
      and tax records of the STORE and Franchisee. Franchisee will fully
      cooperate and cause its employees and agents to fully cooperate with
      Franchisors representatives and independent accountants hired by
      Franchisor to conduct any such inspection or audit. Franchisors right to
      audit includes the right to access the Computer System. In the event any
      such inspection or audit reveals an understatement of the Net Sales of the
      STORE, Franchisee will pay to Franchisor, within fifteen (15) days after
      receipt of the inspection or audit report, the Royalty payments and Brand
      Fund contributions (and any required advertising cooperative
      contributions) due on the amount of such understatement, plus interest (at
      the rate and on the terms provided in this Agreement) from the date
      originally due until the date of payment. Further, in the event such
      inspection or audit is made necessary by Franchisees failure to furnish
      timely any reports or supporting records required to be submitted under
      this Agreement or if an understatement of Net Sales for the period of any
      audit is determined by any such audit or inspection to be greater than two
      percent (2%), Franchisee will reimburse Franchisor for the cost of such
      inspection or audit, including legal fees, accountants fees and the
      travel expenses, room and board, per diem charges, and other associated
      expenses for Franchisors employees. The foregoing remedies are in
      addition to all other remedies and rights contained in this Agreement or
      under applicable law.
|    
|24.  |  | TRANSFER                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    
|24.1 |  | This Agreement is
      fully transferable by Franchisor (without any obligation to provide notice
      to Franchisee or obtain Franchisees consent) and will inure to the
      benefit of any assignee or other legal successor to Franchisors
      interests. Franchisee agrees that Franchisor will have the right, from
      time to time, to delegate                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

22

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|     |  | the
      performance of any portion of or all of its obligations and duties under
      this Agreement or otherwise in connection with the System to designees,
      whether the same are Franchisors agents or independent contractors with
      which Franchisor has contracted to provide such services or perform such
      duties.                                                                                                                                                                                                                                                                                                                                                                                                          
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|24.2 |  | Franchisees
      rights and duties under this Agreement are personal to Franchisee, or if
      Franchisee is a business corporation, partnership, limited liability
      company or any other legal entity, its Owners. Accordingly, neither
      Franchisee nor any of its Owners may Transfer the Franchise without
      Franchisors prior approval and without complying with the terms and
      conditions of Section 24. Any Transfer without such approval or
      compliance constitutes a breach of this Agreement, and is void and of no
      force or effect. Notwithstanding the foregoing, Franchisee may not under
      any circumstances directly or indirectly subfranchise or sublicense any of
      its rights hereunder.
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|24.3 |  | If
      Franchisor has not exercised its right of first refusal under Section
      24.5, Franchisor will not unreasonably withhold its approval of a
      Transfer of the Franchise that meets all of the reasonable restrictions,
      requirements and conditions Franchisor imposes on the Transfer, the
      transferor(s) and/or the transferee(s) from time to time, which shall in
      any event include, the following:                                                                                                                                                                                                                                                                                                                
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |  | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |  | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |  | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |  | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |  | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |  | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |  | (g)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |  | (h)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

23

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|     |  | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | If Franchisee (or any
      of its Owners or Affiliates) finances any part of the sales price of the
      transferred interest, Franchisee and/or its Owners or Affiliates must
      agree that all obligations of the transferee, and security interests
      reserved by any of them in the assets transferred, will be subordinate to
      the transferees obligations to pay all amounts due Franchisor and its
      Affiliates and to otherwise comply with this Agreement, all Franchise
      Agreements, Commissary Facility Agreements, and Development Agreements
      being transferred and any other agreements to be executed by the
      transferee;
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|     |  | (j)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | Franchisee and its
      Owners must execute non-competition and non-solicitation covenants, in
      form and substance satisfactory to Franchisor, substantially similar to
      those contained in Section 27.3; and                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    
|     |  | (k)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | Franchisee and its
      Owners and Affiliates must execute such other documents and do such other
      things as Franchisor reasonably requires to protect its rights under this
      Agreement and all Development Agreements, Franchise Agreements, Commissary
      Facility Agreements and other agreements being transferred.                                                                                                                                                                                                                                                                                                                                     
|    
|24.4 |  | Franchisors
      approval of a Transfer of the Franchise does not constitute: (a) a
      representation as to the fairness of the terms of any agreement or
      arrangement between Franchisee or its Owners and the transferee or as to
      the prospects for success by the transferee; or (b) a release of
      Franchisee and its Owners, a waiver of any claims against Franchisee or
      its Owners or a waiver of Franchisors right to demand the transferees
      compliance with this Agreement or any other agreements being transferred.
      Any approval shall apply only to the specific Transfer of the Franchise
      being proposed and shall not constitute Franchisors approval of, or have
      any bearing on, any other proposed Transfer of the Franchise.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    
|24.5 |  | If
      Franchisee or any of its Owners desires to Transfer the Franchise (other
      than by gift or bequest), Franchisee or such Owners must obtain abona fide,executed written offer from a responsible and fully disclosed
      purchaser (which must contain a confidentiality covenant by Franchisee and
      the prospective buyer to which Franchisor shall be an intended third party
      beneficiary) and must deliver immediately to Franchisor a complete and
      accurate copy of such offer. If the offeror proposes to buy any other
      property or rights from Franchisee or any of its Owners or Affiliates
      (other than rights under any Development Agreements, Franchise Agreements
      or Commissary Facility Agreements) as part of thebona fideoffer, the
      proposal for such property or rights must be set forth in a separate,
      contemporaneous offer that is fully disclosed to Franchisor, and the price
      and terms of purchase offered to Franchisee or its Owners for the Transfer
      of the Franchise must reflect thebona
      fideprice offered therefor and not
      reflect any value for any other property or rights.                                                                                                                                             
|    
|24.6 |  | Franchisor
      has the option, exercisable by notice delivered to Franchisee or its
      Owners within thirty (30) days from the date of delivery of a complete and
      accurate copy of such offer to Franchisor, to purchase such interest for
      the price and on the terms and conditions contained in such offer,
      provided that: (a) Franchisor may substitute cash for any form of payment
      proposed in such offer; (b) Franchisors credit shall be deemed equal to
      the credit of any proposed purchaser; (c) Franchisor shall have not less
      than ninety (90) days from the option exercise date to consummate the
      transaction; and (d) Franchisor shall not be required to pay deposits
      (such as earnest money) or to escrow funds prior to closing. Franchisor
      has the right to investigate and analyze the business, assets and
      liabilities and all other matters Franchisor deems necessary or desirable
      in order to make an informed investment decision with respect to the
      fairness of the terms of the right of first refusal. Franchisor may
      conduct such investigation and analysis in any manner Franchisor deems
      reasonably appropriate, and Franchisee and its Owners must cooperate fully
      with Franchisor in connection therewith.
|    
|24.7 |  | If
      Franchisor exercises its option to purchase, Franchisor is entitled to
      purchase such interest subject to all representations and warranties,
      closing documents, releases, non-competition covenants and indemnities as
      Franchisor reasonably may require, provided if Franchisor exercises its
      option as a result of a written offer reflected in a fully negotiated
      definitive agreement with the proposed purchaser, Franchisor will not be
      entitled to any additional representations, warranties, closing documents
      or indemnities that will have a materially adverse effect on Franchisees
      rights and obligations under the definitive
agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

24

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|     |  | If Franchisor does not exercise
      its option to purchase, Franchisee or its Owners may complete the sale to
      such offeror pursuant to and on the exact terms of such offer, subject to
      Franchisors approval of the Transfer as provided in Sections 24.2
      and 24.3, provided that if the sale to such offeror is not
      completed within ninety (90) days after delivery of such offer to
      Franchisor, or if there is a change in the terms of the offer, Franchisee
      must promptly notify Franchisor and Franchisor shall have an additional
      option to purchase (on the terms of the revised offer, if any, and
      otherwise as set forth herein) during the thirty (30)-day period following
      Franchisees notification of the expiration of the ninety (90)-day period
      or the change to the terms of the offer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|24.8 |  | Neither Franchisee nor any of its
      Owners or Affiliates may issue or sell, or offer to issue or sell, any of
      Franchisees securities or any securities of any of its Affiliates,
      regardless of whether such sale or offer would be required to be
      registered pursuant to the provisions of the Securities Act of 1933, as
      amended, or the securities laws of any other jurisdiction and regardless
      of the means by which such sale is conducted, directly or indirectly, or
      by operation of law (including by merger, consolidation, reorganization or
      otherwise) without obtaining Franchisors prior consent and complying with
      all of its requirements and restrictions concerning use of information
      about Franchisor and its Affiliates. Neither Franchisee nor any of its
      Owners or Affiliates may issue or sell Franchisees securities or the
      securities of any of its Affiliates if: (1) such securities would be
      required to be registered pursuant to the Securities Act of 1933, as
      amended, or such securities would be owned by more than 35 persons; or (2)
      after such issuance or sale, Franchisee or such Affiliate would be
      required to comply with the reporting and information requirements of the
      Securities Exchange Act of 1934, as amended. Any memorandum or other
      communications circulated in connection with any solicitation of offers to
      purchase that would require Franchisors consent to Transfer the Franchise
      (through whatever form of transaction, whether through direct or indirect
      sale of assets or securities, by operation of law or otherwise) shall be
      subject to approval by Franchisor.
|    
|25.  |  | SUCCESSOR
    FRANCHISE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    
|25.1 |  | Upon expiration of the Term,
      Franchisor will grant Franchisee a successor franchise on Franchisors
      then-current terms if Franchisee and each of its Owners and Affiliates are
      in full compliance with the provisions of this Agreement and any other
      agreements with Franchisor or any of its Affiliates, and provided that the
      following conditions are met:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    
|     |  | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    
|     |  | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    
|     |  | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    
|     |  | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    
|     |  | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    
|     |  | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    
|25.2 |  | Once Franchisor receives notice
      from Franchisee in accordance with Section 25.1(c) above,
      Franchisor will give Franchisee notice, within ninety (90) days after
      Franchisors receipt of Franchisees notice and any supporting information
      requested by Franchisor, of Franchisors decision: (a) to grant
      Franchisee                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

25

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|     |  | a successor franchise; (b) to grant Franchisee a successor
      franchise on the condition that deficienciesof the STORE, and/or
      in its operation of the STORE, or such other matters as Franchisor may
      indicate are deficient in its sole discretion are corrected; or (c) not to
      grant Franchisee a successor franchise. If Franchisors notice states that
      Franchisee must cure certain deficiencies of the STORE, its operation or
      otherwise as a condition to the grant of a successor franchise, Franchisee
      will have thirty (30) days from the receipt of such notice to cure such
      deficiencies. If Franchisee does not cure such deficiencies, Franchisor
      will give Franchisee written notice of a decision not to grant a successor
      franchise, based upon Franchisee failure to cure such deficiencies, within
      thirty (30) days after the expiration of the cure period, provided,
      however, that Franchisor will not be required to give Franchisee such
      notice if Franchisor decides not to grant Franchisee a successor franchise
      due to Franchisees breach of this Agreement during the cure period or the
      thirty (30) day period thereafter.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|26.  |  | TERMINATION OF FRANCHISE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    
|26.1 |  | Franchisee
      is in material breach of this Agreement, and this Agreement will
      automatically terminate without notice, at Franchisors discretion, if:
      (a) Franchisee becomes insolvent by reason of its inability to pay its
      debts as they mature; (b) Franchisee is adjudicated bankrupt or insolvent;
      (c) Franchisee files a petition in bankruptcy, reorganization or similar
      proceeding under the bankruptcy laws of the United States or has such a
      petition filed against Franchisee, which is not discharged within thirty
      (30) days; (d) a receiver or other custodian, permanent or temporary, is
      appointed for Franchisees business, assets or property; (e) Franchisee
      requests the appointment of a receiver or makes a general assignment for
      the benefit of creditors; (f) a final judgment against Franchisee in the
      amount of Fifty Thousand Dollars ($50,000.00) or more remains unsatisfied
      of record for sixty (60) days or longer; (g) Franchisees bank accounts,
      property or accounts receivable are attached; (h) execution is levied
      against Franchisees business or property; (i) suit is filed to foreclose
      any lien or mortgage against any of Franchisees assets and such suit is
      not dismissed within thirty (30) days; (j) Franchisee voluntarily
      dissolves or liquidates or has a petition filed for corporate or
      partnership dissolution and such petition is not dismissed within thirty
      (30) days; or (k) Franchisees assets, property or interest are blocked
      under any law, ordinance or regulation relating to terrorist activities or
      if Franchisee is otherwise in violation of any such law, ordinance or
      regulation.
|    
|26.2 |  | In addition
      to Franchisors right to terminate pursuant to other provisions of this
      Agreement and under applicable law, Franchisor has the right to terminate
      this Agreement, effective upon delivery of notice of termination to
      Franchisee, if Franchisee or any of its Principal Owners or
      Affiliates:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    
|     |  | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    
|     |  | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    
|     |  | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    
|     |  | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    
|     |  | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    
|     |  | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    
|     |  | (g)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    
|     |  | (h)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

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|     |  | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | fails to report
      accurately Net Sales, to establish, maintain and/or have sufficient funds
      available in the Account as required by Section 13.3 or fails to
      make payment of any amounts due Franchisor or any of its Affiliates, and
      does not correct such failure within ten (10) days after written notice of
      such failure is delivered to Franchisee;                                                                                                                                                                                                                                                                                                                
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|     |  | (j)                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | fails to make a timely
      payment of any amount due to a supplier unaffiliated with Franchisor
      (other than payments which are subject to bona fide dispute), and does not
      correct such failure within thirty (30) days after Franchisor delivers to
      Franchisee notice of such failure to comply;                                                                                                                                                                                                                                                                                                                                                                                
|    
|     |  | (k)                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | fails to comply with
      any other provision of this Agreement or any other mandatory
      specification, standard or operating procedure or other obligation
      prescribed in the System Standards Manuals and does not correct such
      failure within thirty (30) days after notice of such failure to comply is
      delivered to Franchisee; or                                                                                                                                                                                                                                                                                                                                        
|    
|     |  | (l)                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | fails on three (3) or
      more separate occasions within any period of twelve (12) consecutive
      months to submit when due reports or other data, information or supporting
      records or to pay when due Royalties, Brand Fund contributions or other
      payments due Franchisor, any of its Affiliates or any unaffiliated
      suppliers or otherwise fails to comply with this Agreement or any
      mandatory specification, standard or operating procedure or other
      obligation prescribed in the System Standards Manuals, whether or not such
      failure is corrected after notice is delivered to Franchisee.                                                        
|    
|     |  | Franchisor
      has no obligation whatsoever to refund any portion of the Initial
      Franchise Fee upon any termination.                                                                                                                                                                                                                                                                                                       
|    
|26.3 |  | Franchisor
      has the option, but not the obligation, to cure any of Franchisees
      default under Section 26.2. If Franchisor chooses to exercise such
      option, then within five (5) days of the date Franchisor sends Franchisee
      notice of Franchisors expenses incurred in curing Franchisees default,
      Franchisee shall reimburse Franchisor for all such expenses.                                    
|    
|27.  |  | EFFECT OF
      TERMINATION OR EXPIRATION                                                                                                                                                                                                                                                                                                                                                                                          
|    
|27.1 |  | Within ten
      (10) days after the effective date of termination or expiration (without
      renewal) of this Agreement, Franchisee must pay Franchisor and its
      Affiliates all Royalties, Brand Fund contributions, amounts owed for
      purchases from Franchisor or its Affiliates, interest due on any of the
      foregoing and all other amounts owed to Franchisor or its Affiliates which
      are then unpaid.
|    
|27.2 |  | Upon the
      termination or expiration (without renewal) of this Agreement, Franchisee
      will:                                                                                                                                                                                                                                                                                                                               
|    
|     |  | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | not directly or
      indirectly at any time or in any manner use any Mark, any colorable
      imitation of any Mark or any other indicia of a Krispy Kreme Store or
      Commissary Facility;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    
|     |  | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | take such action as
      may be required to cancel all fictitious or assumed name registrations
      relating to Franchisees use of any Mark;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    
|     |  | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | notify the telephone
      company and all telephone directory publishers of the termination or
      expiration of Franchisees right to use any telephone number and any
      regular, classified or other telephone directory listings associated with
      any Mark and to authorize transfer of the number to Franchisor or at its
      direction;                                                                                                                                                                                                                                                                                                                                           
|    
|     |  | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | if Franchisor does not
      exercise its option to purchase the STORE pursuant to Section 27.5,
      promptly remove from the Site, and discontinue using for any purpose, all
      signs, fixtures, furniture, decor items, advertising materials, forms and
      other materials and supplies which display any of the Marks or any
      distinctive features, images, or designs associated with Krispy Kreme
      Stores or Commissary Facilities and, at Franchisees expense, make such
      alterations as may be necessary to distinguish the Site so clearly from
      its former appearance as a Krispy Kreme Store as to prevent any
      possibility of confusion by the public;

27

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|     |  | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | immediately cease to
      use all Confidential Information and return to Franchisor all copies of
      the System Standards Manuals and any other confidential materials which
      have been loaned to Franchisee;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|     |  | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | immediately
      discontinue any mode of communications on the Internet directly or
      indirectly relating to the STORE, including any websites or web pages, and
      immediately take all steps required by Franchisor to transfer to
      Franchisor any domain name associated with the STORE (such as executing a
      registrant name change agreement with the applicable registrar).
      Franchisee irrevocably appoints an authorized officer of Franchisor as
      Franchisees duly authorized agent and attorney-in-fact to execute all
      instruments and take all steps to transfer such domain names;                                                                                                                          
|    
|     |  | (g)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | immediately
      discontinue the use of any proprietary software; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    
|     |  | (h)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | within thirty (30)
      days after the effective date of termination or expiration, furnish
      evidence satisfactory to Franchisor of Franchisees compliance with the
      foregoing obligations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    
|27.3 |  | Upon
      termination or expiration (without renewal) of this Agreement, neither
      Franchisee nor any Restricted Person will, for a period of two (2) years
      commencing on the effective date of such termination or expiration or the
      date on which Franchisee ceases to conduct its activities under this
      Agreement, whichever is later:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    
|     |  | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | have any Ownership
      Interest in a Competitive Business located within a radius of ten (10)
      miles of the Site or of any other Krispy Kreme Store or Commissary
      Facility open or under construction on the effective date of termination
      or expiration;                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    
|     |  | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | perform services as a
      director, officer, manager, partner, or supervisory or management-level
      employee, of any Competitive Business located within a radius of ten (10)
      miles of the Site or of any other Krispy Kreme Store or Commissary
      Facility then open or under construction;                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    
|     |  | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | perform services as an
      employee, consultant, representative, agent or otherwise for a Competitive
      Business located within a radius of ten (10) miles of the Site or of any
      other Krispy Kreme Store or Commissary Facility then open or under
      construction, where such services (i) are substantially similar to those
      provided to Franchisee; or (ii) create a relationship between Franchisee
      or the Restricted Person and such Competitive Business in which Franchisee
      or the Restricted Person could be reasonably expected to benefit, either
      directly or indirectly, whether financially or otherwise, from the
      disclosure of any Confidential Information to such Competitive
      Business;
|    
|     |  | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | recruit or hire any
      Person who is Franchisors employee or the employee of any Krispy Kreme
      Store or Commissary Facility, or who has been Franchisors employee or the
      employee of any Krispy Kreme Store or Commissary Facility within the past
      six (6) months without obtaining prior written permission from Franchisor
      and that Persons employer. If Franchisor permits Franchisee to hire any
      such Person, then Franchisee agrees to pay Franchisor a non-refundable
      Management Development Fee in the amount of Twenty-Five Thousand Dollars
      ($25,000) per hired employee as of the date of hire; or                                                                                                
|    
|     |  | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | induce or attempt to
      induce any Person who is Franchisors employee or the employee of any
      Krispy Kreme Store or Commissary Facility to discontinue working for
      Franchisor or such Krispy Kreme Store or Commissary Facility as the case
      may be.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    
|     |  | Franchisee
      and each of its Owners expressly acknowledges the possession of skills and
      abilities of a general nature and other opportunities for exploiting such
      skills in other ways, so that enforcement of the covenants contained in
      Section 27.3 will not deprive any of them their personal goodwill
      or ability to earn a living. If Franchisee or any of its Owners fails or
      refuses to abide by any of the foregoing covenants and Franchisor obtains
      enforcement in a judicial or arbitration proceeding, the obligations under
      the breached covenant will be tolled during the period(s) of time that the
      covenant is breached and/or Franchisor seeks to enforce it and will
      continue in effect for a period of time ending two (2) years after the
      date of the order enforcing the covenant.

28

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|27.4 |  | Upon termination or
      expiration (without renewal) of this Agreement, Franchisor shall have the
      right, exercisable by giving notice thereof within thirty (30) days after
      the date of such termination or expiration, to purchase (and, if
      necessary, take possession of and remove from the Site) any and all
      equipment used or useable at the STORE (including all equipment that
      contains or embodies patents owned by Franchisor or any of its Affiliates)
      at its net book value, determined in accordance with generally accepted
      accounting principles, consistently applied. This right is separate and
      apart from Franchisors rights under Section 27.5.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|27.5 |  | Upon termination or
      expiration (without renewal) of this Agreement, Franchisor shall have the
      right, exercisable by giving notice thereof (Appraisal Notice) within
      thirty (30) days after the date of such termination or expiration, to
      require that a determination be made of the Fair Market Value (as
      defined below) of any or all of the assets of the STORE which Franchisee
      owns, including inventory of non-perishable products, materials, supplies,
      furniture, equipment, signs, and any and all leasehold improvements,
      fixtures, building and land, but excluding any cash and short-term
      investments and any items not meeting Franchisors specifications for
      Krispy Kreme Stores (the Purchased Assets). Notwithstanding the
      foregoing, if Franchisee notifies Franchisor not less than one hundred
      eighty (180) days nor more than two hundred seventy (270) days prior to
      the expiration of this Agreement that Franchisee does not desire to enter
      into a successor franchise agreement on expiration, then Franchisor
      agrees, if Franchisor desires to exercise its right to purchase, to give
      Franchisee the Appraisal Notice at least one hundred twenty (120) days
      prior to the date of expiration of this Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    
|27.6 |  | Upon delivery of the
      Appraisal Notice, Franchisee may not sell or remove any of the assets of
      the STORE from the Premises (other than in the ordinary course of
      business) and must give Franchisor, its designated agents and the
      Appraisers (as defined below) full access to the STORE and all of
      Franchisees books and records at any times during customary business
      hours in order to conduct inventories and determine the purchase price for
      the Purchased Assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    
|27.7 |  | The Fair Market Value
      shall be defined as the amount at which an arms length purchaser would be
      willing to pay for the Purchased Assets, assuming that the Purchased
      Assets would be used for the operation of a Krispy Kreme Store under a
      valid franchise agreement reflecting the then-current (or if Franchisor is
      not offering franchises at that time, then the most recent) standard terms
      upon which Franchisor offers franchises for Krispy Kreme Stores. Under no
      circumstances will any value be attributed to any goodwill associated with
      the Marks or any value attributed to the System (all of which Franchisee
      acknowledges to be owned by Franchisor and its Affiliates). In the first
      instance, Fair Market Value shall be determined by consultation between
      Franchisor and Franchisee. If Franchisee and Franchisor are unable to
      agree on the Fair Market Value of the Purchased Assets within fifteen (15)
      days after the Appraisal Notice, then Fair Market Value will be determined
      by calculating the mean average of three (3) separate appraisals done by
      three (3) independent appraisers (Appraisers). Franchisor and Franchisee
      shall each designate one (1) Appraiser within thirty (30) days of the
      Appraisal Notice and the two (2) Appraisers so designated will select a
      third (3rd) Appraiser within ten (10) days thereafter. If the two
      designated Appraisers are unable to select a third (3rd) Appraiser within
      such ten (10) days, then the third (3rd) Appraiser shall be selected, on
      demand of either party, by the director of the Regional Office of the
      American Arbitration Association located nearest to Winston-Salem, North
      Carolina.
|    
|27.8 |  | Each Appraiser will
      make his or her determination and submit a written report (Appraisal
      Report) to Franchisee and Franchisor as soon as practicable, but in no
      event more than thirty (30) days after his or her appointment. Each party
      may submit in writing to the Appraisers its judgment of Fair Market Value
      (together with its reasons therefor and with copies to each other);
      however, the Appraisers shall not be limited to these submissions and may
      make such independent investigations as they reasonably determine to be
      necessary. The Appraisers fees and costs shall be borne equally by the
      parties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    
|27.9 |  | Franchisor has the
      option, exercisable by delivering notice thereof within thirty (30) days
      after submission of the last Appraisal Report (or the date that an
      agreement is reached, if the parties agree to the Fair Market Value), to
      agree to purchase the Purchased Assets at the Fair Market Value, as so
      determined. Franchisor shall have the unrestricted right to assign this
      option to purchase separate and apart from the remainder of this
      Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

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|27.10 |  | If Franchisor
      exercises its option to purchase, the purchase price for the Purchased
      Assets will be paid in cash at the closing, which will occur at the place,
      time and date Franchisor designates, but not later than sixty (60) days
      after the exercise of Franchisors option to purchase the Purchased
      Assets. At the closing, Franchisor will be entitled to all
      representations, warranties, covenants, title insurance policies and other
      closing documents and post-closing indemnifications and hold-backs as
      Franchisor reasonably requires, including: (a) instruments transferring
      good and marketable title to the Purchased Assets, free and clear of all
      liens, encumbrances, and liabilities, to Franchisor or its designee, with
      all sales and other transfer taxes paid by Franchisee; (b) an assignment
      of all leases of assets used in the operation of the STORE, including
      land, building and/or equipment (or if an assignment is prohibited, a
      sublease to Franchisor or its designee for the full remaining term and on
      the same terms and conditions as Franchisees lease, including renewal
      and/or purchase options), provided, however, that if any of Franchisees
      Owners or Affiliates directly or indirectly owns the land, building and/or
      equipment of the STORE, Franchisee will, at Franchisors option, cause
      such Owner or Affiliate to grant to Franchisor a lease at reasonable and
      customary rental rates and other terms prevailing in the community where
      the STORE is located; and (c) a general release by Franchisee and its
      Owners and Affiliates in form and substance satisfactory to
      Franchisor.
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     
|27.11 |  | If Franchisee cannot
      deliver clear title to all of the Purchased Assets, or if there are other
      unresolved issues, the closing of the sale may, at Franchisors option, be
      accomplished through an escrow on such terms and conditions as Franchisor
      deems appropriate, including the making of payments, to be deducted from
      the purchase price, directly to third parties in order to obtain clear
      title to all of the Purchased Assets. Further, Franchisee and Franchisor
      shall comply with any applicable Bulk Sales provisions of the Uniform
      Commercial Code as enacted in the state where the STORE is located and all
      applicable state and local sales and income tax notification and/or escrow
      procedures. Franchisor has the right to set off against and reduce the
      purchase price by any and all amounts owed by Franchisee or any of its
      Owners or Affiliates to Franchisor or any of its Affiliates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     
|27.12 |  | Upon delivery of the
      Appraisal Notice and pending (a) determination of Fair Market Value, (b)
      Franchisors option period, and (c) the closing of the purchase,
      Franchisor may authorize continued temporary operations of the STORE
      pursuant to the terms of this Agreement, subject to the supervision and
      control of one or more of Franchisors appointed managers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     
|27.13 |  | Franchisors exercise
      of any of its rights under Section 27 will be in addition to and
      not in limitation of any other rights and remedies it may have in the
      event of any breach or default by Franchisee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     
|27.14 |  | All the obligations of
      Franchisee and its Owners and Affiliates under this Agreement, which
      expressly or by their nature survive or are intended to survive the
      termination or expiration of this Agreement, will continue in full force
      and effect subsequent to and notwithstanding the termination or expiration
      until they are satisfied in full or by their nature expire.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     
|28.   |  | RELATIONSHIP OF
      PARTIES/INDEMNIFICATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     
|28.1  |  | Neither this Agreement
      nor the dealings of the parties pursuant to this Agreement shall create
      any fiduciary relationship or any other relationship of trust or
      confidence between the parties hereto. Franchisor and Franchisee, as
      between themselves, are and shall be independent contractors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     
|28.2  |  | Franchisee understands
      and agrees that Franchisor may operate and change the System and its
      business in any manner that is not expressly and specifically prohibited
      by this Agreement. Whenever Franchisor has expressly reserved in this
      Agreement or is deemed to have a right and/or discretion to take or
      withhold an action, or to grant or decline to grant Franchisee a right to
      take or withhold an action, except as otherwise expressly and specifically
      provided in this Agreement, Franchisor may make its decision or exercise
      its right and/or discretion on the basis of its judgment of what is in its
      best interests, including its judgment of what is in the best interests of
      its franchise network, at the time its decision is made or its right or
      discretion is exercised, without regard to whether: (a) other reasonable
      alternative decisions or actions could have been made by Franchisor; (b)
      Franchisors decision or action promotes its financial or other individual
      interest; (c) Franchisors decision or action applies differently to
      Franchisee and one or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

30

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|     |  | more other franchisees
      or its company-owed operations; or (d) Franchisors decision or the
      exercise of its right or discretion is adverse to Franchisees interests.
      In the absence of an applicable statute, Franchisor will have no liability
      to Franchisee for any such decision or action. The parties intend that the
      exercise of Franchisors right or discretion will not be subject to
      limitation or review. If applicable law implies a covenant of good faith
      and fair dealing in this Agreement, the parties agree that such covenant
      shall not imply any rights or obligations that are inconsistent with a
      fair construction of the terms of this Agreement and that this Agreement
      grants Franchisor the right to make decisions, take actions and/or refrain
      from taking actions not inconsistent with Franchisees rights and
      obligations hereunder.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|     |  | Nothing contained in
      this Agreement, nor arising from the conduct of the parties hereunder, is
      intended to make either party a general or special agent, joint venturer,
      partner or employee of the other for any purpose whatsoever. Franchisee
      must conspicuously identify itself in all dealings with customers,
      lessors, contractors, suppliers, public officials, employees and others as
      the owner of the rights granted hereunder and must place such other
      notices of independent ownership on such forms, business cards,
      stationery, advertising and other materials as we may require from time to
      time. Franchisee is solely responsible for all employment decisions with
      respect to its personnel, including hiring, firing, compensation,
      training, supervision and discipline, and regardless whether Franchisee
      receives advise from Franchisor on any of these subjects.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    
|28.3 |  | Franchisee may not
      make any express or implied agreements, warranties, guarantees or
      representations or incur any debt in Franchisors name or on its behalf or
      represent that the relationship of the parties hereto is anything other
      than that of independent contractors. Franchisor will not be obligated by
      or have any liability under any agreements made by Franchisee with any
      third party or for any representations made by Franchisee to any third
      party. Franchisor will not be obligated for any damages to any person or
      property arising directly or indirectly out of the operation of
      Franchisees business hereunder.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    
|28.4 |  | Franchisor will have
      no liability for any sales, use, service, occupation, excise, gross
      receipts, income, property or other taxes, whether levied upon Franchisee
      or the STORE, in connection with the business Franchisee conducts (except
      for taxes Franchisor is required by law to collect from Franchisee with
      respect to purchases from Franchisor). Payment of all such taxes is
      Franchisees responsibility.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    
|28.5 |  | Franchisor agrees to
      indemnify Franchisee against, and to reimburse Franchisee for, all damages
      for which Franchisee is held liable as a result of a claim that
      Franchisees authorized use of any Mark or of any of Franchisors other
      intellectual property rights pursuant to and in full compliance with this
      Agreement infringes on the rights of another person and, except as
      provided herein, for all costs Franchisee reasonably incurs in defending
      any such claim brought against Franchisee, provided that Franchisee has
      timely notified Franchisor of such claim and provided further that
      Franchisee and Franchisees Principal Owners and Affiliates are in full
      compliance with this Agreement and with all other agreements entered into
      with Franchisor or any of its Affiliates. HDN Development Corporation or
      its agent or assignee, at its sole discretion, is entitled to prosecute,
      defend and/or settle any such proceeding arising out of Franchisees use
      of any Mark or other intellectual property right pursuant to this
      Agreement and, if HDN Development Corporation or its agent or assignee
      undertakes to prosecute, defend and/or settle any such matter, Franchisor,
      HDN Development Corporation or its agent or assignee, has no obligation to
      indemnify or reimburse Franchisee for any fees or disbursements of any
      legal counsel retained by Franchisee.
|    
|28.6 |  | Franchisee agrees to
      indemnify Franchisor, its Affiliates and their respective directors,
      officers, employees, shareholders, members, managers, agents, successors
      and assigns (collectively Indemnified Parties), and to hold the
      Indemnified Parties harmless to the fullest extent permitted by law, from
      any and all losses and expenses (as defined below) incurred in connection
      with any litigation or other form of adjudicatory procedure, claim,
      demand, investigation, or formal or informal inquiry (regardless of
      whether it is reduced to judgment) or any settlement thereof which arises
      directly or indirectly from, or as a result of, a claim of a third party
      against any one or more of the Indemnified Parties, including those in
      connection with (a) Franchisees failure to perform or breach of any
      covenant, agreement, term or provision of this Agreement, (b) Franchisees
      breach of any representation or warranty contained in this Agreement, (c)
      Franchisees marketing, promotion, advertisement or sale of any of the
      products and services offered by the STORE,                                                                                                                                                                                                                                                                                                                  

31

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|     |  | including unfair or
      fraudulent advertising claims (whether in print advertising, electronic
      media or otherwise), and product liability claims, (d) Franchisees
      development, ownership, operation and/or closing of the STORE, (e)
      Franchisees failure to pay any amounts owed to a supplier, (f) claims by
      Franchisees employees (including workers or unemployment compensation),
      (g) personal injury claims, (h) Franchisees failure to comply with any
      law, and (i) any allegedly unauthorized service or act, rendered or
      performed in connection with this Agreement, (collectively Event)
      and regardless of whether it resulted from any strict or vicarious
      liability imposed by law on the Indemnified Parties. The foregoing
      indemnity shall apply even if it is determined that the Indemnified
      Parties negligence caused such loss, liability or expense, in whole or in
      part, provided, however, that this indemnity will not apply to any
      liability arising from a breach of this Agreement by Franchisor or with
      respect to any Indemnified Party whose gross negligence or willful acts
      caused such liability (except to the extent that joint liability is
      involved, in which event the indemnification provided herein will extend
      to any finding of comparative or contributory negligence attributable to
      Franchisee). The term losses and expenses includes compensatory,
      exemplary, and punitive damages; fines and penalties; attorneys fees;
      experts fees; court costs; costs associated with investigating and
      defending against claims; settlement amounts; judgments; compensation for
      damages to our reputation and goodwill; and all other costs associated
      with any of the foregoing losses and expenses. Franchisor agrees to give
      Franchisee reasonable notice of any event of which Franchisor becomes
      aware for which indemnification may be required, and Franchisor may elect
      (but is not obligated) to direct the defense thereof, provided that the
      selection of counsel shall be subject to Franchisees consent, which
      consent shall not be unreasonably withheld or delayed. Franchisor may, in
      its reasonable discretion, take such actions as Franchisor deems necessary
      and appropriate to investigate, defend, or settle any event or take other
      remedial or corrective actions with respect thereto as may be necessary
      for the protection of the Indemnified Parties or Krispy Kreme Stores
      generally, provided however, that any settlement (to the extent payment is
      made by Franchisee) shall be subject to Franchisees consent, which
      consent shall not be unreasonably withheld or delayed. Further,
      notwithstanding the foregoing, if the insurer on a policy or policies
      obtained in compliance with this Agreement agrees to undertake the defense
      of an Event (an Insured Event), Franchisor agrees not to exercise its
      right to select counsel to defend the Event if such would cause
      Franchisees insurer to deny coverage. Franchisor reserves the right to
      retain counsel to represent Franchisor with respect to an Insured Event at
      Franchisors sole cost and expense.
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|28.7 |  | In furtherance of the
      indemnity contained in Section 28.6, during the Term, Franchisee
      agrees to maintain commercial general liability insurance, product
      liability coverage, automobile liability insurance, workers compensation
      insurance, employers liability insurance and any other insurance policies
      as Franchisor may require from time to time, insuring Franchisee and the
      Indemnified Parties against the matters described in Section 28.6,
      including claims for bodily and personal injury, death and property
      damage, among other things, caused by or occurring in conjunction with the
      conduct of business by Franchisee pursuant to this Agreement, under one or
      more policies of insurance acceptable to Franchisor and containing minimum
      liability coverage Franchisor prescribes from time to time. Each such
      insurance policy will name Franchisor as an additional insured and will
      provide for thirty (30) days prior written notice to Franchisor of any
      material modification, cancellation, or expiration of such policy. Each
      such insurance policy will give Franchisor notice of default under the
      policy and the opportunity to cure such default on Franchisees behalf.
      Simultaneous with the execution of this Agreement, Franchisee will provide
      Franchisor with evidence of such insurance; thereafter, Franchisee will
      furnish to Franchisor annually and upon the replacement or material
      modification of any insurance policy providing the coverage required under
      this Agreement, a copy of the certificate of insurance or other evidence
      requested by Franchisor that such insurance coverage is continuously in
      force without interruption. The maintenance of sufficient insurance
      coverage (both as to the type and limits of coverage) for the STORE is
      Franchisees sole responsibility.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    
|28.8 |  | The terms of
      Section 28 will survive the termination or expiration of this
      Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    
|29.  |  | MISCELLANEOUS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    
|29.1 |  | This Agreement and all
      issues arising from or relating to this Agreement shall be governed by and
      construed under the laws of the State of North Carolina, provided the
      foregoing shall not constitute a waiver of Franchisees rights under any
      applicable franchise law of another state. Otherwise, in the
    event                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

32

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|     |  | of any conflict of
      law, North Carolina law will prevail, without regard to the application of
      North Carolina conflict of law principles, except that any North Carolina
      law regulating the sale of franchises or business opportunities or
      governing the relationship of a franchisor and its franchisees will not
      apply unless its jurisdictional requirements are met independently without
      reference to this section.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|29.2 |  | Franchisee and each of
      its Owners agree that the U.S. District Court for the Middle District of
      North Carolina, or if such court lacks jurisdiction, the Superior Court
      (or its successor) for Forsyth County North Carolina, shall be the venue
      and exclusive forum in which to adjudicate any case or controversy arising
      from or relating to this Agreement, or any Development Agreement,
      Commissary Facility Agreement or any other Franchise Agreement, including
      any guarantees or covenants by Franchisees Owners. In the event a case or
      controversy is to be heard by the Superior Court (or its successor) for
      Forsyth County North Carolina, any party may request that the matter be
      assigned to the North Carolina Business Court. Franchisee and each of its
      Owners irrevocably submit to the jurisdiction of such courts and waive any
      objections to either the jurisdiction of or venue in such courts.
      Franchisee and each of its Owners irrevocably waive, to the fullest extent
      they may lawfully do so, the defense of an inconvenient forum to the
      maintenance of such suit, action or proceeding and agree that service of
      process for purposes of any such suit, action or proceeding need not be
      personally served or served within the State of North Carolina but may be
      served with the same effect as if they were served within the State of
      North Carolina, by certified mail or any other means permitted by law,
      addressed to Franchisee and its Owners (as applicable) at the address set
      forth herein. Nothing contained herein shall affect Franchisors rights to
      bring a suit, action or proceeding in any other appropriate jurisdiction,
      including any suit, action or proceeding brought by Franchisor to enforce
      any judgment against Franchisee or any of its Owners entered by a State or
      Federal Court.
|    
|29.3 |  | Franchisor may obtain
      at any time in any court of competent jurisdiction any injunctive relief,
      including temporary restraining orders and preliminary injunctions,
      against conduct or threatened conduct for which no adequate remedy at law
      may be available or which may cause Franchisor irreparable harm.
      Franchisor may have such injunctive relief, without bond, but upon due
      notice, in addition to such further and other relief as may be available
      at equity or in law, and Franchisees sole remedy in the event of the
      entry of such injunction, shall be the dissolution of such injunction, if
      warranted, upon hearing duly had (all claims for damages by reason of the
      wrongful issuance of any such injunction being expressly waived hereby).
      Franchisee and each of its Owners acknowledges that any violation of
      Sections 16, 17.3, 18, 19, 20,
      24.3(j) or 27.3 would result in irreparable injury to
      Franchisor for which no adequate remedy at law may be available.
      Accordingly, Franchisee and each of its Owners consent to the issuance of
      an injunction at Franchisors request (without posting a bond or other
      security) prohibiting any conduct in violation of any of those sections
      and agree that the existence of any claims Franchisee or any of its Owners
      may have against Franchisor, whether or not arising herefrom, shall not
      constitute a defense to the enforcement of any of those
  Sections.                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    
|29.4 |  | If Franchisor claims
      in any judicial proceeding that Franchisee owes Franchisor or any of its
      Affiliates money or that Franchisee has otherwise breached this Agreement
      and Franchisor prevails on such claims, then Franchisor shall be awarded
      its costs and expenses incurred in connection with such proceedings,
      including reasonable attorneys fees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    
|29.5 |  | Except with respect to
      any of Franchisees obligations herein regarding the Confidential
      Information, the Marks, and any other intellectual property rights of
      Franchisor, Franchisor and Franchisee (and its Owners) each waives, to the
      fullest extent permitted by law, any right to or claim for any punitive or
      exemplary damages against the other. Franchisee and each of its Owners
      waives, to the fullest extent permitted by applicable law, the right to
      recover consequential damages for any claim directly or indirectly arising
      from or relating to this Agreement.FURTHERMORE, THE PARTIES AGREE THAT ANY LEGAL ACTION IN CONNECTION
      WITH THIS AGREEMENT SHALL BE TRIED TO THE COURT SITTING WITHOUT A JURY,
      AND ALL PARTIES WAIVE ANY RIGHT TO HAVE ANY ACTION TRIED BY
      JURY.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

33

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|29.6  |  | Every part of this
      Agreement shall be considered severable. If for any reason any part of
      this Agreement is held to be invalid, that determination shall not impair
      the other parts of this Agreement. If any covenant herein which restricts
      competitive activity is deemed unenforceable by virtue of its scope in
      terms of geographical area, type of business activity prohibited and/or
      length of time, but could be rendered enforceable by reducing any part or
      all of it, Franchisee and Franchisor agree that it will be so modified as
      to remain enforceable to the fullest extent permissible under applicable
      law. If any applicable law requires a greater prior notice of the
      termination of or refusal to enter into a successor franchise than is
      required hereunder, a different standard of good cause, or the taking of
      some other action not required hereunder, the prior notice, good cause
      standard and/or other action required by such law shall be substituted for
      the comparable provisions hereof. If any provision of this Agreement or
      any specification, standard or operating procedure prescribed by
      Franchisor is invalid or unenforceable under applicable law, Franchisor
      has the right, in its sole discretion, to modify such invalid or
      unenforceable provision, specification, standard or operating procedure to
      the extent required to make it valid and enforceable.
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     
|29.7  |  | Franchisor and
      Franchisee may by written instrument signed by the waiving party
      unilaterally waive or reduce any obligation of the other under this
      Agreement. Any waiver granted by Franchisor shall be without prejudice to
      any other rights Franchisor may have, will be subject to continuing review
      by Franchisor and may be revoked, in its sole discretion, at any time and
      for any reason, effective upon delivery to Franchisee of 10 days prior
      notice. Franchisee and Franchisor shall not be deemed to have waived any
      right reserved by this Agreement by virtue of any custom or practice of
      the parties at variance with it; any failure, refusal or neglect by
      Franchisee or Franchisor to exercise any right under this Agreement or to
      insist upon exact compliance by the other with its obligations hereunder;
      any waiver, forbearance, delay, failure or omission by Franchisor to
      exercise any right, whether of the same, similar or different nature, with
      respect to other Krispy Kreme Stores; or the acceptance by Franchisor of
      any payments due from Franchisee after any breach of this
    Agreement.                                                                                                                                                                                                                                                                                                      
|     
|29.8  |  | The rights of
      Franchisor and Franchisee hereunder are cumulative and no exercise or
      enforcement by Franchisor or Franchisee of any right or remedy hereunder
      shall preclude the exercise or enforcement by Franchisor or Franchisee of
      any other right or remedy hereunder which Franchisor or Franchisee is
      entitled to enforce by law.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     
|29.9  |  | The language of this
      Agreement shall be construed according to its fair meaning and not more
      strictly against any one party than the other. The Basic Terms,
      introduction, personal guarantees and covenants, exhibits, schedules and
      riders (if any) to this Agreement are a part of this Agreement, which
      constitutes the entire agreement of the parties with respect to the
      subject matter hereof. Except as otherwise expressly provided herein,
      there are no other oral or written agreements, understandings,
      representations or statements relating to the subject matter of this
      Agreement, other than the Franchise Disclosure Document, that either party
      may or does rely on or that will have any force or effect. Nothing in this
      Agreement shall be deemed to confer any rights or remedies on any person
      or legal entity not a party hereto. This Agreement shall not be modified
      except by written agreement signed by both parties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     
|29.10 |  | The headings of
      sections are for convenience only and do not limit or construe their
      contents. The word including shall be construed to include the words
      without limitation. The term Franchisee is applicable to one or more
      persons, a corporation, limited liability company or a partnership and its
      owners, as the case may be. If two or more persons are at any time
      Franchisee hereunder, whether as partners, joint venturers or otherwise,
      their obligations and liabilities to Franchisor shall be joint and
      several.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     
|29.11 |  | References to a
      controlling interest in an entity shall mean more than fifty percent (50%)
      of the equity and voting control of such entity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     
|29.12 |  | This Agreement is
      binding on the parties hereto and their respective executors,
      administrators, heirs, assigns and successors in interest. This Agreement
      may be executed in multiple copies, each of which shall be deemed an
      original. Time is of the essence in this
Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

34

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|29.13 |  | Whenever
      this Agreement requires the approval or consent of either party, the other
      party shall make written request therefor, and such approval or consent
      shall be obtained in writing; provided however, unless specified otherwise
      in this Agreement, such party may withhold approval or consent for any
      reason or for no reason at all. Furthermore, unless specified otherwise in
      this Agreement, no such approval or consent shall be deemed to constitute
      a warranty or representation of any kind, express or implied, and the
      approving or consenting party shall have no responsibility, liability or
      obligation arising therefrom.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     
|29.14 |  | All notices,
      requests and reports permitted or required to be delivered by this
      Agreement shall be deemed delivered: (a) at the time delivered by hand to
      the recipient party (or to an officer, director or partner of the
      recipient party); (b) one (1) business day after being placed in the hands
      of a commercial courier service for guaranteed overnight delivery; or (c)
      five (5) business days after placement in the United States Mail by
      Registered or Certified Mail, Return Receipt Requested, postage prepaid
      and addressed to the party to be notified at its most current principal
      business address of which the notifying party has been notified in
      writing. All payments and reports required by this Agreement shall be sent
      to Franchisor at the address identified in this Agreement unless and until
      a different address has been designated by written notice. No restrictive
      endorsement on any check or in any letter or other communication
      accompanying any payment shall bind Franchisor, and its acceptance of any
      such payment shall not constitute an accord and satisfaction.
|     
|30.   |  | ACKNOWLEDGMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     
|30.1  |  | By
      initialing below, Franchisee hereby specifically acknowledges the
      following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     
|      |  | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     
|      |  | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     
|      |  | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     
|      |  | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     
|      |  | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

35

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| |  | (f) |  | No Guarantee or
      Assurance. Franchisee has not received
      from Franchisor or its representatives or relied on any statement,
      representation, guaranty or assurance, express or implied, as to the
      revenues, profits or success of the business venture contemplated by this
      Agreement, nor has Franchisee received from Franchisor or its
      representatives any information from which Franchisee may easily ascertain
      a specific level or range of actual or potential sales, income, gross or
      net profits from franchised or non-franchised Krispy Kreme Stores or
      Commissary Facilities.
| |  | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |    
| |  |     |  | Initials ________/________                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the Effective Date.

|KRISPY
      KREME DOUGHNUT CORPORATION | [FRANCHISEE]
|--------------------------------------- | ------------
|                                       
|                                       
|By:                                     |             
|Title:                                  |             
|Dated:                                  |             

36

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EXHIBIT A

TO THE FRANCHISE AGREEMENT BETWEEN
KRISPY KREME DOUGHNUT CORPORATIONAND

_______________________________DATED _______________,
________

FRANCHISEE INFORMATION

|1. |                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Form of
      Entity of Franchisee.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------
|  
|   | (a) Corporation or Limited
      Liability Company. Franchisee was organized on ___________, _________
      under the laws of the State of ______. Its Federal Identification Number
      is ________________. It has not conducted business under any name other
      than its corporate or company name. The following is a list of all of
      Franchisees directors and officers or managing members as of 
      _______________, _______.

| | Name of Each Director/Officer/Managing Member |  | Position(s) Held | 
| | --------------------------------------------- |  | ---------------- | 
| |                                               |  |                  | 
| |                                               |  |                  | 
| |                                               |  |                  | 
| |                                               |  |                  | 
| |                                               |  |                  | 

| | (b) Partnership. Franchisee
      is a [general] [limited] partnership formed on ___________, _________
      under the laws of the State of _______. Its Federal Identification Number
      is ______________________. It has not conducted business under any name
      other than its partnership name. The following is a list of all of
      Franchisee s general partners as of, ___________,
  _________.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Name of Each General Partner | 
| | ---------------------------- | 
| |                             
| |                             
| |                             

A-1

---

|2. |  | Owners. Franchisee and
      each of its Owners represents and warrants that the following is a
      complete and accurate list of all Owners of Franchisee, including the full
      name and mailing address of each Owner, and fully describes the nature and
      extent of each Owners interest in Franchisee. Franchisee and each Owner
      as to his/her ownership interest, represents and warrants that each Owner
      is the sole and exclusive legal and beneficial owner of his/her ownership
      interest in Franchisee, free and clear of all liens, restrictions,
      agreements and encumbrances of any kind or nature, other than those
      required or permitted by this Agreement.
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  

| | Owners Name and Mailing Address |  | Percentage and Nature of Ownership Interest
| | -------------------------------- |  | -------------------------------------------
| |                                  |  |                                            
| |                                  |  |                                            
| |                                  |  |                                            
| |                                  |  |                                            
| |                                  |  |                                            

Submitted by Franchisee andAccepted by Franchisor and made a part of the Franchise
Agreement as of_____, ___.

|KRISPY KREME DOUGHNUT CORPORATION, |  | (Name of corporation, limited liability
|---------------------------------- |  | ---------------------------------------
|a
      North Carolina corporation |  | company or partnership)                
|                                   |  |                                        
|                                   |  |                                        
|By:                                |  |                                        
|Print Name:                        |  |                                        
|Title:                             |  |                                        
|                                   |  |                                        
|                                   |  |                                        
|                                   |  | By:                                    
|                                   |  | Print Name:                            
|                                   |  | Title:                                 
|                                   |  |                                        
|                                   |  | Owners:                                
|                                   |  |                                        
|                                   |  |                                        
|                                   |  | (Signature)                            
|                                   |  |                                        
|                                   |  |                                        
|                                   |  | (Print Name)                           
|                                   |  |                                        
|                                   |  |                                        
|                                   |  | (Signature)                            
|                                   |  |                                        
|                                   |  |                                        
|                                   |  | (Print Name)                           

A-2

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EXHIBIT B

TO THE FRANCHISE AGREEMENT BETWEEN
KRISPY KREME DOUGHNUT CORPORATIONAND

________________________________DATED _______________,
________

PRINCIPAL OWNERS PERSONAL GUARANTY
OF FRANCHISEES OBLIGATIONS (Guaranty)

In
consideration of, and as an inducement to, the execution of the Krispy Kreme
Doughnut Corporation Franchise Agreement dated as of _______________, _________
(the Agreement) by and between KRISPY KREME DOUGHNUT CORPORATION
(Franchisor), and ____________ (Franchisee), each of the undersigned
Principal Owners of a ten percent (10%) or greater interest in Franchisee hereby
personally and unconditionally: (a) guarantees to Franchisor and its successors
and assigns, for the term of the Agreement and thereafter as provided in the
Agreement, that Franchisee shall punctually pay and perform each and every
undertaking, agreement and covenant set forth in the Agreement (and any
amendments) and that each and every representation of Franchisee made in
connection with the Agreement (and any amendments) are true, correct and
complete in all respects at and as of the time given; and (b) agrees personally
to be bound by each and every provision in the Agreement (and any
amendments).

Each of the
undersigned waives: (a) acceptance and notice of acceptance by Franchisor of the
foregoing undertakings; (b) notice of demand for payment of any indebtedness or
nonperformance of any obligations hereby guaranteed; (c) protest and notice of
default to any party with respect to the indebtedness or nonperformance of any
obligations hereby guaranteed; (d) any right that the undersigned may have to
require that an action be brought against Franchisee or any other person as a
condition of liability; (e) notice of any amendment to the Agreement; (f) any
and all other notices and legal or equitable defenses to which that the
undersigned may be entitled; and (g) the provisions of N.C. General Statutes §
26.7etseq.

Each of the
undersigned consents and agrees that: (a) the undersigneds direct and immediate
liability under this guaranty shall be joint and several; (b) the undersigned
shall render any payment or performance required under the Agreement upon demand
if Franchisee fails or refuses to do so punctually; (c) such liability shall not
be contingent or conditioned upon pursuit by Franchisor of any remedies against
Franchisee or any other person; and (d) such liability shall not be diminished,
relieved or otherwise affected by any extension of time, credit or other
indulgence which Franchisor may from time to time grant to Franchisee or to any
other person including the acceptance of any partial payment or performance or
the compromise or release of any claims, none of which shall in any way modify
or amend this guaranty, which shall be continuing and irrevocable until
satisfied in full.

Each of the
undersigned agrees that the U.S. District Court for the Middle District of North
Carolina, or if such court lacks jurisdiction, the Superior Court (or its
successor) for Forsyth County North Carolina, shall be the venue and exclusive
forum in which to adjudicate any case or controversy arising from or relating to
this Guaranty. In the event a case or controversy is to be heard by the Superior
Court (or its successor) for Forsyth County North Carolina, any party may
request that the matter be assigned to the North Carolina Business Court. Each
of the undersigned irrevocably submits to the jurisdiction of such courts and
waives any objections to either the jurisdiction of or venue in such courts.
Each of the undersigned irrevocably waives, to the fullest extent he/she may
lawfully do so, the defense of an inconvenient forum to the maintenance of such
suit, action or proceeding and agrees that service of process for purposes of
any such suit, action or proceeding need not be personally served or served
within the State of North Carolina but may be served with the same effect as if
the undersigned were served within the State of North Carolina, by certified
mail or any other means permitted by law addressed to the undersigned at the
address set forth herein. Nothing contained herein shall affect Franchisors
rights to bring a suit, action or proceeding in any other appropriate
jurisdiction, including any suit, action or proceeding brought by Franchisor to
enforce any judgment against the undersigned entered by a State or Federal
Court.

B-1

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Each of the
undersigned waives all rights to payments and claims for reimbursement or
subrogation which any of the undersigned may have against Franchisee arising as
a result of the undersigneds execution of and performance under this
Guaranty.

IN
WITNESS WHEREOF, each of the undersigned has
hereunto affixed his/her signature as of the _____day of ________,
_____.

|PERCENTAGE
      OF OWNERSHIP             | GUARANTOR(S)
|----------------------------------------- | ------------
|INTERESTS
      IN FRANCHISEE             |             
|                                          |             
|                                          |             
|                                          |             
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|                                          |             
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|                                          |             
|                                          |             
|                                          |             
|                                          |             
|                                          |             
|Subscribed
      and sworn to before me   |             
|this _____ day of
      _________, _____. |             
|                                          |             
|Notary
      Public                       |             
|My Commission
      expires:________      |             

B-2

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EXHIBIT C

TO THE FRANCHISE AGREEMENT BETWEEN
KRISPY KREME DOUGHNUT CORPORATIONAND

______________________________DATED ______________,
________

INVESTOR PERSONAL COVENANTS
REGARDINGCONFIDENTIALITY,
NON-COMPETITION AND NON-SOLICITATION

In
conjunction with your investment in __________ (Franchisee) a ______________,
the undersigned _________________ (Owner), acknowledges and agrees as
follows:

1. Franchisee owns and operates a Krispy
Kreme Store pursuant to a franchise agreement dated____________________, _________ (Franchise Agreement) with Krispy Kreme
Doughnut Corporation (Franchisor), which Franchise Agreement requires persons
with legal or beneficial ownership interests in Franchisee to be personally
bound by the confidentiality and noncompetition covenants contained in the
Franchise Agreement. All capitalized terms contained herein shall have the same
meaning set forth in the Franchise Agreement.

2. Owner owns or intends to own a
__________________ percent (__ %) legal or beneficial ownership interest in
Franchisee and acknowledges and agrees that the execution of this Agreement is a
condition to Franchisees ability to enter into the Franchise Agreement and/or
Owners ability to invest in Franchisee. Owner has received good and valuable
consideration for executing this Agreement. Franchisor may enforce this
Agreement directly against Owner.

3. Owner may gain access to information
comprising Franchisors Confidential Information as a result of investing in
Franchisee. The Confidential Information is proprietary and includes
Franchisors trade secrets. Owner hereby agrees that while Owner has a legal or
beneficial ownership interest in Franchisee and thereafter, Owner: (a) will not
use the Confidential Information in any other business or capacity; (b) will
maintain the confidentiality of the Confidential Information; and (c) will not
make unauthorized copies of any portion of the Confidential Information, whether
through electronic media, writings, or other tangible or intangible means of
expression. Without limiting the foregoing, Owner (i) acknowledges that he/she
may have access to Franchisors material non-public information and that of its
parent, Krispy Kreme Doughnut Inc. (KKDI), and that the securities laws
prohibit trading in KKDI securities while in possession of such information, and
(ii) agrees to refrain from trading in KKDI securities in violation of such
laws. If Owner ceases to have an interest in Franchisee, Owner must deliver to
Franchisor any such Confidential Information in his/her possession or
control.

4. Notwithstanding anything to the
contrary contained herein and provided Owner has obtained Franchisors prior
written consent, the restrictions on Owners disclosure and use of the
Confidential Information will not apply to the following:

| | (a) |  | information, methods,
      procedures, techniques and knowledge which are or become generally known
      in the food service business, other than through disclosure (whether
      deliberate or inadvertent) by Franchisee, Franchisees Owners, agents, or
      employees; and                                                                                                                                                                                                                                                                          
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    
| | (b) |  | the disclosure of the
      Confidential Information in judicial, arbitration or administrative
      proceedings to the extent that Owner is legally compelled to disclose such
      information, provided Owner has notified Franchisor prior to such
      disclosure and has used its best efforts to obtain, and has afforded
      Franchisor sufficient opportunity to seek an appropriate protective order
      and obtain, assurances satisfactory to Franchisor of confidential
      treatment for the information required to be so
  disclosed.

C-1

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5. Owner acknowledges and agrees that
Franchisor would be unable to (a) protect the Confidential Information against
unauthorized use or disclosure; (b) preserve the prestige, integrity, and
goodwill of the Products, Marks, and System; or (c) encourage the free exchange
of ideas and information among Krispy Kreme Stores and Commissary Facilities if
franchisees and owners of Krispy Kreme Stores and Commissary Facilities or their
owners were permitted to engage in or benefit from certain competitive
activities. Therefore, except as expressly authorized by another written
agreement with Franchisor, Owner agrees that during the term of the Franchise
Agreement or during such time as Owner has an Ownership Interest in Franchisee
(whichever is shorter), without Franchisors prior written consent, Owner shall
not directly or indirectly (including through a Restricted Person):

| | (i)   |  | have any Ownership
      Interest in a Competitive Business;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      
| | (ii)  |  | perform services as a
      director, officer, manager, partner, or supervisory or management-level
      employee, of any Competitive Business;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |      
| | (iii) |  | perform services as an
      employee, consultant, representative, agent or otherwise for a Competitive
      Business, where such services could be reasonably expected to benefit,
      either directly or indirectly, whether financially or otherwise, from the
      disclosure of any Confidential Information to such Competitive
      Business;                                                                                                                                                                                                                                                                                        
| |      
| | (iv)  |  | recruit or hire any
      Person who is Franchisors employee or the employee of any Krispy Kreme
      Store or Commissary Facility, or who has been Franchisors employee or the
      employee of any Krispy Kreme Store or Commissary Facility within the past
      six (6) months without obtaining prior written permission from Franchisor
      and that Persons employer. If Franchisor permits Owner to hire any such
      Person, then Owner agrees to pay Franchisor a non-refundable Management
      Development Fee in the amount of Twenty-Five Thousand Dollars ($25,000)
      per hired employee as of the date of hire; or
| |      
| | (v)   |  | induce or attempt to
      induce any Person who is Franchisors employee or the employee of any
      Krispy Kreme Store or Commissary Facility to discontinue working for
      Franchisor or such Krispy Kreme Store or Commissary Facility as the case
      may be.                                                                                                                                                                                                                                                                                                                                                                         

6. Upon termination of the Franchise
Agreement or Owners Ownership Interest in Franchisee (whichever first occurs),
Owner shall not directly or indirectly (including through a Restricted Person),
for a period of two (2) years commencing on the effective date of such
termination:

| | (a) |  | have any Ownership
      Interest in a Competitive Business located within a radius of ten (10)
      miles of the Site or of any other Krispy Kreme Store or Commissary
      Facility then open or under construction;                                                                                                                                                                                                                                                                                                                                                                                                                        
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    
| | (b) |  | perform services as a
      director, officer, manager, partner, or supervisory or management-level
      employee, of any Competitive Business located within a radius of ten (10)
      miles of the Site or of any other Krispy Kreme Store or Commissary
      Facility then open or under construction;                                                                                                                                                                                                                                                                                                                                    
| |    
| | (c) |  | perform services as an
      employee, consultant, representative, agent or otherwise for a Competitive
      Business located within a radius of ten (10) miles of the Site or of any
      other Krispy Kreme Store or Commissary Facility then open or under
      construction, where such services could be reasonably expected to benefit,
      either directly or indirectly, whether financially or otherwise, from the
      disclosure of any Confidential Information to such Competitive
      Business;                                                                                                                           
| |    
| | (d) |  | recruit or hire any
      Person who is Franchisors employee or the employee of any Krispy Kreme
      Store or Commissary Facility or who has been Franchisors employee or the
      employee of any Krispy Kreme Store or Commissary Facility within the past
      six (6) months without obtaining prior written permission from Franchisor
      and that Persons employer. If Franchisor permits Owner to hire any such
      Person, then Owner agrees to pay Franchisor a non-refundable Management
      Development Fee in the amount of Twenty-Five Thousand Dollars ($25,000)
      per hired employee as of the date of hire; or
| |    
| | (e) |  | induce or attempt to
      induce any Person who is Franchisors employee or the employee of any
      Krispy Kreme Store or Commissary Facility to discontinue working for
      Franchisor or such Krispy Kreme Store or Commissary Facility as the case
      may be.                                                                                                                                                                                                                                                                                                                                                                        

C-2

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7. Owner expressly acknowledges the
possession of skills and abilities of a general nature and the opportunity to
exploit such skills in other ways, so that enforcement of the covenants
contained in Sections 5 and 6 of these covenants will not deprive
him/her of his/her personal goodwill or ability to earn a living. If any
covenant herein which restricts competitive activity is deemed unenforceable by
virtue of its scope or in terms of geographic area, type of business activity
prohibited and/or length of time, but could be rendered enforceable by reducing
any part or all of it, Owner agrees that it will be enforced to the fullest
extent permissible under applicable law and public policy. Franchisor may obtain
in any court of competent jurisdiction any injunctive relief, including
temporary restraining orders and preliminary injunctions, against conduct or
threatened conduct for which no adequate remedy at law may be available or which
may cause it irreparable harm. Owner acknowledges that any violation of
Sections 4, 5, or 6 of these covenants would result in
irreparable injury for which no adequate remedy at law may be available. If
Franchisor files a claim to enforce this Agreement and prevails in such
proceeding, Owner agrees to reimburse Franchisor for all its costs and expenses,
including reasonable attorneys fees.

8. Owner agrees that the U.S. District
Court for the Middle District of North Carolina, or if such court lacks
jurisdiction, the Superior Court (or its successor) for Forsyth County North
Carolina, shall be the venue and exclusive forum in which to adjudicate any case
or controversy arising from or relating to these covenants. In the event a case
or controversy is to be heard by the Superior Court (or its successor) for
Forsyth County North Carolina, any party may request that the matter be assigned
to the North Carolina Business Court. Owner irrevocably submits to the
jurisdiction of such courts and waives any objections to either the jurisdiction
of or venue in such courts. Owner irrevocably waives, to the fullest extent he
or she may lawfully do so, the defense of an inconvenient forum to the
maintenance of such suit, action or proceeding and agrees that service of
process for purposes of any such suit, action or proceeding need not be
personally served or served within the State of North Carolina but may be served
with the same effect as if he or she were served within the State of North
Carolina, by certified mail or any other means permitted by law, addressed to
Owner at the address set forth herein. Nothing contained herein shall affect
Franchisors rights to bring a suit, action or proceeding in any other
appropriate jurisdiction, including any suit, action or proceeding brought by
Franchisor to enforce any judgment against Owner entered by a State or Federal
Court.

9. If Franchisor claims in any judicial
proceeding that Owner has breached any of the covenants contained herein, and
Franchisor prevails on such claims, then Franchisor shall be awarded its costs
and expenses incurred in connection with such proceedings, including reasonable
attorneys fees.

IN WITNESS
WHEREOF, the undersigned has executed and delivered this Agreement on the ___
day of _________, ______.

|OWNER             
|------------------
|                  
|(Signature)       
|                  
|                  
|(Print
      Name)
|                  
|                  
|                  
|(Address)         

C-3

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EXHIBIT D

TO THE FRANCHISE AGREEMENT BETWEEN
KRISPY KREME DOUGHNUT CORPORATIONAND

______________________________DATED ______________,
________

Automatic Debit Notification (ADN)
Program Authorization for ACH Debits or Credits

The undersigned Franchisee hereby
authorizes Krispy Kreme Doughnut Corporation (KKDC) to initiate debit and/or
credit entries via the Automated Clearing House (ACH) to the bank account
established with the bank shown below. This authority is to remain in full and
force and effect until the bank has received written notification from
Franchisee of the termination of such authority and such termination has been
confirmed in writing by KKDC.

|BANK NAME                     |  | City, State              
|----------------------------- |  | -------------------------
|                              |  |                          
|                              |  |                          
|Bank Transit/ABA
      Number |  | Bank Account
      Number
|                             
|                              |  |                          
|                              |  |                          
|                              |  |                          
|Franchisee (Print
      Name) |  |                          
|                              |  |                          
|                              |  |                          
|By:                           |  |                          
|                              |  |                          
|                              |  |                          
|Title:                        |  |                          
|                              |  |                          
|                              |  |                          
|Date:                         |  |                          

D-1

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EXHIBIT E

TO THE FRANCHISE AGREEMENT BETWEEN
KRISPY KREME DOUGHNUT CORPORATIONAND

______________________________DATED______________,
________

AUTHORIZED OFF-PREMISES
SALES

By signing
below, Franchisor authorizes Franchisee to make sales of the specified Products
to the following locations on a non-exclusive basis from Store Number
______located at ___________________________. Capitalized terms used herein
shall have the meanings ascribed to them in the Franchise Agreement for Store
Number ____. Franchisor may impose other terms and conditions from time to time
by written directives. This authorization runs concurrently with the term of the
Franchise Agreement for the store and terminates automatically and without
notification on any termination or expiration of that agreement. In addition,
either party may terminate this authorization, with or without cause, upon
180-days written notice to the other party.

|Products:                               |  |           
|--------------------------------------- |  | ----------
|                                       
|                                        |  |           
|                                        |  |           
|                                        |  |           
|                                        |  |           
|Locations:                              |  |           
|                                        |  |           
|                                        |  |           
|                                        |  |           
|                                        |  |           
|                                        |  |           
|KRISPY
      KREME DOUGHNUT CORPORATION |  | FRANCHISEE
|                                        |  |           
|By:                                     |  |           
|                                        |  |           
|Its:                                    |  |           
|                                        |  |           
|Date:                                   |  |           

E-1

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