Teacher:In this task, you're given a passage that represents a legal contract or clause between multiple parties, followed by a question that needs to be answered. Based on the paragraph, you must write unambiguous answers to the questions and your answer must refer a specific phrase from the paragraph. If multiple answers seem to exist, write the answer that is the most plausible.
Teacher: Now, understand the problem? Solve this instance: FRANCHISE AGREEMENT

                              TABLE OF CONTENTS

I.    INTRODUCTION

II.   AGREEMENT

      1.    Definitions

      2.    Franchise Grant; Term

            2.1   Grant             2.2   Term             2.3   No Renewal Right: No Exclusivity             2.4   Continuous Operation             2.5   Best Efforts

      3.    Consideration for Franchise Grant

      4.    Management, Control and Corporate Documents of Franchisee

            4.1   Managing Director             4.2   Director of Operations             4.3   Substitute Director of Operations             4.4   Restaurant Manager             4.5   Corporate Documents                   4.5.1 Single Purpose Entity                   4.5 2 Managing Director's Authority                   4.5.3 Issuance and Transfer of Shares                   4.5.4 Amendments

      5.    Standards and Uniformity             5.1   Strict Compliance             5.2   The MOD Manual             5.3   Building and Premises                   5.3.1 Initial Construction                   5 3 2 Repair and Maintenance                   5 3.3 Current Image             5.4   Signs             5.5   Equipment             5.6   Vending Machines, Etc.

            5 7   Menu Service and Hygiene             5.8   Hours of Operations             5.9   Uniforms             5.10  Advertising and Promotion Materials             5.11  Interference with Employment Relations of Others             5.12  Improvements             5.13  Self-Audit             5.14  Health Problems             5.15  Right of Entry, Inspection and Closure             5.16  Sources of Supply                   5.16.1 Authorized Suppliers                   5.16.2 Self-Supply                   5.16.3 Limit on BKC Responsibility                   5. 16.4     Franchisee's Responsibilities

      6.    Services to Franchisee

            6.1   Services Provided By BKC             6.2   Services Not Provided By BKC             6.3   Optional Services

      7.    Location             7.1   Exclusive Purpose             7.2   Damage to Franchised Restaurant

      8.    Training and Staffing

            8.1   Pre-Opening Training             8.2   New Director of Operations             8.3   Training Program

      9.    Royalty and Advertising Contribution





            9.1   Royalty                   9.1.1 Payment of Royalty                   9.1.2 Inability to Remit Royalty             9. 2. Advertising and Sales Promotion                   9.2.1 Franchisee's Administration of Ad Fund                   9.2.2 BKC's Right to Administer Funds                   9.2.3 Administration                   9.2.4 Compliance with Laws and Policies             9.3   Gross Sales             9.4   Interest and Attorney's Fees

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      10.   Accounting Procedures;  Right of Audit.

            10.1  Accounting             10.2  Annual Financial Statements             10.3  Audits             10.4  Release of Financial Information             10.5  Polling                   10.5.1 POS Systems                   10.5.2 Authorized Polling                   10.5.3 Other Information

      11.   Limitations of Franchise             11.1  Trademarks, Trade Names, Service Marks and Trade Secrets                   11.1.1 Registration Assistance by Franchisee                   11.1.2 Ownership                   11 1.3 Confidentiality of trade Secrets                   11.1 4 Registered User Agreements                   11.1.5 No Impairment of Marks                   11.1.6 Assignment of Righits in Marks                   11.1.7 Infringement, Etc.                   11.1.8 Registered Marks                   11.1 9 Franchisee Name                   11.1.10     Registration of Agreement             11.2  Independent Contractor                   11.2.1 No Agency                   11.2.2 Public Notice of Independence

      12.   Unfair Competition

      13.   Insurance; Indemnification             13.1  General Liability Insurance             13.2  Workers Compensation, Etc.             13.3  Indemnity

      14.   Taxes             14.1  Payment When Due             14.2  Withholding Taxes             14.3  Election

      15.   Disposal             15.1  Transfer of Interest by Franchisee             15.2  Transfer of Interest by Principals             15.3  Notice of Proposed Transfer             15.4  Right of First Refusal

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                  15.4.1 Notice; Exercise of Option                   15.4.2 No Waiver                   15.4.3 Unauthorized Transfer Void                   15.4.4 Sale; BKC Consent

            15.5  BKC Consent to Transaction                   15.5.1Transfer of Substantially All Assets or Transfer of                         Stock by Principal                   15.5.2 Securities Offerings





                           15.5.2 1    Compliance with BKC Requirements                            15.5.2.2    Submission to BKC                            15.5.2.3    Registration Rights: Secondary Offerings                            15.5.2.4    BKC ' Expenses                   15.5.3 Certain Exceptions

            15.6  No Waiver             15.7  Death or Mental Incapacity of Principal             15.8  Corporate Documents             15.9  Assignment by BKC

      16.   The Principals

            16.1  Stock Ownership             16.2  Compliance by Principals             16.3  Guaranty

      17.   Defaults and Effects of Termination

            17.1.1 Events of Default by Franchisee             17.1.2 Event of BKC De fault             1 7.2       Termination             17.3        Effect of Termination             17.4        Post-Termination Option             17.5        Post-Termination Obligations of Franchisee                         17.5.1 Options to Purchase Location                         17.5.2 Deidentification                         17.5.3 BKC Lien                         17.5.4 Acceleration of Payments

            17.6  Dispute Resolution

      18.   Restrictive Covenant

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      19.   Miscellaneous: General Conditions             19.1  Interpretation             19.2  Non-Waiver             19.3  Governing Law/Jurisdiction             19.4  Licenses, Permits. Etc.             19.5  Compliance with Laws             19.6  Remedies             19.7  Severability             19.8  Notices                   19.8.1 Notice to BKC                   19.8.2 Notice to Franchisee/Principals                   19.8.3 Delivery             19.9  Language             19.10 Modification             19.11 Binding Effect             19.12 Currency             19.13 Survival             19.14 Agency

      20.   Entire Agreement

      21.   independent Advice

III.  SCHEDULE 1

IV.   SCHEDULE 2

V.    EXHIBIT A - Poland Trademarks





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                               FRANCHISE AGREEMENT                                -------------------

                                                            Corporate                                                             --------- AGREEMENT dated         199

Between        BURGER  KING  CORPORATION  a  company  incorporated  in  Florida,                United States of  America  with  its  principal  office and place                of business at  17777 Old  Cutler Road,  Miami,  Florida,  United                States of America (BKC)

AND            The  party  specified  as  the  Franchisee on SCHEDULE 1 attached                hereto (the Franchisee)

AND            The party  or  parties  specified as the Principals on SCHEDULE 1                attached hereto (collectively, the Principals and individually,                a Principal)

                                  INTRODUCTION

      A.    BKC has  developed  a system  (the  Burger  King  System)  for the operation of quick service restaurants ( Burger King Restaurants).  The Burger King System includes proprietary designs for restaurant buildings, equipment and decor,  a  proprietary   service  format,   standardized   product  and  quality specifications,  and such  trademarks,  service marks and other marks as BKC may authorize  for use in connection  with the operation of Burger King  Restaurants (the Burger King Marks).

      B.    The Franchisee possesses knowledge and market information concerning the  operation  of Burger  King  Restaurants  in the  Republic of Poland and the Franchisee  recognizes that BKC has not made any representations  concerning the level and extent of the  awareness  of the Burger  King Marks or the Burger King System or the  likelihood  that any such awareness can or will be established in Poland or as to the  availability  of local  sources  of supply in Poland or the ability of any supplier to meet  standards  for approval by BKC. The  Franchisee has  requested a license to operate a Burger  King  Restaurant.  The  Franchisee represents  that BKC has not made,  and the  Franchisee is not relying upon, any representation  as to the profits and/or sales volumes which Franchisee might be expected  to  realize,  or costs or levels of costs  which  Franchisee  might be expected to incur,  or the  prospects of success for  Franchisee  or Burger King Restaurants in Poland.

      C.    The  Franchisee  acknowledges  and  represents  to  BKC  that  it is entering into this Agreement after having made an independent  investigation  of BKC and its operations and of market and economic  conditions in the Republic of Poland. The Franchisee represents that BKC has not made, and that the Franchisee

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is not relying upon, any  representation  as to the profits and/or sales volumes which Franchisee might be expected to realize, or costs or levels of costs which the Franchisee  might be expected to incur,  or the prospects of success for the Franchisee or Burger King  Restaurants in Poland,  or the level or extent of the awareness  of the Burger King Marks or the Burger King System or brand in Poland or the likelihood  that any such awareness can or will be established in Poland, or the  availability  of local sources of supply in Poland or the ability of any such  local  sources  of supply  to meet  standards  for  approval  by BKC.  The Franchisee  further  represents  and agrees that BKC and  persons  acting on its behalf  have  not  made,   and  the   Franchisee  is  not  relying   upon,   any representations or promises that are not contained in this Agreement.

      D.    Each of the Principals owns an equity interest in the Franchisee.

                                   AGREEMENT

      In  consideration of the fees and other sums payable by the Franchisee and the mutual covenants herein, the parties agree as follows:

1.    DEFINITIONS.  For purposes of this  Agreement,  the following  expressions shall have the meanings given to them below:

      1.1   Affiliate  means  any  company  which is  directly  or  indirectly controlled  by BKC,  controls  BKC, or is  controlled by a company which in turn controls BKC, and control for these purposes means de facto control.

      1.2   Burger King Marks has the meaning ascribed to it in Paragraph A of the introduction.





      1.3   Burger King  System has the meaning  ascribed to it in Paragraph A of the introduction.

      1.4   Current  Image  means  the then  current,  BKC  approved  physical appearance  of new Burger King  Restaurants  as it relates to  signage,  fascia, color   schemes,   menu  boards,   lighting,   furniture,   finishes  and  other non-structural matters generally.

      1.5   Franchised Restaurant means the buildings at the Location and the business carried out at the Location.

      1.6   Gross Sales has the meaning ascribed to it in Subparagraph 9.3.

      1.7   Location has the meaning ascribed to it on SCHEDULE 1.

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      1.8   Director  of  Operations  has  the  meaning   ascribed  to  it  in Subparagraph 4.1 and on SCHEDULE 1.

      1.9   Managing  Director has the meaning  ascribed to it in Subparagraph 4.3 and on SCHEDULE 1.

      1.10  MOD  Manual  means all  volumes  of the Manual of  Operating  Data setting out BKC's  standards,  specifications  and  procedures of operation,  as revised from time to time by BKC including both required and recommended.

2.    FRANCHISE GRANT TERM.

      2.1   GRANT. In reliance upon the application and information furnished by the  Franchisee,  and  subject  to the terms and  conditions  contained  in this Agreement,  BKC grants to the Franchisee a license to use the Burger King System and the Burger King Marks in the  operation of a Burger King  Restaurant at that Location.

      2.2   TERM.  The license  hereby  granted  shall  commence on the date the Franchised  Restaurant opens for business (the Commencement Date), and, unless sooner terminated in accordance with the terms and provisions of this Agreement, shall  continue  for the  period of years set forth on  SCHEDULE  1 hereto  (the Term).

      2.3   NO RENEWAL RIGHT; NO EXCLUSIVITY.  The Franchisee  acknowledges  and agrees  that  this  license  is a license  for the  operation  of a Burger  King Restaurant  at the  Location  only and that the  Franchisee  has no right to any exclusive  territory or to object to the location of an  additional  Burger King Restaurant  at a site  which is in the  immediate  proximity  of the  Franchised Restaurant and/or in the same trading area of the Franchised  Restaurant Subject to the Restaurant  Development Agreement between BKC and International Fast Food Corporation dated March 14, 1997, (the Development Agreement), the development and location of additional Burger King Restaurants shall be determined by BKC in its sole business  judgment and BKC may develop or franchise  additional  Burger King  Restaurants  anywhere,  including sites in the immediate  proximity of the Franchised  Restaurant  and/or  in the  same  trading  area  of  the  Franchised Restaurant,  in its sole business  judgment.  The  Franchisee  hereby waives any right it has, may have, or might in the future have, to oppose such  development and location,  and any claim for compensation from BKC in respect of any and all detriment or los s suffered by it as a result of the development and location of additional  Burger King Restaurants in the immediate  proximity of the specified Location and/or in the same trading area of the Franchised Restaurant.

      2.4   CONTINUOUS  OPERATION.  Franchisee  shall  continuously  operate the Franchised  Restaurant  at  the  Location  throughout  the  full  term  of  this Agreement.  Except as  permitted  under this  Section  2.4, any failure to do so shall  constitute  an Event of  Default  under this  Agreement  and BKC shall be

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entitled  to alI  rights  and  remedies  available  under  Section  17.2 of this Agreement.  Provided,  however,  that  t he  Franchisee  may  temporarily  cease operations  for a  period  of time  reasonably  necessary  to  comply  with  the requirement  of any  competent  governmental  authority  that it  repair,  clean remodel,  or refurbish the Location.  The Franchisee may also temporarily  cease operations on national holidays and for a period of time reasonably necessary to complete  repairs or deal with an act of God, a labor strike,  civil unrest,  or other emergency  situation  which would endanger the public or the  Franchisee's employees. However, in the event that any temporary closing or discontinuance of





operation  permitted under this Section 2.4 exceeds 180 days, BKC shall have the right to terminate  this  Agreement,  whereupon all rights granted to Franchisee under this Agreement shall terminate, without liability to BKC.

      2.5   BEST  EFFORTS.  Franchisee  shall use its best efforts to diligently market and promote the Franchised Restaurant.

3.    CONSIDERATION  FOR  FRANCHISE  GRANT.  At least  seven (7) days before the Commencement  Date,  the Franchisee  shall pay to BKC the initial  franchise fee described   in  SCHEDULE  1,  which  sum  shall  be  fully  earned  by  BKC  and non-refundable upon execution of this Agreement.

4.    MANAGEMENT. CONTROL AND CORPORATE DOCUMENTS OF FRANCHISEE.

      4.1   MANAGING DIRECTOR.  The Franchisee shall, subject to BKC's approval, appoint an individual as the Managing  Director who shall be  responsible  for the overall management of the Franchisee.  The Managing Director and Director of Operations may be the same individual.

      4.2   DIRECTOR OF OPERATIONS. Franchisee shall, subject to BKC's approval, appoint an individual as the  Director of  Operations  who shall be trained in the Burger  King  System.  The  Director  of  Operations  shall be  granted  the authority to direct any action necessary to ensure that the day-to-day operation of the  Franchised:  Restaurant is in compliance  with all  agreements  with BKC relating to the Franchised  Restaurant.  The Director of Operations shall devote full  time  and  best  efforts  to the  overall  supervision  of the  Franchised Restaurant and any other Burger King  Restaurants  owned by the Franchisee as to which he/she is designated as the Director of Operations. 

      4.3   SUBSTITUTE  DIRECTOR OF  OPERATIONS.  If the position of Director of Operations  becomes  vacant for any reason,  the vacancy  shall be filled within ninety (90) days by a new Director of Operations approved by BKC.

      4.4 RESTAURANT  MANAGER.  At all times during the Term of this  Agreement, Franchisee shall employ at least one (1) individual (the  Restaurant  Manager) who is  responsible  for the direct,  personal  supervision  of the  Franchise d Restaurant .

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      4.5   CORPORATE DOCUMENTS.

            4.5.1 SINGLE PURPOSE  ENTITY.  Franchisee's  sole business  activity shall be the development and operation of Burger King restaurants.  The articles of  incorporation,  bylaws and other  governing  documents  of  Franchisee  must provide that Franchisee is a single purpose entity formed solely for the purpose of developing and operating Burger King restaurants.

            4.5.2 MANAGING DIRECTOR'S AUTHORITY.  The articles of incorporation, bylaws and other governing  documents of Franchisee must mandate the designation of a Managing  Director and describe the Managing  Director's  authority to bind the Franchisee  and to direct any actions  necessary to ensure  compliance  with this Franchise Agreement and any ancillary agreements.

            4.5.3 ISSUANCE   AND   TRANSFER   OF   SHARES.   The   articles   of incorporation,  the  bylaws  and each  stock  certificate  of  Franchisee  shall restrict the issuance  and the transfer of shares of  Franchisee  as provided in Paragraph 15.8 below.

            4.5.4 AMENDMENTS.   BKC  must  be  immediately   provided  with  any amendments,  shareholder agreements,  addenda, revisions or other alterations to the  articles  of  incorporation,  bylaws  or  constitution  of  Franchisee.  No amendment to such  governing  documents may be made,  nor may any  resolution be adopted by the board of directors of Franchisee,  without the written consent of an authorized  officer of BKC, if such amendment or resolution  would (1) change the description of the Franchisee's purpose or authorized activities; (2) change the designation of, or the procedures for  designating,  the Managing  Director; (3) change the authority  delegated to the Managing Director;  or (4) materially alter promises or representations contained in the application approved by BKC.

5.    STANDARDS AND UNIFORMITY.

      5.1   STRICT  COMPLIANCE.  The Franchisee agrees to comply strictly at all times  with  the  Burger  King  System,  which  Franchisee   acknowledges  is  a fundamental term of this Agreement and a necessary and reasonable requirement in the  interests  of the  Franchisee  and others  operating  under the Burger King System.  In  particular,  the  Franchisee  shall at all  times  comply  with the following provisions of this Section 5.

      5.2   THE MOD  MANUAL.  The MOD  Manual  shall  be kept at the  Franchised Restaurant  and all changes or additions  shall be inserted  upon  receipt.  The Franchisee agrees that changes in standards,  specifications  and procedures may become  necessary  and  desirable  from time to time and shall  comply with such modifications,  revisions  and  additions  to the MOD  Manual as BKC in the good





faith  exercise  of its  judgment  believes  to be  desirable.  The  information

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contained in the MOD Manual is confidential and the Franchisee shall use the MOD Manual only in connection  with the operation of the Franchised  Restaur ant and other licensed Burger King Restaurants

      5.3   BUILDING AND PREMISES.

            5.3.1  INITIAL  CONSTRUCTION.  The  Franchised  Restaurant  shall be constructed and the premises  initially  improved in the manner approved by BKC, and shall be decorated, furnished, and equipped with equipment, furnishings, and fixtures which meet BKC's  specifications  and Current Image.  The appearance of the Franchised  Restaurant shall not thereafter be altered except as approved by BKC in writing.

            5.3.2  REPAIR AND  MAINTENANCE.  The  Franchisee  shall,  at its own expense,  continuously  throughout  the  Term of this  Agreement,  maintain  the Franchised Restaurant in good condition and repair in accordance with BKC's then current repair and maintenance standards.

            5.3.3  CURRENT  IMAGE.  During the year  immediately  following  the expiration of one half of the Term of this Agreement  (e.g., in the 11th year of a 20 year term), the Franchisee shall remodel, improve and alter the exterior of the Franchised Restaurant to conform with the Current Image in effect during the prior year .

      5.4   SIGNS.  The Burger King Marks will be  displayed  only in the manner and at such  locations  as are  authorized  by BKC.  The  Franchisee  agrees  to maintain and display signs conforming to the Current Image. The Franchisee shall discontinue the use of and destroy such signs as are declared obsolete by BKC.

      5.5   EQUIPMENT.  Only  equipment  and equipment  layouts  approved by BKC shall be used at the Location.  All equipment shall be maintained in a condition that meets operational  standards  specified in the MOD Manual, and as equipment becomes obsolete or inoperable,  the Franchisee will replace such items with the types and kinds of  equipment  as are then  approved  for use in new Burger King Restaurants at the time of  replacement.  If BKC determines  that  additional or substitute  equipment  is needed in any part of the  Location due to a change in menu items or method of preparation and service,  or because of health or safety considerations,  the Franchisee will install the new equipment  within such time as BKC may reasonably specify.

      5.6   VENDING MACHINES,  ETC. No telephone  booths,  newspaper racks, juke boxes,  vending  machines,  games,  rides or any other type of machines shall be installed without the prior written approval of BKC.

      5.7   MENU, SERVICE AND HYGIENE. The Franchised Restaurant shall serve all menu items and brands  specified  by BKC, and shall not serve any items that are not set forth in the MOD Manual or otherwise  authorized  and approved by BKC in writing. The Franchisee shall adhere to all specifications  contained in the MOD

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Manual or as otherwise prescribed by BKC as to ingredients,  storage,  handling, method of preparation and service, weight and dimensions of products served, and standards of cleanliness,  health,  and sanitation.  All food, drinks, and other items will be served and sold in packaging that meets BKC's specifications. Only food, paper products, packaging and supplies from sources approved by BKC (which expression  includes sources of both product and distribution)  shall be used in the Franchised Restaurant.

      5.8   HOURS OF  OPERATION.  Subject to the  provisions  of  Paragraph  2.4 above, or unless otherwise  authorized or directed by BKC the entire  Franchised Restaurant  shall be open for  business  a  minimum  of the hours  indicated  on SCHEDULE  1 daily,  seven (7) days a week,  except  where  prohibited  by law or government  regulation.  BKC  recognizes  that  considerations  peculiar  to the location  of the  Franchised  Restaurant  may make it  necessary  to  alter  the aforesaid hours of operation, and BKC will not unreasonably withhold its consent to do so.

      5.9   UNIFORMS.   All  employees  at  the  Location  shall  wear  uniforms previously approved by BKC as meeting the design, color and specification as are from time to time prescribed by BKC.





      5.10  ADVERTISING  AND  PROMOTION  MATERIALS.  Only  such  advertising  or promotional  materials,  slogans  or  other  items as are  authorized  by BKC in writing prior to use shall be used, sold, or distributed,  and no display or use of the Burger King Marks shall be made without the prior  written  permission of BKC. All materials on which Burger King Marks are used shall bear such notice of registration  or license  legend as BKC may specify.  The  Franchisee  agrees to comply with the advertising and promotional  standards  established from time to time by BKC.

      5.11  INTERFERENCE  WITH  EMPLOYMENT  RELATIONS OF OTHERS.  The Franchisee will not attempt,  directly or  indirectly,  to entice or induce any employee of BKC or of an  Affiliate  of BKC or of  another  franchisee  of BKC to leave such employment,  nor to employ such employee  within six (6) months after his or her termination  of  employment  with such  employer,  except with the prior written consent of such employer.

      5.12  IMPROVEMENTS.  The  Franchisee  shall  notify  BKC of any  potential improvements  or new features which it identifies as capable of benefitting  the Burger King System.  The Franchisee shall not use potential  improvements or new features at the Franchised Restaurant unless authorized by BKC in writing and at its sole  discretion,  but BKC is under no obligation to authorize such use. The Franchisee  acknowledges and agrees that all such potential improvements and new features  shall  become the  exclusive  property of BKC  without  payment of any consideration  to the  Franchisee,  and BKC is free to evaluate  such  potential improvements  or new  features in its own  restaurants  and  introduce  any such improvements  or new features into the Burger King System for the benefit of BKC

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and other franchisees. The Franchisee agrees to execute any additional documents which BKC may deem  necessary  to  effect  or  perfect  the  provisions  of this Paragraph 5.12.

      5.13  SELF-AUDIt.  The  Franchisee  shall  participate  in any  self-audit scheme which may from time to time form part of the Burger King System.

      5.14  HEALTH PROBLEMS.  The Franchisee shall immediately notify BKC of any actual or suspected  occurrence of any serious communicable disease or infection at or among staff or customers at the Franchised Restaurant.

      5.15  RIGHT  OF  ENTRY,   INSPECTION  AND  CLOSURE.  BKC  shall  have  the unrestricted right to enter the Franchised Restaurant to conduct such reasonable activities as it deems  necessary to ascertain  compliance  with this Agreement. The  inspections  may be  conducted  without  prior  notice at any time when the Franchisee or any one of its responsible  employees or representatives is at the Franchised  Restaurant.  The  inspections  shall be  performed in a manner which minimizes interference with the operation of the Franchised Restaurant.  BKC may require the removal of any items which do not comply with this  Agreement at the Franchisee's cost. In the event that BKC identifies,  or reasonably suspects the existence  of,  any  significant  risk to health or safety in any  aspect of the operation at the Location,  BKC may require the Franchisee  immediately to close the Franchised Restaurant until the hazard as been eliminated. BKC shall specify the  grounds  for taking  such  action and such steps if any a it  believes  are necessary to eliminate  the hazard and shall  cooperate  with the  Franchisee to enable the Franchisee to re-open the Franchised Restaurant as soon as possible.

      5.16  SOURCES OF SUPPLY.

            5.16.1 AUTHORIZED SUPPLIERS.  BKC may require that any item required for or used in the operation of the  Franchised  Restaurant  shall be previously approved by BKC in its sole and  absolute  discretion  and that the supplier and distributor  of such items also be  previously  approved  by BKC in its sole and absolute  discretion.  The Franchisee  shall in such case purchase only from BKC authorized  suppliers  and  distributors.   Should  the  Franchisee  propose  an alternative  supplier and  distributor,  BKC shall  evaluate  such  supplier and distributor against its then-current criteria, as established by BKC in its sole discretion, and either approve or disapprove such supplier and distributor.  Any supplier and  distributor  proposed by the  Franchisee may be required to sign a suitable  confidentiality  undertaking before BKC's confidential  specifications are disclosed.  In approving or  disapproving  suppliers and  distributors,  the Franchisee  acknowledges  and agrees that BKC may devote such resources and time as BKC may  reasonably  determine is necessary to evaluate any such  supplier or distributor in its sole discretion. BKC agrees that it will apply those criteria in good faith toward the Franchisee.  If BKC denies the Franchisee's request for approval of a supplier or  distributor  BKC shall advise the  Franchisee  of the reasons  for its  decision.  If BKC fails to  approve  or deny the  Franchisee's

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request for approval of a supplier or  distributor  within  thirty (30) business days then approval  shall be deemed to have been given.  Approval of any suppler or distributor by BKC is subject to revocation in its sole discretion.

            5.16.2  SELF-SUPPLY.  Franchisee  may, upon prior written  notice to BKC,  invest in BKC approved  suppliers  and/or  distributors  to the Franchised Restaurant or request  approval from BKC to become an approved  supplier  and/or distributor to the Franchised  Restaurant.  BKC shall not unreasonably  withhold its  approval  of  the  Franchisee  as a  supplier  and/or  distributor  to  the Franchised Restaurant and/or other Burger King Restaurants. Franchisee expressly acknowledges  and agrees,  however,  that the Franchisee  must meet all of BKC's then current conditions for supplier and/or distribution agreements.

            5.16.3 LIMITS ON BKC RESPONSIBILITY.   BKC shall NOT be responsible for the following:

                        (a) Arranging, assuring, or facilitating the delivery or                   availability  o  labor,  food,  paper,  equipment,  furniture,                   fixtures,  or any other goods or services in  connection  with                   the operation of the Franchised Restaurant.

                        (b) Arranging, assuring, or facilitating the delivery or                   availability  of labor,  food,  paper,  equipment,  furniture,                   fixtures or any other goods or services in connection with the                   operation of the  Franchised  Restaurant at a reasonable or at                   any other  particular  cost (whether stated as a percentage of                   sales or  otherwise  to the  Franchised  Restaurant  or to the                   Franchisee).

            5.16.4   FRANCHISEE'S   RESPONSIBILITIES.    Franchisee   shall   be responsible for locating and submitting to BKC for approval, pursuant to Section 5.16.1  above,  suppliers  and  distributors  capable  of  manufacturing  and/or delivering all BKC required goods and services to the Franchised Restaurant on a consistent and reliable basis.

6.    SERVICES TO FRANCHISEE.

      6.1   SERVICES PROVIDED BY BKC.  BKC,  its designee or an Affiliate of BKC shall periodically advise and consult with the Franchisee in connection with the operation of the Franchised Restaurant and shall provide to he Franchisee:

            (a) The MOD Manual,  including all  revisions  and updates  thereto, which  will be  loaned to the  Franchisee  for the term of this  Agreement.  The loaned copy of the MOD Manual and other  specifications,  standard and operating procedures  furnished by BKC shall be written in English, and any translation to another  language  shall  be  at  the  Franchisee's   responsibility  and  cost.

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Franchisee  shall  translate  the MOD  Manual  into the native  language  of the employees at the  Franchised  Restaurant  upon request by BKC. The delivery of a copy of the MOD Manual,  including all revisions and updates thereto,  by BKC to the  Franchisee  satisfies and fulfills any obligation BKC may be deemed to have to provide  the  Franchisee  with use of the  Burger  King  System or  expertise regarding he Burger King System.

            (b) A representative of BKC who shall make not less than two (2) one day visits to Poland  per annum to provide  the  Franchisee  with any  requested reasonable  operations or marketing  guidance and advice.  Franchisee shall have the  option to  participate,  at its sole cost and  expense,  in any  additional training pro grams offered by BKC to other franchisees generally.  Such training programs shall be at locations designated by BKC.

            (c) Communication of new  developments,  techniques and improvements of BKC which BKC deems in its sole discretion to be relevant to the operation of the  Franchised  Restaurant  and which BKC may otherwise  make  available to all other franchisees in Europe.

      6.2   SERVICES NOT PROVIDED BY BKC. The Franchisee acknowledges and agrees that  compliance  by BKC with its  obligations  under  Section  6.1 above  shall satisfy all  obligations  of BKC to provide  operational,  marketing,  and other support to the Franchisee,  and that any other support  provided by BKC shall be at BKC's sole discretion.  The Franchisee  further  acknowledges and agrees that BKC shall have no obligation with regard to the  establishment,  development and for  maintenance of consumer  awareness or recognition of the Burger King Marks, Restaurants or System.

      6.3   OPTIONAL  SERVICES.  BKC may,  but shall under no  circumstances  be required to, offer the following  services and/or  assistance to Franchisee,  in BKC's sole discretion:

            (a) If  requested by  Franchisee,  BKC may, at its sole and absolute discretion,   provide   Franchisee  with  a  pre-opening   training  program  at Franchisee's sole cost and expense at whatever location BKC may designate in its sole discretion.





            (b) If  requested by  Franchisee,  BKC may, in its sole and absolute discretion,  provide  Franchisee with  pre-opening  and opening  supervision and assistance  by  personnel  of  BKC,  its  designee  or an  Affiliate  of  BKC at Franchisee's sole cost and expense at whatever location BKC may designate in its sole discretion.

7.    LOCATION.

      7.1   EXCLUSIVE  PURPOSE.  During the term of this  Agreement the Location shall be used exclusively for the purpose of operating a Burger King Restaurant.

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      7.2   DAMAGE TO FRANCHISED RESTAURANT.  In the event of the building being damaged or destroyed  by fire or any other peril,  or required to be repaired or altered by any  competent  authority,  the  Franchisee  shall at its own expense repair or reconstruct  the building within a reasonable time to reflect the then Current  Image of Burger King  Restaurants,  having  first  submitted to BKC all plans  and  specifications  related  thereto  for  prior  approval.   Where  the Franchised  Restaurant  is insured by a person  other than the  Franchisee,  the Franchisee's obligations shall be limited to taking such steps as are reasonably available to the  Franchisee to assure that any insurance  moneys ar paid out in accordance with this  subparagraph.  Notwithstanding  the foregoing,  if (a) the building is leased,  (b) the  Franchisee  is  prohibited  under the terms of the applicable  lease from  repairing  or  reconstructing  the  building as provided above,  and (c) the  Franchisee  has  exhausted its best efforts to convince the landlord to consent to such repair or reconstruction,  then the Franchisee shall be released from its  obligations  under this  Paragraph 7.2 and this  Agreement shall terminate.

8.    TRAINING AND STAFFING.

      8.1   PRE-OPENING  TRAINING.  Before the Franchised  Restaurant opens, the Director of Operations and such members of the  Franchisee's  staff charged with the responsibility for the day to day operation of the Franchised  Restaurant as BKC may determine must have  successfully  completed  BKC's training  program at such location in the U.S. or elsewhere as may be designated by BKC. Such members of t e Franchisee's  restaurant  staff as BKC may determine  shall undertake and complete continuing raining programs from time to time as may be directed by BKC in order to implement current  operational  standards.  There shall be no charge for  participation  in the  training  programs,  but  the  Franchisee  shall  be responsible  for  all  travel  and  living  expenses,  all  compensation  of the Franchisee's  employee  while  enrolled in the training  program,  and any other personal expenses incurred.

      8.2   NEW DIRECTOR OF  OPERATIONS.  Any new Director of  Operations as BKC may approve shall successfully  complete the above program before taking up such position.

      8.3   TRAINING PROGRAM.  The Franchisee shall implement a training program for Franchised  Restaurant  employees in accordance with training  standards and procedures  prescribed by BKC and shall staff the  Franchised  Restaurant at all times with a sufficient number of trained employees including the minimum number of managers  required by BKC who have  completed  BKC's  training  program at an accredited location.

9.    ROYALTY AND ADVERTISING CONTRIBUTION.

      9.1   ROYALTY.

            9.1.1 PAYMENT OF ROYALTY.  Except as otherwise provided in Section 5 3 of the   Development Agreement, by the fifteenth (15th) day of each month, the

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Franchisee  shall deliver to BKC a return of Gross Sales for the preceding month and pay to BKC or its designee a royalty for the use of the Burger King Marks an the Burger  King  System  calculated  by applying  the  percentage  set forth in SCHEDULE  1  against  the Gross  Sales for the  preceding  calendar  month.  All royalties  shall be paid by the  Franchisee  to BKC or its  designee  in  United States  currency  into such bank  account  in the  United  States of  America or elsewhere as BKC shall designate by prior written notice to the Franchisee. Such payments  shall be made by such  method as BKC may from  time to time  stipulate including  direct debit, in accordance with applicable law. Each conversion from local currency to United States currency shall be at the maximum selling rate of exchange  quoted by  Citibank,  N.A. in New York,  New York,  U.S.A.,  or at the





maximum  selling rate of a nationally  recognized  bank in the country where the Franchised  Restaurant is located, at the sole discretion of BKC, as of the last bank  trading  day of the  month on which the  royalty  payment  is  based.  The Franchisee will, at its expense, make all necessary and appropriate applications to  such  governmental  authorities  as  may  be  requested  by BKC or as may be required for transmittal and payment of United States currency to BKC.

            9.1.2  INABILITY TO REMIT ROYALTY.  In the event that the Franchisee shall at any time be prohibited from making any payment in the United States and in United States currency,  the Franchisee shall immediately  notify BKC of this fact and such payment shall thereupon be made at such place and in such currency as may be  selected  by  BKC  and  acceptable  to the  appropriate  governmental authorities of the country in which the Franchised Restaurant is located, all in accordance  with  remittance  instructions  furnished by BKC. If, having pursued every  reasonable  endeavor,  the  parties are  thereafter  unable to secure any method of payment to BKC as required in Subparagraph  9.1.1 above, then BKC may, in its sole discretion,  either (a) accept  subsequent  payments in a manner and currency acceptable to BKC in its sole discretion,  or (b) by one-hundred eighty (180) days prior written notice to the  Franchisee,  immediately  terminate this Agreement  without  any claim  being mad by either  party  against  the other in respect to such  termination.  The acceptance by BKC of; ny payment  pursuant to Subparagraph  9.1.2(a) above shall not excuse the Franchisee from its obligation to pay all  subsequent  payments as required  under  Subparagraph  9.1.1 and BKC remain free to exercise  its right under  Subparagraph  9.1.2(b) as each monthly royalty payment comes due.

      9.2   ADVERTISING AND SALES PROMOTION.

            9.2.1 FRANCHISEE'S  ADMINISTRATION OF AD FUND. Pursuant to the terms of the Ad Fund  Agreement  dated March 14, 1997 between the  Franchisee and BKC, the  Franchisee  shall  expend  monthly,  in the  country  where the  Franchised Restaurant  is  located,  monies for  advertising,  sales  promotion  and public relation services for he benefit of Burger King Restaurants in the country where the Franchised Restaurant is locate, including creative,  production,  media and clearance  costs of advertising  and sales  promotion  materials,  and marketing

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research  expenses  directly  related to the  development  and evaluation of the effectiveness of advertising and sales promotion. (SUBJECT TO A PENDING  REQUEST FOR CONFIDENTIAL TREATMENT)

            9.2.2 BKC'S RIGHT TO ADMINISTER FUNDS.  Notwithstanding the language in Subparagraph  9.2.1 above,  BKC and the Franchisee  agrees that, in the event BKC  develops  company-owned  Burger  King  Restaurants  directly  or  through a subsidiary or joint venture in the country  where the  Franchised  Restaurant is located  or  franchises  Burger  King  Restaurants  in  the  country  where  the Franchised Restaurant is located to someone other than the Franchisee, BKC shall have the right to  terminate  the Ad Fund  Agreement  pursuant  to its terms and require that the Franchisee pay to BKC or its designee by the fifteenth  (15th') day of  each  month,  in  the  currency  of the  country  where  the  Franchised Restaurant  is located an amount equal to the amount  calculated by applying the advertising percentage stated in SCHEDULE 1 to the Gross Sales for the preceding calendar  month.  Any monies  received by BKC under this  Subparagraph  shall be administered  by BKC as provided in  Subparagraph  9.2.3 below. In the event BKC requires  and the  Franchisee  makes  these  payments,  the  direct  expenditure obligation of Subparagraph 9.2.1 above will be deemed fully satisfied.

            9.2.3  ADMINISTRATION.  Any  amounts  received  by BKC  pursuant  to Subparagraph 9.2.2 above, less administrative expenses and any applicable taxes, will be combined with payments from other Burger King  Restaurants to form an ad fund which will be used for (a) market research expenditures directly related to the  development  and evaluation of the  effectiveness  of advertising and sales promotions, (b) creative, production and other costs incurred in connection with the development of advertising  sales promotions and public  relations,  both in the market area of the Franchised  Restaurant as reasonably defined from time to time by BKC, and on a national  basis and (c) various  methods of delivering the advertising or promotional  message,  including without limitation,  television, radio, outdoor and print. The allocation of the Advertising Contribution between international,  national,  regional, and local expenditures shall be made by BKC in its sole  business  judgment.  All general and  administrative  expenses  and overhead  associated  with the ad  fund,  including  salaries  of  relevant  BKC employees,  shall be paid out of the assets of the ad fund.  The  Franchisee  is encouraged to participate in the planning of advertising,  sales  promotions and public  relations for the Franchised  Restaurant,  but all expenditures for such matters shall be the sole  discretion  of BKC. In addition to the  percentage of Gross  Sales,  the  Franchisee  agrees to  transfer to BKC or its  designee  for inclusion in the market fund all advertising or promotional  allowances given by suppliers of products which are sold in the Franchised  Restaurant uncle a brand name. Such payment to be made to BKC or its designee by the fifteenth (15th) day of the month following  receipt of the said  allowance.  The market fund will be run by BKC directly or by delegation to its designee.





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            9.2.4  COMPLIANCE WITH LAWS AND POLICIES.  The Franchisee  agrees to adhere to all applicable  statutory  regulations and to KC's advertising,  sales promotion  and  public  relations  standards  and all  advertisements  and other material published,  circulated or exhibited shall first be approved by BKC. The Franchisee   agree   immediately  to  remove  or  discontinue  the  use  of  any objectionable advertising material upon receiving notice from BKC.

      9.3   GROSS  SALES.  The  term  Gross  Sales  as used in this  Agreement includes all sums charged for goods,  merchandise,  or services  sold at or from the  Location.  The sale of Burger King  products  away from the Location is not authorized;  however, should any such sales be approved in the future, they will be included within the definition of Gross Sales.  Gross Sales shall not include any  value  added  tax,  turnover  tax,  or any  similar  tax  collected  by the Franchisee from customers based upon sales.

      9.4   INTEREST  AND  ATTORNEY'S  FEES.  The  Franchisee  shall  pay to BKC interest (in U.S.  dollars in the United States) upon any sum overdue under this Agreement,  calculated  at three (3)  percent  per annum above the prime rate of merest  charged by  Citibank,  N.A.,  against the overdue sum  expressed in U.S. dollars. By way of exception,  any overdue sum required to be paid in a currency other than U.S.  dollars  shall bear merest at three (3) percent per annum above the base  lending  rate of any  nationally  recognized  bank within the relevant country  designated  by BKC.  Nothing in this  paragraph is meant to require the Franchisee to pay interest at a rate greater than that allowed by applicable law and, in the event that this paragraph would have such an effect,  the Franchisee shall only be required to pay interest at the maximum rate  allowable by law. If an excess amount is inadvertently  collected,  it shall be applied to reduce the amounts due under  Subparagraph 9.1.1 above. The Franchisee shall pay all costs, including reasonable attorney's fees, incurred by BKC in enforcing the tern s of this Agreement.

10.   ACCOUNTING PROCEDURES;  RIGHT OF AUDIT.

      10.1  ACCOUNTING.  The Franchisee  agrees to keep complete  records of the business and shall furnish BKC with monthly and fiscal  year-to-date  profit and loss statements for the Franchised  Restaurant in the format  prescribed by BKC. The  Franchisee  shall  also  submit to BKC  quarterly  balance  sheets  for the Franchisee  itself and not  merely of the  Franchised  Restaurant,  the first of which shall be for the period ending  forty-five  (45) days after the expiration of the first calendar quarter after the Franchised  Restaurant opens. All profit and loss  statements  and  balance  sheets  shall  be  submitted  to BKC  within fifty-five (45) days after the end of the period covered by the report in a form acceptable to BKC. In addition, the Franchisee shall submit to BKC copies of tax returns relating to the Franchisee's  sales at the Franchised  Restaurant at the same time the returns are filed,  and such other  records as BKC may  reasonably request from time to time.

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      10.2  ANNUAL FINANCIAL STATEMENT.  Within ninety (90) days after the close of each fiscal year and at any time on request,  the  Franchisee  shall submit a full disclosure of all  shareholders in the Franchisee,  and of all persons with an interest in the Franchised  Restaurant.  ln addition,  the  Franchisee  shall furnish an annual  financial  statement  for the  Franchisee  and not merely the Franchised Restaurant,  which statement shall be certified by a Certified Public Accountant or equivalent.

      10.3  AUDITS.  The Franchisee agrees that BKC or its  representatives,  at BKC's expense shall, at all reasonable times, have the right to examine or audit the books and  accounts of the  Franchisee.  The  Franchisee  shall retain sales records  for a period  of at least  twenty-four  (24)  months.  In the event the reported Gross Sales are less than the actual Gross Sales,  the Franchisee shall make an additional payment to BKC in the amount of the discrepancy. In the event that the  discrepancy  exceeds  two  percent  (2%),  th  Franchisee  shall  also reimburse BKC for all costs of the audit including travel, lodging and wages.

      10.4  RELEASE  OF  FINANCIAL  INFORMATION.  BKC is  authorized  to release financial and  operational  information on the Franchised  Restaurant as part of any disclosure of information on the Burger King System in the country where the Franchised Restaurant is located or on the Burger King System as a whole. Except as  required  by law or  regulation,  BKC shall not  specifically  identify  the Franchised Restaurant to which this information relates.

      10.5  POLLING.

            10.5.1 POS SYSTEMS. The Franchisee shall at all times operate at the Franchised  Restaurant  POS  systems  previously  approved by BKC as meeting its performance  standards and other  criteria  including  compatibility  with BKC's





polling  standards,  provided that such POS system  operates in accordance  with applicable  law. BKC shall have the right to call upon the Franchisee to upgrade the POS systems as BKC may deem necessary or desirable in the interest of proper administration  of restaurants  operating under the Burger King System,  and the Franchisee shall comply with such requirement within such reasonable time as may be specified by BKC. Such  authorized  POS systems shall at all times be used to record and process such  information  as BKC may from time to time require,  and such  information  shall be  maintained  in such format and kept  available  for access by BKC on such POS system for such minimum period as BKC may require. The Franchisee  she effect  the  polling  operation  at such time or times as may be required  by  BKC,  but  BKC may  itself  initiate  polling  whenever  it  deems appropriate.   BKC  shall  have  no  obligation  to  provide   Franchisee   with information,  consultation  or advice  concerning  POS systems or  accounting or other financial systems for the operation of Franchisee's business.

            10.5.2  AUTHORIZED  POLLING.  The Franchisee shall permit BKC or its duly  authorized  agents  at all  times  and  from  time to  time  to  poll  any

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information contained in such POS system. For the purposes of this Agreement the term  poll  or  polling  means  any  process  acceptable  to  BKC  by  which information  o  data  may  be  transmitted  from a POS  system  operated  by the Franchisee or its agents into a computer or system operated by BKC, it agents or Affiliates.  If for any reason polling is not  practicable,  BKC may require the Franchisee to download such  information  into machine  readable form compatible with the system  operated by BKC,  its agents or  Affiliates  and to derive such information  to  BKC by  such  method  and  within  such  timescale  as BKC  may reasonably determine.

            10.5.3 OTHER  INFORMATION.  The Franchisee shall if requested and as long as polling is not possible  provide to BKC such information as BKC may from time to time require regarding product volumes and production.

11.   LIMITATIONS OF FRANCHISE.

      11.1  TRADEMARKS, TRADE NAMES, SERVICE MARKS AND TRADE SECRETS.

            11.1.1 REGISTRATION ASSISTANCE BY FRANCHISEE.  The Franchisee shall, upon request and at no expense to the  Franchisee  assist BKC in perfecting  and obtaining registration of unregistered Burger King Marks.

            11.1.2 OWNERSHIP.  The Franchisee acknowledges that ownership of all right,  title and  interest  to the Burger King System and the Burger King Marks (registered  and  unregistered)  is and shall remain  vested  solely in BKC. The Franchisee  acknowledges  the  uniqueness  of the Burger King System an that the Franchisee has had no part in its creation or  development,  no prior  knowledge of, and no  proprietary  or other  rights or claims in or to any  element of the Burger King System or the Burger King Marks.

            11.1.3  CONFIDENTIALITY OF TRADE SECRETS. The Franchisee agrees that all materials  made available to the Franchise and all  disclosures  made to the Franchisee,  and not to the general public, by or at the direction of BKC at any time before or during the term of this  Agreement,  including  the MOD Manual in its entirety and any translations thereof, are to be considered trade secrets of BKC for purpose of this Agreement and shall be kept confidential and used by the Franchisee only in the operation of the Franchised Restaurant and other licensed Burger King  Restaurants.  The Franchise  agrees not to divulge any of the trade secrets to any person other than the Franchisee's employees and then only to the extent  necessary for the operation of the  Franchised  Restaurant,  an d not to permit anyone to reproduce, copy or exhibit any portion of the MOD Manual or any other  confidential  or proprietary  information  received from BKC,  except for translating  from English to the language of the country in which the Franchised Restaurant is located, if the Franchisee's  employees cannot read and understand English.

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            11.1.4 REGISTERED USER AGREEMENTS.  The Franchisee  shall,  whenever requested by BKC, enter into one or more Registered User Agreements  authorizing and  permitting  the use of the Burger King Marks as provided in this  Agreement and to execute any  documents  and/or do such things as are  requested to assist BKC in connection with registration of any Registered User Agreement. Nothing in any Registered  User  Agreement  shall be construed as giving the Franchisee the right to transfer or sublicense  the  Franchisee's  right to use the Burger King Marks.





            11.1.5 NO IMPAIRMENT OF MARKS.  The Franchisee  will not directly or indirectly,  at any time during the term of this Agreement or thereafter,  do or cause to be done any act or thing  disputing,  attacking or in any way impairing the validity of and BKC's right,  title or interest in the Burger King Marks and the Burger King System.

            11.1.6  ASSIGNMENT OF RIGHTS IN MARKS. The Franchisee hereby assigns to BKC such rights (if any) as the  Franchisee  may hereafter  acquire in any of the Burger King Marks or the Burger King System and shall execute such documents and do  such  acts  at the  cost  of BKC as may be  necessary  to  perfect  such assignment.

            11.1.7  INFRINGEMENT,  ETC. The Franchisee shall immediately  notify BKC of all  infringements  or  imitations of the Burger King Marks which come to the Franchisee's  attention,  and all challenges to the Franchisee's use c f any of the Burger King Marks. BKC will take such action as it in its sole discretion deems  appropriate  to prevent  unauthorized  persons from using the Burger King Marks.  The Franchisee  agrees to cooperate in the  prosecution of any action to prevent  the  infringement,  imitation,  illegal se or misuse of the Burger King Marks or the  Burger  King  System and agrees to be named as a party in any such action if so requested  by BKC. BKC agrees to bear the legal  expenses and costs incidental to the Franchisee's  participation in such action except for the cost and expenses of the Franchisee's personal legal counsel if the Franchisee elects to be represented by counsel of the  Franchisee's  own choosing.  The Franchisee shall not  institute  any legal  action or other kind of  proceeding  based upon Burger King Marks or the Burger King System  without the prior written  approval of BKC.

            11.1.8  REGISTERED  MARKS.  BKC represents  that the marks listed on Exhibit A are  registered  or applied  for,  but makes no  expressed  or implied warranty  with  respect to the  validity of any of the Burger  King  Marks.  The Franchisee  accepts that the  Franchisee  may conduct  business  utilizing  some Burger King Marks which have not been registered and that  registration  may not be granted for the unregistered marks and that some of the Burger King Marks may be subject to use by third parties unauthorized by BKC.

            11.1.9  FRANCHISEE  NAME.  In the adoption of a trade,  corporate or partnership name, the Franchisee shall not use any of the Burger King Marks, any variations  or  abbreviations  or any words  confusingly  similar  to any of the Burger King Marks.

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            11.1.10  REGISTRATION  OF  AGREEMENT.  If  local  law  requires  the registration  or  recordation  of this  Agreement  with any  local  governmental agency,  administrative board or banking agency,  Franchisee shall request BKC's consent to do so. If BKC grants its consent,  Franchise  shall  effectuate  such registration(s)  or  recordation(s)  at its sole  cost  and  expense  in  strict compliance with local laws as soon as possible.

      11.2  INDEPENDENT CONTRACTOR.

            11.2.1 NO AGENCY.  The franchisee is an independent  business entity and is not an agent, partner, joint venture, representative, or employee of BKC, and no express or implied fiduciary relationship exists between the parties. The Franchisee  shall not attempt to bind or  obligate  BKC in any way nor shall the Franchisee  represent that the Franchisee has any right to do so. BKC shall have no control  over the terms and  conditions  of  employment  of the  Franchisee's employees.

            11.2.2 PUBLIC NOTICE OF  INDEPENDENCE.  In all public records and in the Franchisee's relationship with other persons, on stationery,  business forms and cheques,  the  Franchisee  shall indicate the  independent  ownership of the Franchised  Restaurant  and  that  the  Franchisee  is a  licensee  of BKC.  The Franchisee  shall exhibit on the Location in such places as may be designated by BKC, a notification that the Franchised Restaurant is operated by an independent operator under license from BKC.

12.   UNFAIR  COMPETITION.  The  Franchisee  agrees,  during  the  term  of this Agreement and thereafter,  not to directly or indirectly engage in the operation of any  restaurant,  except as licensed by BKC, which utilizes or duplicates the Burger King System or any part thereof.

13.   INSURANCE, INDEMNIFICATION.

      13.1  GENERAL  LIABILITY  INSURANCE.  Franchisee  agrees  to  carry at its expense  during  the  Term of this  Agreement  Comprehensive  General  Liability insurance, including Products Liability and Broad Form Contractual Liability, in an  amount  which is at all  times  the  local  equivalent  of not less than One Million U.S. Dollars (U.S.  $1,000,000.00)  per occurrence for bodily injury and Five Hundred  Thousand  U.S.  Dollars  (U.S.  $500,000.00)  per  occurrence  for property damage, or in such increased amounts as BKC may reasonably request from time to time during the Term of this  Agreement.  Each policy will name BKC, and its subsidiaries,  affiliated and parent companies as an additional insured, and will provide hat the policy  cannot be canceled  without  thirty (30) days prior





written notice to BKC, will insure against the liability of BKC for both its and Franchisee's  acts or omissions,  and will insure the  contractual  liability of Franchisee  under paragraph 13.3  Additionally,  Franchisee  agrees to carry, at Franchisee's  expense,  umbrella coverage in an amount which is at all times the equivalent  of One  Million  U.S.  Dollars  (U.S.  $1,000,000)  over  the  basic

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Comprehensive  General  Liability  insurance  per  restaurant;  except  that  if Franchisee  owns  more  than ten (10)  Burger  King  Restaurants,  the  umbrella coverage applicable to all such restaurants need not exceed an mount which is at any  time  in  excess  of the  equivalent  of Ten  Million  U.S.  Dollars  (U.S. $10,000,000).  The  insurance  afforded  by the  policy or  policies  respecting liability  shall not exclude  claims,  actions or demands  brought in the United States or anywhere else outside the country in which the  Franchised  Restaurant is located and shall not be limited in any way by reason of any insurance  which may be  maintained  by BKC  prior to the  Commencement  Date,  Franchisee  shall furnish to BKC Certificates of Insurance  reflecting that the insurance coverage is in effect  pursuant to the terms of this  Agreement.  All  policies  shall be renewed,  and a  renewal  Certificate  of  Insurance  mailed  to BKC at its main office,  or at such  other  location  as may be  specified  by BKC  prior to the expiration  date of the  policies.  This  obligation  of  Franchisee to maintain insurance is separate and distinct  from its  obligation  to indemnify BKC under the  provisions  of  Paragraph  13.3 and shall not be  affected by reason of the negligence of or a claim of negligence against BKC.

      13.2  WORKERS  COMPENSATION,  ETC. Franchisee agrees to participate in any governmental  Worker's  Compensation  Program,  unemployment  insurance program, hospitalization  program and any other similar  program which may be required by the laws of the country where the Franchised Restaurant is located.

      13.3  INDEMNITY.  Franchisee is responsible  for all losses or damages and contractual  liabilities to third persons  arising out of or in connection  with possession,  ownership or operation of the  Franchised  Restaurant,  and for all claims or demands for  damages to  property  or for injury,  illness or death of persons directly or indirectly resulting therefrom. Franchisee agrees to defend, indemnify and save BKC, and its  subsidiaries,  affiliated and parent  companies harmless  of,  from  and  with  respect  to any such  claims,  demands,  losses, obligations,  costs, expenses,  liabilities,  debts or damages,  unless they are caused by the gross negligence of BKC itself BKC's right to indemnity under this Agreement  shall  arise and be valid  notwithstanding  that joint or  concurrent liability may be imposed on BKC by statute, ordinance,  regulation or other law. The  indemnification of BKC by Franchisee for Franchisee's own negligence,  acts or  omissions,  shall not be limited by the amount of insurance  required  under Paragraph 13.1, nor upon a claim that BKC is responsible for Franchisee's act or omissions or that Franchisee was acting in the capacity of an agent of BKC. This indemnity obligation shall include, but not be limited to, claims related to the employment of Franchisee's employees. This obligation of Franchisee to indemnify and  defend  BKC is  separate  and  distinct  from its  obligation  to  maintain insurance under the provisions of Paragraph 13.1.

            BKC shall notify  Franchisee of any claims,  and Franchisee shall be given the  opportunity to assume the defense of the matter,  however,  BKC shall have the right to  participate  in the defense of any claim or action against it which is assumed by  Franchisee,  at BKC's own cost and expense.  If  Franchisee fails to assume  the  defense,  BKC may defend the action in the manner it deems

                                      19

appropriate,  and Franchisee  shall pay to BKC all costs,  including  attorney's fees,  incurred by BKC in effecting  such defense,  in addition to any sum which BKC may pay by reason of any  settlement or judgment  against BKC. No settlement of any claim against BKC shall be made by  Franchisee  which is in excess of the amount of insurance  referred to in Paragraph 13.1 or which would subject BKC to liability in any amount not covered by such insurance  without the prior written consent of BKC. Any final judicial  determination of the negligence of BKC in an amount in excess of the policy limits of insurance required under Paragraph 13.1 shall be the responsibility of BKC.

14.   TAXES.

      14.1 PAYMENT WHEN DUE. The Franchisee  shall pay when due all taxes levied or assessed by reason of the Franchisee's possession,  ownership or operation of the Franchised Restaurant or items loaned to the Franchisee by BKC including any value added tax. In the event of any bona fide dispute as to the liability for a tax assessed  against it, the  Franchisee may contest the validity or the amount of the tax in accordance with the procedures of the taxing  authority,  however, the  Franchisee  shall not permit a tax sale or seizure  against the premises or





equipment.

      14.2  WITHHOLDING  TAXES.  lt is understood and agreed by the parties that any and all tax  liabilities  arising out of this  Agreement will be paid by the party owing such taxes.  ln the event that BKC incurs  withholding tax liability in the country in which the Franchised  Restaurant is located as a result of the franchise  fee  or the  royalty  payments  set  forth  above,  it  shall  be the responsibility  and obligation of the Franchisee to withhold from such franchise fee or royalty  payments  such  withholding  taxes as are  required by law.  The Franchisee  shall  provide BKC with  corresponding  receipts  from the  relevant taxing authorities to evidence such payments or amounts withheld. Taxes, such as income taxes of the Franchisee, which are based on profits from operation of the Franchised Restaurant are the sole responsibility of the Franchisee.

      14.3 ELECTION.  Where the law permits an election  regarding the treatment of any supply or deemed  supply  under this  Agreement  for the  purposes of any value added or other tax chargeable  thereon,  the Franchisee shall make or join in any such election as BKC may from time to time require.

15.   DISPOSAL.

      15.1  TRANSFER OF LNTEREST BY  FRANCHISEE.  Except with the prior  written consent of an authorized  officer of BKC,  Franchisee  shall not (a) directly or indirectly sell,  assign,  convey,  give away,  mortgage,  pledge,  hypothecate, charge,  or otherwise  transfer or encumber its rights or obligations under this Agreement,  or assign any of  Franchisee's  rights or delegate any of its duties hereunder;  (b) sell, issue,  offer,  transfer,  convey, give away, or otherwise

                                      20

grant or deliver any additional equity interests in the Franchisee, or (c) sell, assign,  transfer,  convey, or give away  substantially all of the assets of the Franchised Restaurant.

      15.2  TRANSFER OF INTEREST BY  PRINCIPALS.  Except with the prior  written consent  of an  authorized  officer  of BKC,  no  Principal  shall  directly  or indirectly sell,  assign,  convey,  give away,  mortgage,  pledge,  hypothecate, charge,  or  otherwise  transfer  or  encumber  any legal or  beneficial  equity interest in Franchisee.

      15.3  NOTICE OF PROPOSED  TRANSFER.  Any proposed  transferor shall notify BKC in writing of any proposed  transfer of an interest referred to in Paragraph 15.1 or 15.2, as applicable,  before the proposed transfer is to take place, and shall  provide  such  information  and  documentation  relating to the  proposed transfer as BKC may reasonably require.

      15.4  RIGHT OF FIRST REFUSAL.

            15.4.1 NOTICE;  EXERCISE OF OPTION.  In the event  Franchisee or the Principals  wish to accept a bona fide offer from a third party to purchase  all or substantially all of the assets constituting the Franchised  Restaurant or of the majority of the voting stock of the Franchisee,  the proposed  transferor(s) shall  give BKC  written  notice  setting  forth  the name  and  address  of the prospective  purchaser,  the  price  and  terms  of the  offer  together  with a franchisee  application  completed by the prospective  purchaser,  a copy of the Purchase and Sale Agreement,  executed by both the seller and purchaser, and all exhibits,  copies of any real estate purchase agreement or agreements,  proposed security agreements and related promissory notes, assignment documents,  and any other  information  that BKC may request in order to evaluate the offer.  BKC or its designee shall then have the prior option to purchase the interests  covered by the  offer  at the  price  and  upon the  same  terms  of the  offer.  If the consideration  is not money,  the purchase price shall be the cash equivalent of the fair market value of the consideration.  BKC shall have twenty (20) business days after receipt of the notice of offer and the  furnishing of all  reasonably requested  information  within  which to notify  Franchisee  or the  owners,  as applicable, of BKC's intent to exercise its right hereunder. Silence on the part of BKC shall constitute  rejection.  If BKC rejects the offer,  Franchisee shall have 90 days to sell the  Franchised  Restaurant  upon the terms offered to BKC, subject to the approval of BKC a s required below. If the proposed sale includes assets of  Franchisee  not related to the  operation of  franchised  Burger King Restaurants,  BKC may, at its option,  elect to purchase only the assets related to the operation of franchised Burger King Restaurants and an equitable purchase price shall be  allocated to each asset  included in the  proposed  sale. A bona fide offer from a third party  includes any  transfer,  conveyance,  assignment, consolidation,  merger or any other  transaction  in which  legal or  beneficial ownership of the franchise granted by this Agreement is vested in other than the Franchisee.

                                      21





            15.4.2 NO WAIVER.  The  election by BKC not to exercise its right of first  refusal as to any offer shall not affect its right of first refusal as to any subsequent offer.

            15.4.3  UNAUTHORIZED   TRANSFER  VOID.  Any  sale,  attempted  sale, assignment,  or other transfer of the interests described in Subparagraph 15.4.1 without  first giving BKC the right of first  refusal  described  above shall be void and of no force and effect,  and shall constitute an Event of Default under Paragraph 17.1(k).

            15.4.4 SALE; BKC CONSENT.  If BKC does not exercise its option under Subparagraph 15.4.1,  Franchisee may conclude the sale to the purchaser who made the offer  provided BKC's consent to the assignment or sale be first obtained as provided below.

      15.5 BKC CONSENT TO TRANSACTION.  BKC may impose reasonable  conditions on its consent to the transfers  contemplated in Subparagraphs 15.1 and 15.2 above. BKC is under no  obligation  to  consent  to the  encumbrances  contemplated  in Subparagraphs 15.1 and 15.2 above, and may deny its consent to such encumbrances in its sole discretion.

            15.5.1 TRANSFER OF SUBSTANTIALLY  ALL ASSETS OR TRANSFER OF STOCK BY PRINCIPAL.  Reasonable  conditions  in  connection  with (i) a  transfer  of the Franchisee's  rights under this Agreement,  the transfer of substantially all of the  Franchisee's  assets,  or the  delivery or grant of any  additional  equity securities, all pursuant to Subparagraph 15.1 above, or (ii) the transfer of the shares of the Franchisee  pursuant to  Subparagraph  15.2 above,  shall include, without limitation, each of the following:

                        (a)   All   of   the   Franchisee's   accrued   monetary obligations to BKC and its Affiliates must be paid at the time of the transfer;

                        (b)   The  Franchisee  must not be in default under this Agreement  or any  other  agreement  with BKC or its  Affiliates  at the time of transfer;

                        (c)   The transferee (and, if applicable,  all owners of the  transferee),  must  complete  BKC's  then  current  franchisee  application procedures  and meet all of BKC's then  current  criteria  for approval as a BKC franchisee, including financial, character, managerial, credit, operational, and legal standards;

                        (d)   The transferee (and, if applicable,  all owners of the transferee)  must at BKC's option enter into (i) a written  agreement,  in a form  acceptable to BKC,  assuming (or  guaranteeing)  full  performance  of all obligations of the Franchisee under this Agreement,  (ii) a substitute Franchise Agreement,  for a term ending on the expiration date of this Agreement, in BKC's

                                      22

then  current  form,  except  that  royalty  and  advertising   contribution  or expenditure  rates shall be the same as are provided for in this Agreement,  and (iii) such ancillary agreements as BKC may require;

                        (e)   The Franchisee (and, if applicable,  each owner of the Franchisee) must execute a general release,  in a form acceptable to BKC, of any and all claims against BKC, its Affiliates,  and their respective  officers, directors, agents, and employees;

                        (f)   The  transferee,  its Director of Operations,  and its  Restaurant  Manager  must  complete,   at  the  transferee's  expense,  any applicable  orientation  and  training  programs  required by BKC at the time of transfer;

                        (g)   BKC shall approve the terms and  conditions of the sale which affect the  sufficiency  of cash flow from the business after payment of debt service  necessary for  reinvestment  in the business for  refurnishing, maintaining, and remodeling the Location;

                        (h)   The transferor must pay the transfer fee set forth on SCHEDULE 1 in  consideration  of BKC's  expenses in  reviewing  the  proposed transfer;

                        (i)   The transferee must meet with  representatives  of BKC in Miami,  Dade County,  Florida,  U.S.A.,  or such other location as may be designated by BKC;

                        (j)   The   Franchisee   shall   execute  all  documents necessary to cancel the entries of the Franchisee as a registered user and shall cooperate  with BKC in effecting the  cancellation  of entries with the relevant registry of the Franchisee as a registered user.

                        (k)   The transferee shall, if BKC requests,  enter into one or more registered user agreements authorizing and permitting the use of the





Burger King Marks referred to in the agreements.

                        (l)   The  transferor  shall be  jointly  and  severally liable with the transferee (and, if applicable, each owner of the transferee) to BKC for future royalty and advertising  payments due under this Agreement if and so long as any part of the purchase money  consideration  remains owing from the transferee to the transferor.

      15.5.2 SECURITIES OFFERINGS.  Franchisee represents and agrees that:

                  15.5.2.1 COMPLIANCE WITH BKC REQUIREMENTS.  In connection with any future offerings of debt or equity  securities,  Franchisee will comply with all of BKC's then current  requirements with respect to such offerings.  Without limiting  the  foregoing,   in  addition  to  BKC's  then-current   requirements

                                      23

applicable to BKC's franchisees and their principals (or owners) generally,  the requirements  applicable to  Franchisee  will include the  following:  immediate written notice to BKC of any proposed  securities  offering (which notice in any event  shall  be no later  than  the time  when a  proposed  letter  of  intent, memorandum of  understanding  or similar  document is exchanged  with any person respecting  the  underwriting  or placement of  securities  of the  Franchisee); submission,  before or simultaneously with submission to the U.S. Securities and Exchange  Commission  (SEC),  (or  similar  governmental  agency  of any other jurisdiction in which securities are offered), of registration statements and/or prospectuses to BKC for review in connection with trademark usage,  inclusion of disclaimers, and otherwise; the execution by the principals and by underwriters, if any, of  certificates  required by BKC, and the execution of the  Franchisees and the Principals of an indemnity of BKC, its affiliates, agents, attorneys and employees against any liability arising from or in connection with the offering. Within ten (10) business  days after BKC's  receipt of a copy of a  registration statement  filed with the SEC and which BKC wishes to review,  BKC shall furnish the  Franchisee  with its  comments,  if any, on the  prospectus,  provided that failure of BKC to comment shall not relieve the Franchisee of its obligations to include in every  prospectus  such  disclaimers  as are  required by BKC.  BKC's then-current  general requirements for offerings of equity securities shall also apply to  offerings  of debt  securities  by the  Franchisee  unless  and  until separate  requirements  are  articulated  by BKC for debt and equity  securities offerings.

                        15.5.2.2   SUBMISSION   TO   BKC.    Franchisee    shall simultaneously file with BKC all reports and other documents that Franchisee may be required to file with the SEC pursuant to the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder,  or with, any governmental agency pursuant to the laws and  regulations of any other  jurisdiction in which securities are offered, as and when due.

                        15.5.2.3  REGISTRATION   RIGHTS:   SECONDARY  OFFERINGS. Franchisee  agrees  that it will not  grant  additional  registration  rights or modify any registration  rights previously  granted without prior written notice to BKC.  The  Franchisee  further  agrees  that if it is  required  to  effect a registration  pursuant to any registration rights previously  granted,  then, in connection  with  any  secondary   offering  of  securities   pursuant  to  such registration, it shall comply with BKC's then-current requirements, policies and procedures in connection with such offering and, without limiting the foregoing, shall  indemnify  BKC from  liability  arising  from or in  connection  with the Offering, in the same manner as would be required in connection with an offering of securities by the Franchisee.

                        15.5.2.4  BKC   EXPENSES.   The   Franchisee   must,  in connection  with any proposed  offering of  securities  requiring  the review or consent of BKC,  agree to pay BKC for  certain of BKC's  internal  and  external costs in connection with its review of the proposed securities offering.

                                      24

            15.5.3 CERTAIN  EXCEPTIONS.  Notwithstanding  any other provision of this  agreement,  the Franchisee  shall not be required to submit to BKC for its review and comment any S-3 or S-8 filing by the Franchisee with the SEC, and the Franchisee  shall not be required to obtain the prior written consent of BKC in connection with an issuance of securities  pursuant to an S-8 filing with the SEC so long as the  securities  issued  pursuant to such filing  represent,  per offering:  (i) through  December 31,  1998,  less than three (3%) percent of the





securities  of that class issued and  outstanding,  and (ii) after  December 31, 1998,  less than one percent  (1%) of the  securities  of that class  issued and outstanding.

      15.6  NO WAIVER. BKC's consent to a transfer shall not constitute a waiver of any claims it may have against the transferring party, nor shall it be deemed a waiver of BKC's right to demand exact compliance with any of the terms of this Agreement by the transferor or transferee.

      15.7  DEATH OR MENTAL  INCAPACITY  OF  PRINCIPAL.  If the  Principal  is a natural  person,  upon the  death  or  mental  incapacity  of a  Principal,  the executor,  administrator,  or personal  representative  of such Principal  shall transfer the Principal's interest in Franchisee to a third party approved by BKC within a  reasonable  time  after the  Principal's  death or mental  incapacity. Transfers by devise or inheritance  shall not be subject to BKC's right of first refusal under Paragraph 15.4 above,  but shall be subject to the same conditions imposed on any INTER  VIVOS  transfer  under  Paragraph  15.5  above.  All other transfers  shall be subject to BKC's right of first refusal under Paragraph 15.4 above, or if such right is not exercised,  the same conditions as may be imposed on any INTER VIVOS transfer under  Paragraph 15.5 above. In the case of transfer by devise or  inheritance,  if the heir is not approved or there is no heir, the executor shall use best efforts to transfer the Principal's  interest to another party approved by BKC within twelve (12) months from the date of the Principal's death.  If the conveyance of the Principal's  interest to a party  acceptable to BKC has not taken place within the twelve (12) month period,  BKC shall have the option, to purchase the Principal's interest at fair market value.

      15.8  CORPORATE DOCUMENTS.  The articles of incorporation,  the bylaws and each stock  certificate  of the  Franchisee  must at all times  provide that the issuance and transfer of shares in the  Franchisee  are  restricted  as provided above and may be done only in accordance  with the terms and  conditions of this Agreement.

      15.9  ASSIGNMENT  BY BKC.  BKC may assign this  Agreement to any person or company  which  acquires its Burger King  business in the territory in which the Franchised  Restaurant  is located or a  substantial  part  thereof,  whether by outright acquisition or by way of a master franchise agreement.

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16.   THE PRINCIPALS.

      16.1  STOCK OWNERSHIP.  The  Principals  represent and warrant to BKC that SCHEDULE 2 contains a complete  list of their  respective  shareholdings  in the Franchisee on the date of this Agreement and that, unless otherwise stated,  the Principals are the beneficial owners of their respective shares.

      16.2  COMPLIANCE  BY  PRINCIPALS.  Each  Principal  shall  comply with the covenants,  terms,  conditions  and  acknowledgments  contained in the following sections  as if it were the  party  named  therein  in place of the  Franchisee: Section 11 (Limitations of Franchise); Section 12 (Unfair Competition);  Section 15 (Disposal); and Section 18 (Restrictive Covenant).

            Notwithstanding  any other  provision of this  Agreement,  including without  Imitation  Sections 15.1 and 15.5, so long as  international  Fast Food Corporation,   (IFFC)  is  a  Principal  of  the  Franchisee,   BKC  will  not unreasonably  withhold its consent to the sale or issuance of additional  equity securities  in  IFFC  provided  that  IFFC  has  complied  with  all  reasonable conditions  then  established  by BKC in  connection  with the proposed  sale or issuance of equity securities by IFFC.

      16.3  GUARANTY. Each Principal  hereby agrees to jointly,  severally,  and unconditionally  guaranty the payment and performance of all debts,  obligations and liabilities of the Franchisee to BKC arising pursuant to this Agreement,  or any other  agreement with BKC relating  directly or indirectly to the Franchised Restaurant  (the  BKC  Agreements),  together  with all  costs of  collection, compromise or enforcement,  including reasonable  attorneys' fees, incurred with respect to any such debts, obligations or liabilities or with respect to this or any other guaranty thereof or any bankruptcy  proceeding or other similar action affecting  the  rights  of the  Franchisee's  creditors  generally  (all  of the foregoing being referred to collectively as the Obligations). This guaranty by the Principals  shall continue in full force and effect until the Franchisee has fully  paid  and  performed  all of the  Obligations.  In  connection  with  the guaranties set forth above (collectively, the Guaranties), each of the parties to this Agreement hereby agrees as follows:

            (a)  The  Guaranties  shall  not be  impaired  by any  modification, supplement,  extension  or  amendment  of  the  BKC  Agreements  or  any  of the Obligations, nor by any modification,  release or other alteration of any of the Obligations  hereby guaranteed,  nor by any agreements or arrangements  whatever with the Franchisee or any one else;

            (b)  The  liability  of  each  Principal  is  primary,   direct  and unconditional  and may be enforced without  requiring BKC first to resort to any other right, remedy or security;





                                      26

            (c) No  Principal  shall have any right of  subrogation,  repayment, reimbursement or indemnity whatsoever, unless and until the Obligations are paid or performed in full and all debts owed by the  Franchisee  to any Principal are hereby subordinated to the Obligations;

            (d) If any Principal  should at any time die, become  incapacitated, become insolvent or make a composition, trust mortgage or general assignment for the benefit of  creditors,  or if a bankruptcy  proceeding or any action under a similar  law  affecting  the  rights of  creditors  generally  shall be filed or commenced by, against o r in respect of any Principal,  any and all  obligations of that Principal  shall,  at BKC's option,  immediately  become due and payable without notice,

            (e) If any  payment  or  transfer  to BKC  which  has been  credited against any  Obligation,  is voided or  rescinded  or required to be returned by BKC,  whether or not in  connection  with any event or  proceeding  described in Section  16.3(d),  the  Guaranties  shall continue in effect or be reinstated as though such payment, transfer or recovery had not been made;

            (f) Except as  otherwise  provided  in this  Agreement,  each of the Guaranties  shall be  construed as an absolute,  unconditional,  continuing  and unlimited  obligation  of  each  Principal  without  regard  to the  regularity, validity or  enforceability  of any of the  Obligations,  and without  regard to whether any Obligation is limited,  modified,  voided, released or discharged in any proceeding under any law affecting the rights of creditors generally;

            (g) Any  termination of the Guaranties  shall be applicable  only to Obligations  accruing after the  termination or having their inception after the effective date of such termination and shall not affect Obligations having their inception prior to such date;

            (h) The death or  incapacity of any  Principal  hereunder  shall not result in the termination of the Guaranties;

            (i) Any and all  present  and future  debts and  obligations  of the Franchisee to any Principal hereunder are hereby waived an id postponed in favor of and subordinated to the full payment and performance of the Obligations; and

            (j) Each Principal  waives to the greatest extent  permitted by law: notice of acceptance  hereof;  presentment  and protest of any  instrument,  and notice  thereof;  notice  of  default;  notice  of  foreclosure;  notice  of any modification,  release or other  alteration of any of the  Obligations or of any security  therefor and all other notices to which any Principal  might otherwise be entitled.

                                      27

17.   DEFAULT AND EFFECTS OF TERMINATION.

      17.1.1  EVENTS OF DEFAULT BY  FRANCHISEE.  Franchisee  shall be in default under this  Agreement  upon the  occurrence  of any of the  following  events or conditions (individually, an Event of Default and collectively, the Events of Default):

                  (a) If the Franchisee fails to pay when due any amount owed to BKC under this Agreement, and does not cure such failure within ten (10) days of delivery of written notice of such failure.

                  (b)  If  the  Franchisee   fails  to  operate  the  Franchised Restaurant  in full  compliance  with the  terms of this  Agreement  and the MOD Manual   (including   without   limitation  the  provisions   regarding  product specifications,  cleanliness,  health, sanitation and the use of the Burger King Marks),  and does not cure such  failure  wh thin ten (10) days of  delivery  of written notice of such failure.

                  (c)  If  the  Franchisee  fails  to  maintain  the  Franchised Restaurant in  conformance  with the Current Image as required by Sections 5.3.1 and 5.3.2 hereof, or to remodel,  improve and alter the Franchised Restaurant as required in Section 5.3.3 hereof,  and does not cure such failure  within ninety (90) days of delivery of written notice of such failure.

                  (d) If the Franchisee  challenges the validity or ownership of





the Burger King Marks or BKC's ownership rights to the Burger King System.

                  (e)  If the  Franchisee  fails  to  continuously  operate  the Franchised Restaurant as required by Section 2.4 of this Agreement.

                  (f)  If  the  Franchisee  fails  to  continuously  occupy  the Location  throughout  the  term  of  this  Agreement,  unless  such  failure  is attributable to a proper exercise of governmental authority.

                  (g) If the Franchisee  should at any time become  insolvent or make a  composition,  trust  mortgage or general  assignment  for the benefit of creditors,  or if a bankruptcy proceeding,  receivership or any action under any similar  law  affecting  the  rights of  creditors  generally  shall be filed or commenced  by,  against or in respect of the  Franchisee  or any  portion of its property.

                  (h) If the Franchisee  makes any materially false statement in connection  with any report of Gross Sales or in any other  financial  statement required hereby, other than an obvious and unintentional error.

                  (i) If the  Franchisee  commits  persistent  breaches of the terms of this  Agreement  (whether or not material in  isolation)  after written

                                      28

notice of such breaches has been delivered by BKC, any three breaches  occurring within  a period  of six  months  shall  be  deemed  to  constitute  persistent breaches.

                  (j) If the  Franchisee  for any reason  other than an improper act or breach by BKC ceases to be entitled to remain  registered as a registered user of any of the Burger King Marks.

                  (k) If any  events  occur  which are  contrary  to  Section 15 hereof.

                  (l) If the  Franchisee  engages in  activities  prohibited  by Section  12  (Unfair  Competition)  or Section  18  (Restrictive  Covenant),  or discloses  any trade secrets of BKC in violation of Section 11  (Limitations  of Franchise).

                  (m) If the Franchisee or any of its affiliates is in breach of any other obligation owed to BKC or any of its Affiliates  whether under this or any other agreement.

                  (n) If the  Franchisee  has knowingly made false or misleading statements in order to obtain execution of this Agreement by BKC.

                  (o) If the  Franchisee  or any of its officers or directors is convicted of a criminal  offense  punishable by a term of imprisonment in excess of two (2) years.

                  (p) The Franchisee  fails to perform any obligation under this Agreement which is not capable of cure.

                  (q) If the  Franchisee  fails to perform any other  obligation under this  Agreement and does not cure such failure  within thirty (30) days of written notice of such failure.

                  (r)   If any of the above occurs in relation to any Principal.

            17.2.1  EVENT OF BKC  DEFAULT.  BKC shall be in  default  under this Agreement if BKC fails to perform any of its  obligations  under this  Agreement and does not cure such failure  within sixty (60) days of written notice of such failure (an Event of BKC Default).

      17.2  TERMINATION.  Upon  the  occurrence  of an Event  of  Default,  this Agreement  shall   automatically   terminate   without  any  further  notice  or opportunity  to cure under  Section  17.1.1 above and BKC shall,  subject to the provisions of Subsection 17.6 below,  have the right to claim lost royalties and advertising  contributions,  and shall also have all other  rights and  remedies available  under  applicable law. Upon the occurrence of an Event of BKC Default under Section  17.1.2.,  this Agreement shall  automatically  terminate  without further notice or  opportunity  to cure and the Franchisee  shall have all other

                                      29

rights and remedies available under applicable law. Subject to the provisions of Section  17.6 below,  the rights of the parties set forth in this  Section  17.2





shall be in addition to any other  rights the parties may have under  applicable law.

      17.3  EFFECT OF TERMINATION. Upon expiration or termination for any reason of this Agreement,  the Franchisee's  right to use the Burger King Marks and the Burger King System shall terminate. The Franchisee shall not thereafter identify itself as a Burger King  franchisee or former Burger King franchisee or use, any of BKC's trade secrets, operating procedures, promotional materials, Burger King Marks or any marks confusingly  similar.  The Franchisee will immediately return to BKC the MOD  Manual  loaned  to the  Franchisee  including  any  translations thereof, together with all other materials containing trade secrets,  restaurant operating instructions or business practices of BKC. Where applicable, BKC shall be entitled to take all steps  necessary for the  cancellation of the entries of the Franchisee with the Registrar of Trademarks, or its equivalent authority, as a  registered  user without  opposition  or  hindrance  of the  Franchisee.  The Franchisee will, at the request and cost of BKC, cooperate in any such steps.

      17.4  POST-TERMINATION  OPTION.  The  Franchisee  grants  to  BKC  or  its designee  upon  termination  or  expiration  of this  Agreement,  the  option to purchase all usable paper goods, containers and printed menus bearing any of the Burger  King  Marks or trade  names at the price paid by the  Franchisee  and to purchase the Franchisee's restaurant equipment, furniture, fixtures and signs at fair market value.

      17.5  POST-TERMINATION OBLIGATIONS OF FRANCHISEE.

            17.5.1 OPTIONS TO PURCHASE LOCATION.  Upon termination or expiration of this  Agreement,  if the  parties  do not enter  into a  successor  Franchise Agreement  whereby the Franchisee  shall continue to be a franchisee and operate the  Franchised  Restaurant at the Location,  BKC or its designee shall have the option subject to obtaining any necessary governmental consent:

                        (a)  To  purchase  the   Location   and/or  any  related equipment at fair market value, if the  Franchisee,  any of the Principals or an affiliate of the Franchisee owns the Location and/or related equipment.

                        (b) If the Location is leased by the Franchisee,  any of the  Principals  or an affiliate  of the  Franchisee,  subject to obtaining  any necessary  landlord's consent, to obtain an assignment of the leasehold interest at a price equal to the fair market value of the leasehold interest.

            17.5.2 DEIDENTIFICATION. If BKC or its designee do not exercise this option the  Franchisee  agrees to  immediately  make such removals or changes in

                                      30

signs and the building as BKC shall request so as to effectively distinguish the Location from its former appearance and from any other Burger King Restaurant.

            17.5.3 BKC LIEN.  To secure  payment of any  damages in the event of termination as a result of the Franchisee's  default,  BKC shall have a lien, on the personal property, machinery, fixtures and equipment owned by the Franchisee at the Location at the time of such default.

            17.5.4  ACCELERATION  OF PAYMENTS.  All monies owed by Franchisee to BKC shall be immediately due and payable upon term nation.

      17.6  DISPUTE RESOLUTION.

            (a) Subject to subparagraph (b) below, all  controversies,  disputes or claims arising between the Franchisee,  the Principals,  and their respective shareholders,  officers,  directors,  agents and employees (in their  respective capacity)  (collectively,  the  Franchisee  Parties) and BKC arising out of or related  to the  relationship  of the  parties  hereto,  this  Agreement  or any provision hereof, any related agreement  (including any development  agreement), the validity of this  Agreement or any provision  hereof or the operation of the Franchised  Restaurant  shall be submitted to and settled by  arbitration in the City of New York in  accordance  with the  Commercial  Arbitration  Rules of the American  Arbitration  Association  (AAA)  then  obtaining.  Such  arbitration proceedings  shall be  conducted  before a panel of three (3)  arbitrators.  The Franchisee Parties shall l appoint one arbitrator,  between them, BKC shall each appoint one  arbitrator  and the two  arbitrators  so appointed  shall appoint a third  arbitrator to act as Chair. If said two arbitrators  fail to nominate the Chair  within  thirty  (30)  days  from the date of  appointment  of the  second arbitrator  to be  appointed,  the Chair shall be appointed  by the AAA.  Unless otherwise  provided  in this  Paragraph,  all  matters  within  the scope of the Federal  Arbitration  Act of the United  States of America (9 U.S.C.  ss.ss.1 et seq.) shall be governed by it. The arbitrators  shall have the right to award or include in their award any relief  which they deem proper in the  circumstances, including  with out  limitation,  money damages (with interest on unpaid amounts from date due), specific  performance,  injunctive relief, legal fees and costs, provided that the arbitrators shall not award exemplary or punitive damages. The award and decision of the  arbitrators  shall be conclusive and binding upon the Franchisee  Parties  and BKC and  judgment  upon the award may be entered in any court  of  competent  jurisdiction.  The  Franchisee  Parties  and  BKC  further expressly  agree and consent to the  jurisdiction  of the courts of the State of New  York for the  purpose  of  entering  judgment  upon  any such  award of the





arbitrators.  The  Franchisee  Parties and BKC further  agree to be bound by the provisions  of any  applicable  limitation on the period of time in which claims must be brought under  applicable law or this Agreement,  whichever is less. The parties further agree that in connection with any such  arbitration  proceeding, they  shall  submit  or file any  claim  which  would  constitute  a  compulsory counterclaim  (as defined by Rule 13 of the United States Federal Rules of Civil

                                     31

Procedure) within the same proceeding as the claim to which it relates. Any such claim which is not submitted or filed as described  above shall be barred.  This provision   shall   continue  in  full  force  and  effect   subsequent  to  and notwithstanding expiration or termination of this Agreement.

            (b) Notwithstanding subparagraph (a) above, BKC shall be entitled to seek the entry of temporary or preliminary  injunctions,  restraining orders and orders of specific performance enforcing the provisions of this Agreement or any development  agreement  relating  to the use of BKC's  Marks or  proprietary  in formation by the Franchisee or any Principal upon the termination or expiration of  this  Agreement  or any  development  agreement.  The  Franchisee's  (or the Principal's)  only remedy if an injunction is so entered will be the dissolution of that  injunction,  if  warranted,  upon due  hearing,  all other claims being subject to arbitration under subparagraph (a) above.

18.  RESTRICTIVE  COVENANT.  Neither the  Principals  nor the  Franchisee  shall directly or indirectly  (through  stock  ownership,  partnership,  trust,  joint venture,  management  contract,  or otherwise)  (a) have any interest in another Fast Food Hamburger Restaurant during the term of this Agreement, or (b) for a period of one ye ar after termination or expiration of this Agreement,  have any interest in another Fast Food  Hamburger  Restaurant  business at or within such distance of the Location as is stated  SCHEDULE 1. For purposes of this Section, Fast  Food  Hamburger  Restaurant  shall  mean any  restaurant  which  (a) has hamburgers or hamburger based products which account for 50(degree)/o or more of total menu items or total Gross Sales,  and (b) does not offer table  service as the principal method of ordering or food delivery

19.   MISCELLANEOUS: GENERAL CONDITION.

      19.1  INTERPRETATION.  The Introduction shall be considered a part of this Agreement. Paragraph headings are used only for convenience and do not form part of this Agreement.  A covenant on the part of the Franchisee not to do something includes  a  covenant  not to  permit  others to do it;  any right  given to BKC includes  the  right  to do  it  through  servants  or  agents  or  third  party contractors or to do it in conjunction with its servants,  agents or third party contractors  and includes any necessary  rights of access.  To the extent of any inconsistency,  this Agreement  prevails over the MOD Manual.  References to the parties shall include their heirs, successors in title and assigns.

      19.2  NON-WAIVER. The failure of BKC to exercise any right or option given to it hereunder,  or to insist upon strict  compliance by the  Franchisee or the Principals or any person  comprising the  Franchisee or the Principals  with the terms  of this  Agreement,  shall  not  constitute  a  waiver  of any  terms  or conditions of this Agreement with respect to any other or subsequent breach, nor a waiver by BKC of its right at any time  thereafter to require exact and strict compliance  with all the terms of this  Agreement.  The rights or  remedies  set forth in this  Agreement  are in addition to any other rights or remedies  which may be granted by law.

                                      32

      19.3  GOVERNING  LAW/JURISDICTION.  This Agreement shall become valid when executed  and  accepted  by BKC in  Miami,  Florida;  it shall be  governed  and construed under and in accordance with the laws of the State of Florida; U.S.A.; provided,  however,  that since the Franchisee is a corporation formed under the laws of the  Republic  of  Poland  which is not doing  business  in the State of Florida, the Florida Franchise Act, Florida Statutes Section 817.416(1971) shall not apply to this Agreement.  The parties hereto  acknowledge and agree that all disputes  arising in connection  with this  Agreement  shall be finally  settled pursuant to the provisions set forth in Section 17.6 of this Agreement. However, in the event that Section  17.6(b) of this  Agreement  applies,  then the United States  District  Court for the Southern  District of New York or, if such court lacks  jurisdiction,  the Supreme Court for the State of New York, County of New York,  shall be the venue and exclusive forum in which to adjudicate any case or controversy  arising under said Section  17.6(b),  and the parties further agree that in the event of any such litigation in these courts,  they will not contest or challenge the jurisdiction or venue of these courts.





      19.4  LICENSES, PERMITS, ETC. The Franchisee shall obtain and maintain all licenses and other permits required by the law of the governing bodies where the Franchised  Restaurant  is located and shall comply with all local  governmental requirements  relating  to the  construction,  equipping  and  operation  of the building and the preparation and sale of items in the Franchised Restaurant.

      19.5  COMPLIANCE  WITH  LAWS.   Notwithstanding  anything  herein  to  the contrary,  the Franchisee  shall operate the  Franchised  Restaurant in a lawful manner and faithfully comply with the applicable laws, regulations or legitimate administrative  requirements  of national,  regional,  and  municipal  governing bodies or other  political  subdivisions  in which the Franchised  Restaurant is located.

      19.6  REMEDIES. If the Franchisee  breaches this  Agreement,  BKC shall be entitled  to  injunctive  relief in addition  to all other  rights and  remedies available under Section 17.2 of this Agreement.

      19.7  SEVERABILITY.  The  parties  agree  that if any  provisions  of this Agreement may be construed in two ways,  one of which would render the provision illegal or  otherwise  voidable or  unenforceable,  and the other of which would render  the  provision  valid and  enforceable,  such  provision  shall have the meaning which renders it valid and  enforceable.  The language of all provisions of this  Agreement  shall be  construed  according  to its fair  meaning and not strictly  against any party. It is the intent of the parties that the provisions of this  Agreement  be enforced  to the  fullest  extent and should any court or other public agency  determine that any provision  herein is not  enforceable as written  in  this  Agreement,  the  provision  shall  be  amended  so that it is enforceable to the fullest extent permissible under the laws and public policies of the  jurisdiction in which the enforcement is sought.  The provisions of this Agreement are severable and this Agreement  shall be interpreted and enforced as

                                      33

if all completely invalid or unenforceable  provisions were not contained in the Agreement,  and partially valid and enforceable  provisions shall be enforced to the extent that they are valid and enforceable.

      19.8  NOTICES.

            19.8.1 NOTICE TO BKC. All notices to BKC shall be written in English and shall be sent by  facsimile  and hand  delivered  in person or by courier or sent by registered airmail, postage fully prepaid, addressed to BKC at 17777 Old Cutler Road, Miami, Florida 33157, U.S.A., Attention: General Counsel, Facsimile number (305)  378-7230,  or at such other address as BKC shall from time to time designate in writing.

            19.8.2   NOTICE  TO   FRANCHISEE/PRINCIPALS.   All  notices  to  the Franchisee  or the  Principals  shall be written in English and shall be sent by facsimile  and hand  delivered  in person  or by  courier,  or sent by  airmail, postage  fully  prepaid,  and shall be  addressed to the  Franchisee  and/or the Principals at the Franchised Restaurant premises, or the Franchisee's last known mailing address if the Franchised Restaurant has ceased operations,  with a copy delivered to the  Principal's  address (but only so long as  International  Fast Food Corporation is the sole Principal).

            19.8.3  DELIVERY.  Notices  which  are sent by mail  shall be deemed delivered  on the earlier of actual  receipt or the tenth (10th) day after being deposited  in the mail.  Notices  sent by hand  shall be deemed  delivered  upon actual receipt.

      19.9  LANGUAGE.  This  Agreement is in the English  language  only,  which language shall be controlling in all respects.

      19.10 MODIFICATION.  This  Agreement  may only be modified or amended by a written document signed by the parties.

      19.11 BINDING  EFFECT.  This Agreement  shall be binding upon the parties, their heirs, executors, personal representatives, successors or assigns.

      19.12 CURRENCY. Unless otherwise provided all payments required under this Agreement shall be made in United States currency in the U.S.A.

      19.13  SURVIVAL.   Any  provisions  of  this  Agreement  which  impose  an obligation  after  termination or expiration of this Agreement shall survive the termination or expiration of this Agreement and remain binding on the parties.

      19.14 AGENCY.  BKC shall be entitled to entrust the  performance of any of its obligations under this Agreement to an Affiliate, and any notice required to be given by BKC shall be validly given if given by an Affiliate.

                                      34





20. ENTIRE  AGREEMENT.  This Agreement  together with any formal  Development or Target Reservation Agreement constitutes the entire agreement of the parties and supersedes all prior negotiations, commitments, representations, warranties, and undertaking  of the parties (if any) with respect to the subject  matter of this Agreement  and to the  Franchised  Restaurant.  No term or  condition  shall  be implied  into  this  Agreement  in  derogation  of,  or  in a  manner  which  is inconsistent with or alters, the express terms set forth in this Agreement.

21. INDEPENDENT ADVICE. THE FRANCHISEE AND EACH PRINCIPAL  ACKNOWLEDGE THAT THEY HAVE BEEN ADVISED BY BKC OR ITS AGENTS TO TAKE INDEPENDENT  PROFESSIONAL  ADVICE ON ALL ASPECTS OF THIS AGREEMENT AND THE BURGER KING BUSINESS AND THAT THEY HAVE TAKEN SUCH  INDEPENDENT  ADVICE AS THEY DEEM  NECESSARY  AND HAVE  INDEPENDENTLY SATISFIED  THEMSELVES ON ALL RELEVANT MATTERS RELATING TO THIS AGREEMENT AND THE OPERATION OF BURGER KING RESTAURANTS BEFORE ENTERING INTO THIS AGREEMENT.

      The parties have executed this  Agreement as of the date indicated on page one.

                                          BURGER KING CORPORATION

                                          By:   /S/ Mark Gerasi                                               ----------------------------------                                                                 Vice President

                                          Attest:

                                               /S/ Kim A. Goodhard                                               ----------------------------------                                                           Assistant Secretary

                                                (Corporate Seal)

                                          INTERNATIONAL FAST FOOD                                           POLSKA SP ZO.O (the Franchisee)

                                          By:  /S/ Mitchell Rubinson                                               ----------------------------------                                           Name:  Mitchell Rubinson                                                 --------------------------------                                           Position:   President                                                     ----------------------------

                                      35

                                          THE PRINCIPAL:

                                          INTERNATIONAL FAST FOOD                                           CORPORATION

                                            By:  /S/ Mitchell Rubinson                                               ----------------------------------                                           Name:  Mitchell Rubinson                                                 --------------------------------                                           Position:   President                                                     ----------------------------





                                      36

                        SCHEDULE 1 TO FRANCHISE AGREEMENT                         ---------------------------------

The Franchisee:                         INTERNATIONAL FAST FOOD POLSKA SP ZO.0

The Principals:                         INTERNATIONAL FAST FOOD CORPORATION

The Location:                         means all the land, and  any buildings                                         from time to  time  thereon,  known as

                                        --------------------------------------                                         __________________________  and   more                                         particularly   delineated  in the plan                                         attached   to  the  Franchisee's  real                                         estate  package  as  finally  approved                                         by BKC.

Director of Operations (name):          ______________________________________

Managing Director (name):               ______________________________________

Initial Franchise Fee:                  U.S. $______________________

Royalty percentage:                        5%                                         ------- Advertising percentage:                    6%                                         ------- Term:                                   __________ (____) years

Hours of Operation:                     11:00 a.m. to 11:00 p.m. daily

Transfer payment fee:                   U.S. $10,000                                         ----------------  Radius of restrictive covenant:         Two Kilometers                                         ---------------- Governing Law:                          State of New York,  U.S.A.                                         --------------------------

                                       37

                       SCHEDULE 2 TO FRANCHISE AGREEMENT

Shares of the Franchisee owned by the Principals:

================================================================================                  |   Number of  |  Class of |   % of Class of |   % of Total     Principal    |    Shares    |   Shares  |      Shares     |     Shares - -----------------|--------------|-----------|-----------------|----------------- International    |              |           |                 | Fast Food        |              |           |                 |      80% Corporation      |              |           |                 | - -----------------|--------------|-----------|-----------------|-----------------                  |              |           |                 |





                 |              |           |                 | - -----------------|--------------|-----------|-----------------|-----------------                  |              |           |                 |                  |              |           |                 | ================================================================================

                                      38

                      EXHIBIT A TO FRANCHISE AGREEMENT

                               POLAND TRADEMARKS                                -----------------

Marks registered in Poland:

                                                               Date of                               Classes           Reg. No.    Registration                               -------           --------    ------------

Burger King Logo              16,29,30,32,42    7441        18 Feb., 1994

Whopper                       16,29,30,32,42    7441        18 Feb., 1994

Burger King Wordmark          16,29,30,42       7442        18 Feb., 1994

                                     39 
Question: Highlight the parts (if any) of this contract related to Covenant Not To Sue that should be reviewed by a lawyer. Details: Is a party restricted from contesting the validity of the counterparty’s ownership of intellectual property or otherwise bringing a claim against the counterparty for matters unrelated to the contract?
Student:
The Franchisee  will not directly or indirectly,  at any time during the term of this Agreement or thereafter,  do or cause to be done any act or thing  disputing,  attacking or in any way impairing the validity of and BKC's right,  title or interest in the Burger King Marks and the Burger King System.