Exhibit 10.7
FORM OF
GLORIA JEAN'S
FRANCHISE AGREEMENT
UNIT NO.:
DATE:
FRANCHISEE:
TABLE OF CONTENTS
1.
BUSINESS BACKGROUND AND PRELIMINARY AGREEMENTS
2.
GRANT AND RENEWAL OF FRANCHISE
A.
GRANT OF FRANCHISE
B.
NON-EXCLUSIVITY
C.
RIGHT OF FIRST OPPORTUNITY
D.
TERM
E.
RENEWAL OF FRANCHISE
F.
MANNER OF RENEWAL
3.
DEVELOPMENT AND OPENING OF STORE
A.
LEASE OR SUBLEASE OF PREMISES OF STORE
B.
DEVELOPMENT OF THE STORE
C.
FIXTURES, EQUIPMENT, STOREFRONT, SUPPLIES AND SIGNS
D.
STORE OPENING
E.
TERMINATION UPON FAILURE OF FRANCHISEE TO OPEN THE STORE
F.
GRAND OPENING PROGRAM
4.
TRAINING AND OPERATING ASSISTANCE
A.
TRAINING
B.
HIRING AND TRAINING OF EMPLOYEES BY FRANCHISEE
C.
OPERATING ASSISTANCE
5.
OPERATING MANUAL
6.
STORE IMAGE AND OPERATING STANDARD
A.
CONDITION AND APPEARANCE OF STORE
B.
ALTERATIONS TO THE STORE
C.
REFURBISHING THE STORE
D.
AUTHORIZED PRODUCTS
E.
APPROVED BRANDS AND/OR SUPPLIES
F.
SUPPLIERS OF COFFEE
G.
USE OF SUPPLIES IMPRINTED WITH NAMES AND MARKS
H.
STANDARDS OF SERVICE
I.
DETERIORATED PRODUCTS AND COMPLAINTS
J.
SPECIFICATIONS, STANDARDS AND PROCEDURES
K.
COMPLIANCE WITH LAWS AND GOOD BUSINESS PRACTICES
L.
MANAGEMENT OF THE STORE
M.
CONFLICTING AND COMPETING INTERESTS
N.
INSURANCE
7.
PROPRIETARY AND CONFIDENTIAL INFORMATION OF FRANCHISOR
8.
ADVERTISING AND PROMOTION
A.
BY FRANCHISOR
i
B.
MARKETING FUND
C.
BY FRANCHISEE
D.
WEBSITE
9.
REPORTS, BOOKS AND RECORDS, INSPECTIONS
A.
GENERAL REPORTING
B.
INSPECTIONS
C.
AUDITS
10.
NAMES AND MARKS
A.
OWNERSHIP OF NAMES AND MARKS
B.
LIMITATIONS ON FRANCHISEE'S USE OF NAMES AND MARKS
C.
NOTIFICATION OF INFRINGEMENTS AND CLAIMS
D.
DISCONTINUANCE OF USE OF NAME AND/OR MARKS
E.
INDEMNIFICATION OF THE FRANCHISEE.
11.
INITIAL FRANCHISE FEE
12.
ROYALTY FEE
A.
AMOUNT OF ROYALTY FEE
B.
DEFINITION OF "GROSS SALES"
C.
PAYMENT OF ROYALTY FEE AND MARKETING FUND CONTRIBUTION
D.
INTEREST ON LATE PAYMENTS AND LATE FEES
13.
TERMINATION OF FRANCHISE
A.
TERMINATION BY FRANCHISEE
B.
BY FRANCHISOR
C.
RIGHT OF FRANCHISOR TO DISCONTINUE PRODUCTS TO FRANCHISEE AFTER NOTICE OF
DEFAULT TO FRANCHISEE
D.
CROSS-DEFAULTS, NON-EXCLUSIVE REMEDIES, ETC.
14.
FRANCHISEE'S OBLIGATION UPON TERMINATION OR EXPIRATION
A.
PAYMENT OF AMOUNTS OWED TO FRANCHISOR
B.
RETURN OF MANUALS.
C.
CANCELLATION OF ASSUMED NAMES AND TRANSFER OF PHONE NUMBERS.
D.
FRANCHISOR HAS RIGHT TO PURCHASE STORE.
E.
COVENANT NOT TO COMPETE
F.
CONTINUING OBLIGATIONS
15.
ASSIGNMENT, TRANSFER AND ENCUMBRANCE
A.
BY FRANCHISOR
B.
FRANCHISEE MAY NOT ASSIGN WITHOUT APPROVAL OF FRANCHISOR
C.
ASSIGNMENT TO PARTNERSHIP, LIMITED LIABILITY COMPANY OR CORPORATION
D.
FRANCHISOR'S RIGHT OF FIRST REFUSAL
E.
DEATH OR PERMANENT DISABILITY OF FRANCHISEE
F.
RELEASE, EFFECT OF TRANSFER
ii
16.
DISPUTE RESOLUTION
A.
MEDIATION
B.
ARBITRATION
C.
WAIVER OF PUNITIVE DAMAGES AND JURY TRIAL.
D.
LIMITATION OF CLAIMS.
E.
CONSENT TO JURISDICTION.
F.
SURVIVAL AND CONSTRUCTION
G.
COSTS AND ATTORNEYS' FEES
H.
INJUNCTIVE RELIEF
I.
BINDING EFFECT, MODIFICATION AND REPRESENTATIONS
17.
CONSTRUCTION, ETC
18.
NON-RETENTION OF FUNDS
19.
SEVERABILITY; SUBSTITUTION OF VALID PROVISIONS
20.
WAIVERS
21.
CHOICE OF LAWS
22.
ENTIRE AGREEMENT
23.
INDEPENDENT CONTRACTORS AND INDEMNIFICATION
24.
NOTICES
25.
EFFECTIVE DATE OF AGREEMENT
26.
ACKNOWLEDGMENTS
iii
GLORIA JEAN'S®
FRANCHISE