KRISPY KREME DOUGHNUT CORPORATION
DEVELOPMENT AGREEMENT
BASIC TERMS A.
Effective Date
(Insert date Franchisee executes the
agreement):
B.
Franchisor:
Krispy Kreme Doughnut Corporation, a North
Carolina
Corporation
C.
Franchisee:
Franchisee's Address:
Telephone:
Fax No.:
E-mail Address:
D.
Principal Owners:
E.
Managing Director:
F.
Development Area (See Exhibit A for
more detailed description):
G.
Development Schedule Totals (See
Cumulative Number of End of Development Period
Exhibit A for specific
requirements):
Franchises
H.
Development Fee*:
I.
Initial Franchise
Fee**:
Factory Store: $50,000
Fresh Shop/Kiosk: $20,000
Hot Shop:
$30,000
Commissary Facility: $ 0
Franchisor:
(initials) Franchisee:
(initials)
____________________
* The Development Fee is equal to 50% of the Initial Franchise Fees for all
Stores to be opened pursuant to the Development Schedule.
** Subject to a dollar-for-dollar credit equal to the amount of the Development
Fee attributable to the particular Store; the Development Fee will be attributed
only to the Stores for which it is paid and may not be used as a credit for any
other Stores.
TABLE OF CONTENTS 1. BACKGROUND
1 2. DEFINITIONS
1 3. ACKNOWLEDGMENTS,
REPRESENTATIONS, AND WARRANTIES 5 4. TERM/ FEES /DEVELOPMENT SCHEDULE 6 5.
BUSINESS PLANS AND MANAGEMENT 7 6. GRANT OF FRANCHISES 7 7. FRANCHISOR'S RIGHTS
AND LIMITATIONS/EXCLUSIVITY 9 8. MARKS / COPYRIGHTS / CONFIDENTIAL INFORMATION
10 9. TRANSFERS 10 10. TERMINATION OF DEVELOPMENT RIGHTS 13 11. EFFECT OF
TERMINATION AND EXPIRATION 14 12. RELATIONSHIP OF PARTIES/INDEMNIFICATION 15 13.
MISCELLANEOUS
16 14.
ACKNOWLEDGMENTS 18
EXHIBIT A DEVELOPMENT AREA AND
DEVELOPMENT SCHEDULE EXHIBIT A-1
MAP OF DEVELOPMENT AREA EXHIBIT B
FRANCHISEE INFORMATION EXHIBIT C FORM OF FRANCHISE AGREEMENT EXHIBIT D FORM OF
COMMISSARY FACILITY AGREEMENT EXHIBIT E PRINCIPAL OWNERS' PERSONAL GUARANTY
EXHIBIT F INVESTOR PERSONAL COVENANTS
i
KRISPY KREME DOUGHNUT CORPORATION
DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT (this "Agreement") is made and entered into as
of the Effective Date by and between Franchisor and Franchisee.
1. BACKGROUND
1.1
Franchisor has developed, as a result of considerable
time, skill, effort, and money, a distinctive system for operating stores called
"Krispy Kreme Stores" that offer and serve a variety of doughnuts, beverages,
and other authorized products and services under the Marks.
1.2 Franchisor's
Affiliate, HDN Development Corporation, owns the Marks and has granted
Franchisor the right to sublicense the Marks to its franchisees for their use in
operating Krispy Kreme Stores and Commissary Facilities.
1.3 Franchisor grants
franchises to own and operate Krispy Kreme Stores and Commissary Facilities to
Persons who meet its qualifications and are willing to undertake the investment
and effort to properly develop and operate them.
1.4 Franchisee has submitted
a Franchise Application to develop multiple Krispy Kreme Stores and Commissary
Facilities in the Development Area, and Franchisor has accepted the application
in reliance on all information Franchisee has provided in connection therewith.
1.5 Pursuant to the terms of this Agreement, Franchisor grants Franchisee the
right to develop Krispy Kreme Stores and Commissary Facilities within the
Development Area. The operation of each Krispy Kreme Store and Commissary
Facility will be governed by a separate Franchise