Document:

<PAGE>

                                                                   EXHIBIT 10.46

                                                                   Master - Base
                                                                           (SCC)
                                                                Revised 10/26/99

                             SEATTLE'S BEST COFFEE
                             DEVELOPMENT AGREEMENT
                                  (Exclusive)

                                    Between

                          SEATTLE'S BEST COFFEE, LLC.

                                      and

                        _______________________________

                                         Dev. Agr. No.:________
                                         No. Options:__________
                                         Date:_________________

                                        [_]Exclusive     [_] Non-Exclusive
<PAGE>

                         SEATTLE'S BEST COFFEE, LLC.

<TABLE>
<CAPTION>
                            SEATTLE'S BEST COFFEE
                            DEVELOPMENT AGREEMENT

                              TABLE OF CONTENTS
<S>                                                                      <C>
I.     DEFINITIONS.....................................................    2

II.    GRANT...........................................................    2

III.   DEVELOPMENT FEE.................................................    3

IV.    DEVELOPMENT SCHEDULE............................................    3

V.     DEVELOPMENT PROCEDURES..........................................    4

VIV.   DEFAULT AND TERMINATION.........................................   10

VII.   TRANSFERABILITY OF INTEREST.....................................   10

VIII.  CONFIDENTIAL INFORMATION........................................   14

IX.    COVENANTS.......................................................   14

X.     NOTICES.........................................................   15

XI.    NON-WAIVER......................................................   16

XII.   INDEPENDENT CONTRACTOR AND INDEMNIFICATION......................   16

XIII.  APPROVALS.......................................................   17

XIV.   ACKNOWLEDGMENT..................................................   17

XV.    SEVERABILITY AND CONSTRUCTION...................................   17

XVI.   ENTIRE AGREEMENT AND APPLICABLE LAW.............................   18
</TABLE>

EXHIBIT A - DEVELOPMENT SCHEDULE

EXHIBIT B - TERRITORY

EXHIBIT C - FRANCHISE AGREEMENT
<PAGE>

                                                                   EXHIBIT 10.46

                          SEATTLE'S BEST COFFEE, LLC.

                             SEATTLE'S BEST COFFEE
                             DEVELOPMENT AGREEMENT

          THIS AGREEMENT (the "Agreement"), made this ______ day of
__________________________, 20___, by and between SEATTLE'S BEST COFFEE, LLC., a
Washington limited liability company, with its principal place of business at
1321 Second Avenue, Suite 200, Seattle, Washington 98101, U.S.A. ("Franchisor")
and ________________________________________________ ("Developer").

                                  WITNESSETH:

          WHEREAS, Franchisor has developed and owns a unique and distinctive
system for the development, establishment and operation of retail Cafes {"SBC
Cafes") and Kiosks ("SBC Kiosks") ( collectively, "SBC Units" or "SBC Retail
Units") that feature proprietary Seattle's Best Coffee Brand specialty coffee,
coffee products and other menu items developed and owned by Franchisor; (the
"SEATTLE'S BEST COFFEE System", "SBC System" or "System").

          WHEREAS, the distinguishing characteristics of the SBC System include,
without limitation, the name "SEATTLE'S BEST COFFEE"; distinctive interior and
exterior design and layouts, decor, color schemes, and furnishings; confidential
food formulae and recipes used in the preparation of food products, formulas and
specifications for preparing specialty coffee drinks and other coffee and non-
coffee based products; specialized menus; standards and specifications for
equipment, equipment layouts, products, operating procedures, and management
programs, all of which may be changed, improved, and further developed by
Franchisor from time to time;

          WHEREAS, Franchisor identifies the SBC System by means of certain
trade names, service marks, trademarks, logos, emblems, and other indicia of
origin, including, but not limited to, the marks "SEATTLE'S BEST COFFEE", "SBC"
and such other trade names, service marks, trademarks and trade dress as are
now, or may hereafter, be designated by Franchisor for use in connection with
the SBC System (collectively referred to as the "Proprietary Marks");

          WHEREAS, Franchisor continues to develop, use, and control the use of
such Proprietary Marks in order to identify for the public the source of
services and products marketed thereunder in the SBC System and to represent the
SBC System's high standards of quality, appearance, and service;
<PAGE>

          WHEREAS, Developer wishes to be assisted, trained and licensed by
Franchisor as a developer and franchisee of SBC Retail Units, and licensed to
use, in connection therewith, the SBC System;

          WHEREAS, Developer understands the importance of the SBC System and
SBC's high and uniform standards of quality, cleanliness, appearance, and
service, and the necessity of opening and operating Developer's SBC Retail Units
in conformity with the SBC System; and

          WHEREAS, Developer wishes to obtain the right to develop SBC Retail
Units ("Franchised Units") in the area described in this Agreement and to use
the SBC System in connection with those Franchised Units;

          NOW, THEREFORE, the parties hereto agree as follows:

I.   DEFINITIONS

     1.01. For the purposes of this Agreement, the following terms shall be
deemed to have the definitions set forth below:

           1.  "SBC Cafe" shall mean a free-standing or in-line SBC Retail Unit
               incorporating the full SBC Cafe design and trade-dress and
               offering the full SBC Cafe menu with dedicated seating for
               customers;

           2.  "SBC Kiosk" shall mean a self-contained SBC Retail Unit,
               incorporating less than the full SBC Cafe design and trade-dress,
               with no dedicated seating for customers (i.e. , food court,
               kiosk, etc.).

II.  GRANT

     2.01. Franchisor hereby grants the Developer, subject to the terms and
conditions of this Development Agreement and as long as Developer shall not be
in default of this Agreement or any other development, franchise or other
agreement between Developer and Franchisor, development rights to obtain
franchises to establish and operate ________ SBC Retail Units, and to use the
SBC System solely in connection therewith, at specific locations to be
designated in separate franchise agreements ("Franchise Agreements"), executed
as provided in Section 4.01 hereof, and pursuant to the schedule set forth in
Exhibit A to this Agreement ("Development Schedule"). Developer must have a
---------
minimum of two (2) SBC Cafes open and in operation in the Territory before
developing any SBC Kiosks in the Territory. At no time during the term of this
Development Agreement shall the total number of SBC Kiosks exceed 33.33% of the
total number of Franchised Units owned and/or operated by Developer in the
Territory. Each Franchised Unit developed pursuant hereto shall be located in
the area described in Exhibit B hereto "(Development Area").
                      ---------

                                       2
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     2.02.  Subject to the terms and conditions herein, Franchisor shall neither
establish nor license anyone other than Developer to establish an SBC Retail
Unit in the Development Area until sixty (60) days after the commencement of
operations of the final Franchised Unit under this Agreement, without
Developer's prior written consent. Notwithstanding the foregoing, nothing in
this Agreement shall be deemed in any way to limit Franchisor's right to sell
SBC coffee and related coffee products anywhere in the Territory or elsewhere,
including, but not limited to, sales on the Internet, by mail order, or through
wholesale distribution channels, including, but not limited to independent
coffee retailers, department stores, food marts, and grocery stores, during and
after the term of this Agreement (hereinafter "Wholesale Accounts"). Wholesale
Accounts of Franchisor may, in turn, sell SBC coffee and related SBC products in
the Territory or elsewhere under the same or different trademarks.

     2.03.  Each Franchised Unit for which a development right is granted
hereunder shall be established and operated pursuant to a Franchise Agreement to
be entered into between Developer and Franchisor in accordance with Section 3.01
hereof.

     2.04.  This Agreement is not a franchise agreement, and does not grant the
Developer any right to use Franchisor's Proprietary Marks or the SBC System, but
merely sets forth the terms and conditions under which Developer will be
entitled to obtain a franchise agreement.

     2.05.  Developer shall have no right under this Agreement to license others
under the Proprietary Marks or to use the SBC System.

III. DEVELOPMENT FEE

     3.01.  In consideration of the development rights granted herein, Developer
has paid to the Franchisor upon execution of this Agreement a non-refundable
development fee ("Development Fee") of __________________________________
Dollars ($_____________) which Development Fee shall be fully earned by
Franchisor upon execution of this Development Agreement for administrative and
other expenses incurred by Franchisor and for the development opportunities lost
or deferred as a result of the rights granted Developer herein. Developer shall
execute a separate Franchise Agreement for each Franchised Unit which Developer
opens pursuant to this Development Agreement, and shall pay the Franchise Fees
set forth in Section 3.02 below in connection therewith. The Development Fee
shall be non-refundable. Provided Developer is not otherwise in default under
the terms of this Development Agreement and/or any other agreement between
Developer and Franchisor, Developer shall receive a credit in the amount of Ten
Thousand Dollars and NO/CENTS ($10,000.00) towards the Franchise Fee payable
under the Franchise Agreement for the first Franchised Unit developed hereunder
and Five Thousand Dollars ($5,000.00) for each additional Franchised Unit
developed hereunder until the total amount of the credits equals the Development
Fee paid by Developer hereunder. In no event shall the total amount of such
credits exceed the Development Fee paid by Developer to Franchisor hereunder.

                                       3
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     3.02   In consideration of the establishment of each Franchised Unit to be
developed hereunder and the assistance and services which will be received by
Developer under the franchise agreements, Developer shall pay to Franchisor a
non-refundable franchise fee as follows:

     A.     Thirty Thousand Dollars (U.S. $30,000) for the first SBC Cafe
            developed hereunder, payable no later than execution of the
            franchise agreement for such SBC Cafe, as described in Section IV
            hereof, and

     B.     Twenty Thousand U.S. Dollars (U.S. $20,000) for each additional SBC
            Cafe to be developed hereunder, payable no later than execution of
            the franchise agreement for each such SBC Cafe, as described in
            Section IV hereof.

     C.     Fifteen Thousand U.S. Dollars (U.S. $15,000) for each SBC Kiosk to
            be developed hereunder, payable no later than execution of the
            franchise agreement for each such SBC Kiosk, as described in Section
            IV hereof. Notwithstanding anything to the contrary set forth
            herein, in the event the first Franchised Unit developed hereunder
            is an SBC Kiosk, the Franchise Fee for such Kiosk shall be Twenty
            Thousand Dollars and No/100 ($20,000) payable upon execution of the
            franchise agreement for such SBC Kiosk, as described in Section IV
            hereof.

     The franchise fees shall be non-refundable.

IV.  DEVELOPMENT SCHEDULE

     4.01.  Developer shall exercise each development right granted herein only
by executing a Franchise Agreement for each Franchised Unit for a site accepted
by the Franchisor in the Development Area as hereinafter provided. Developer's
right to execute such a Franchise Agreement shall be contingent upon Developer's
continuous performance of all of the terms and conditions of this Agreement and
any other development, franchise or other agreements between Developer and
Franchisor. The Franchise Agreement for each Franchised Unit developed pursuant
to this Agreement shall be in the form of the Franchise Agreement attached
hereto as Exhibit C.

     4.02.  Recognizing that time is of the essence in this Agreement, Developer
agrees to exercise the development rights granted hereunder in the manner
specified in Section IV hereof and to satisfy the Development Schedule. Failure
by Developer to adhere to the Development Schedule shall constitute a default
under this Agreement, as provided in Section 6.03. hereof.

     4.03.  In addition to the development fee required by Section III hereof,
Developer shall, upon execution of the Franchise Agreement for each Franchised
Unit issued hereunder, pay an initial franchise fee in the amount referred to in
Section 3.02 hereof, all of which amount shall be non-refundable and fully
earned by Franchisor upon execution of the Franchise Agreement for such
Franchised Unit.

                                       4
<PAGE>

V.   DEVELOPMENT PROCEDURES

     5.01.  Developer assumes all cost, liability and expense for locating,
obtaining and developing the site for each Franchised Unit. Developer shall not
make any binding commitments to lease and/or purchase a proposed site until the
site has been accepted by Franchisor, in writing.

     5.02   Franchisor will provide Developer with the following site selection
assistance: (1) SBC site-selection guidelines and, as Developer may request, a
reasonable amount of consultation with respect thereto; and (2) such on-site
evaluation as Franchisor may deem advisable as part of its evaluation of
Developer's request for site acceptance. Developer agrees that Franchisor will
incur no liability to Developer for site selection assistance provided by
Franchisor, except for gross negligence or willful misconduct.

     5.03   Site Selection.
            --------------

            A.   Franchisor establishes, from time to time, site selection
                 criteria for demographic characteristics, traffic patterns,
                 parking, character of the neighborhood, competition from other
                 businesses in the area, the proximity to other businesses
                 (including other SBC Retail Units), the nature of other
                 businesses in proximity to the site and other commercial
                 characteristics (including the purchase price, rental
                 obligations and other lease terms for the proposed site) and
                 the size, appearance, other physical characteristics, and a
                 site plan of the premises. Developer shall select proposed
                 sites that it reasonably believes to conform to the site
                 selection criteria and submit to Franchisor a complete real
                 estate site package (containing that information as Franchisor
                 may reasonably require) for each proposed site (hereinafter a
                 "Site Acceptance Request" or "SAR").

            B.   Developer acknowledges that, in order to preserve and enhance
                 the reputation and goodwill of all SBC Retail Units and the
                 goodwill of the Proprietary Marks, all SBC Retail Units must be
                 properly developed, operated and maintained. Accordingly,
                 Developer agrees that Franchisor may refuse to accept a site
                 for a proposed Franchised Unit unless Developer demonstrates
                 sufficient financial capabilities, in Franchisor's sole
                 judgment, applying standards consistent with criteria
                 Franchisor uses to establish SBC Retail Units in other
                 comparable market areas, to properly develop, operate and
                 maintain the proposed Franchised Unit. To this end, Developer
                 shall furnish Franchisor with such financial statements and
                 other information regarding Developer and the development and
                 operation of the proposed Franchised Unit, including, without
                 limitation, investment and financing plans for the proposed
                 Franchised Unit, as Franchisor reasonably may require.

                                       5
<PAGE>

     5.04  Site Acceptance
           ---------------

           A.  Within 45 days after Franchisor's receipt of the information
               described in Section 5.03, Franchisor shall advise Developer in
               writing whether it has accepted a particular site for development
               of a Franchised Unit. Franchisor may accept a site subject to
               certain conditions which Franchisor shall specify in writing. If
               Franchisor does not accept a completed Site Acceptance Request
               within 45 days, Franchisor shall be deemed to have denied
               acceptance of the proposed site for the Franchised Unit.
               Franchisor's acceptance or denial of acceptance of a proposed
               site for a Franchised Unit may be subject to reasonable
               conditions as determined in its sole discretion.

           B.  Franchisor's acceptance of a site for a Franchised Unit is not a
               representation or a promise by Franchisor that a Franchised Unit
               at that location will achieve any particular sales volume or that
               it will be profitable. Similarly, Franchisor's acceptance of a
               site and its refusal to accept other sites is not a
               representation or a promise that the accepted site will have a
               higher sales volume or be more profitable than a site which
               Franchisor did not accept. Franchisor assumes no liability or
               responsibility for: (1) inspection of any structure on a proposed
               site for asbestos or other toxic or hazardous materials; (2)
               compliance with the Americans With Disabilities Act ("ADA"); or
               (3) compliance with any other applicable law. It is Developer's
               sole responsibility to obtain satisfactory evidence and/or
               assurances that the proposed site (and any structures thereon) is
               free from environmental contamination and in compliance with the
               requirements of the ADA.

     5.05  Franchisor has the right, from time to time, to delegate the
performance of any portion or all of its obligations and duties under this
Agreement to designees, whether agents of Franchisor or independent contractors
with which Franchisor has contracted to provide this service.

     5.06. Site Acquisition
           ----------------

           A.  Within ninety (90) days after notice of Franchisor's
               acceptance of a proposed site, Developer shall submit,
               in writing to Franchisor, satisfactory proof to
               Franchisor that Developer:

               (i)   owns the accepted site; or

                                       6
<PAGE>

               (ii)  has leased the accepted site for a term which,
                     with renewal options, is not less than the
                     initial term of the Franchise Agreement; or

               (iii) has entered into a written agreement to purchase
                     or to lease the accepted site on terms provided
                     herein, subject only to obtaining necessary
                     governmental permits.

     The proof required by this Section includes, but is not limited to,
     submission of executed copies of all leases and deeds, as well as all
     governmental approvals if effectiveness of the leases or deeds is
     conditioned thereon.

          B.   If Developer proposes to lease or sublease the accepted
               site, Developer shall provide Franchisor with a copy of
               the fully-executed lease for the accepted site within
               90 days after Franchisor's acceptance of the proposed
               site, but, in any event, prior to the commencement of
               construction at the site. The lease or sublease shall
               not contain any covenants, use clauses or other
               obligations that would prevent Developer from
               performing its obligations under the Franchise
               Agreement. Any lease, sublease, letter of intent or
               lease memorandum for the Franchised Location shall
               contain provisions that satisfy the following
               requirements during the entire term of the lease,
               including any renewal terms:

               1.   The landlord consents to Developer's use of the proprietary
                    signs, distinctive designs and layouts of the SBC System,
                    the Proprietary Marks, and upon expiration or the earlier
                    termination of the lease, consents to permit Developer, at
                    Developer's expense, to remove all such items and other
                    trade fixtures, so long as Developer makes repairs to the
                    building caused by such removal.

               2.   The landlord agrees to provide Franchisor (at the same time
                    sent to Developer) a copy of all amendments and assignments
                    and notices of default pertaining to the lease and the
                    leased premises.

               3.   Franchisor shall have the right to enter the leased premises
                    to make any modifications or alterations, at its own cost,
                    necessary to protect the Proprietary Marks and the SBC
                    System and to cure, within the time periods provided by the
                    lease, any default under the lease, all without being guilty
                    of trespass or other tort, and to charge Developer for these
                    costs.

                                       7
<PAGE>

               4.   The landlord agrees that Developer shall be solely
                    responsible for all obligations, debts and payments under
                    the lease.

               5.   The landlord agrees that, following the expiration or
                    earlier termination of the Franchise Agreement, Developer
                    shall have the right to make those alterations and
                    modifications to the premises as may be necessary to clearly
                    distinguish to the public the premises from an SBC
                    Franchised Unit and also make those specific additional
                    changes as Franchisor reasonably may request for that
                    purpose. The landlord also agrees that, if Developer fails
                    to promptly make these alterations and modifications,
                    Franchisor shall have the right to do so without being
                    guilty of trespass or other tort so long as Franchisor makes
                    repairs to the building caused by such removal.

               6.   The landlord agrees not to amend or otherwise modify the
                    lease in any manner that would affect any of the foregoing
                    requirements without the prior written consent of
                    Franchisor, which consent shall not be unreasonably
                    withheld.

               7.   Developer may assign the lease to Franchisor or its designee
                    with landlord's consent (which consent shall not be
                    unreasonably withheld) and without payment of any assignment
                    fee or similar charge or increase in any rentals payable to
                    the landlord.

     5.07  Construction of the Franchised Unit

           A.  Franchised Unit Development
               ---------------------------

               1.   Developer assumes all cost, liability and expense for
                    developing, constructing and equipping each Franchised Unit.
                    Franchisor will furnish to Developer prototypical plans and
                    specifications for an SBC Retail Unit, including
                    requirements for dimensions, design, image, interior layout,
                    decor, fixtures, equipment, signs, furnishings, storefront
                    and color scheme. It shall be Developer's responsibility to
                    have prepared all required construction plans and
                    specifications to suit the shape and dimensions of the
                    accepted site and Developer must ensure that these plans and
                    specifications comply with applicable ordinances, building
                    codes and permit requirements and with lease requirements
                    and restrictions. Developer shall use only registered
                    architects, registered engineers, and professional and
                    licensed contractors.

                                       8
<PAGE>

               2.   Within ninety (90) days after notice of Franchisor's
                    acceptance of a proposed site, Developer shall:

                    (a)  submit proposed construction plans, specifications and
                         drawings for the Franchised Unit ("Plans") to
                         Franchisor which must be in conformity with
                         Franchisor's then-current standards and specifications
                         for SBC Retail Units, as set out in the current
                         Confidential Operating Standards Manual (as defined in
                         the Franchise Agreement) or otherwise in writing, and
                         shall, upon the request of Franchisor, submit all
                         revised or "as built" Plans during the course of such
                         construction. Franchisor will approve or refuse to
                         approve the Plans and notify Developer within 30 days
                         after Franchisor receives the Plans. (Approval shall
                         not be unreasonably withheld.). The Plans shall
                         include, but are not limited to, floor plans, equipment
                         layouts, decor, and interior and exterior elevations.
                         Once Franchisor has approved the Plans, no substantial
                         change shall be made to the Plans without the prior
                         approval of Franchisor, which shall not to be
                         unreasonably withheld. If, in the course of
                         construction, any such change in the Plans is
                         contemplated, the approval of Franchisor must first be
                         obtained before proceeding. Franchisor shall approve or
                         disapprove Plan changes within 10 business days of
                         receipt; and

                    (b)  execute the Franchise Agreement and pay all fees
                         required thereunder. If Developer is a partnership,
                         each general partner shall, and if Developer is a
                         corporation, each stockholder holding a beneficial
                         interest of five percent (5%) or more of the securities
                         with voting rights of Developer or any corporation
                         directly or indirectly controlling Developer shall,
                         guarantee the performance of the Franchise Agreement by
                         executing the Franchisor's Franchise Agreement
                         Guarantee form. Franchisor shall not approve the final
                         construction plans until the Franchise Agreement is
                         executed and all fees are paid by Developer.

               3. Developer may not commence construction of any Franchised Unit
                  prior to receiving written notification from Franchisor that
                  it has approved the Plans for each Franchised Unit. All
                  construction must be in accordance with Plans approved by
                  Franchisor and must comply in all respects with applicable
                  laws, ordinances and local rules and regulations. The
                  Franchised Unit may not open if construction has not been
                  performed in substantial compliance with Plans approved by
                  Franchisor, and this Agreement may be terminated if such non-
                  compliance is not cured within a commercially reasonable
                  amount of

                                       9
<PAGE>

               time. Franchisor may furnish guidance to Developer in developing
               the Franchised Unit and may periodically inspect the premises
               during its development.

          B.   Commencement and Completion of Construction
               -------------------------------------------

               1.  No more than thirty (30) days after the Franchisor approves
               Developer's Plans, Developer shall commence construction or
               renovation of the Franchised Unit.  If commencement of
               construction or renovation is delayed by a cause beyond the
               reasonable control of Developer, the date upon which commencement
               of construction or renovation is to begin may be extended by
               obtaining written approval of Franchisor. Prior to the
               commencement of construction, Developer shall: (1) eliminate or
               otherwise satisfy all of the conditions set forth in writing by
               Franchisor; (2) if not previously paid, pay Franchisor the
               balance of the initial fees required by this Agreement; and (3)
               provide Franchisor, if Developer leases the premises of the
               Franchised Unit, a copy of the fully-executed lease for the
               premises or, if Developer owns the premises, proof of Developer's
               ownership interest and (4) procure the insurance coverage
               provided for in Section XI of the Franchise Agreement, and
               maintain such insurance coverage throughout the term of the
               Franchise Agreement.

               2.  Upon commencement of construction or renovation of the
               Franchised Unit, Developer shall notify Franchisor on such form
               as Franchisor may prescribe.

               3.  Notwithstanding the occurrence of any events, except events
               constituting Force Majeure, construction shall be completed and
               the Franchised Unit shall be furnished, equipped and shall
               otherwise be ready to open for business in accordance with this
               Agreement not later than 180 days after the earlier to occur of
               (i) Franchisor's acceptance of the site of the Franchised Unit or
               (ii) the date of execution of the Franchise Agreement ("the
               Opening Date"). If events constituting Force Majeure cause a
               delay in the commencement of construction of the Franchised Unit,
               Franchisor shall proportionately extend the Opening Date for the
               Franchised Unit.

               4.  Developer agrees, at its sole expense, to do or cause to be
               done the following, by the Opening Date:

                   (a)  Obtain and maintain all required building, utility,
                        sign, health, sanitation, business and other permits and
                        licenses applicable to the Franchised Unit.

                                       10
<PAGE>

                    (b)  Construct all required improvements to the premises and
                         decorate the interior of the Franchised Unit in
                         compliance with the Plans approved by Franchisor.

                    (c)  Purchase or lease and install all specified and
                         required fixtures, equipment, furnishings and signs
                         required for the Franchised Unit.

                    (d)  Purchase an opening inventory for the Franchised Unit
                         of only authorized and approved products and other
                         materials and supplies.

          C.   Acquisition of Necessary Furnishings, Fixtures and Equipment
               ------------------------------------------------------------

               1.   Developer agrees to use in the development and operation of
               the Franchised Unit only those fixtures, furnishings, equipment
               and signs that Franchisor has approved for SBC Retail Units as
               meeting its specifications and standards for quality, design,
               appearance, function and performance. Developer further agrees to
               place or display at the Franchised Unit only those signs,
               emblems, lettering, logos and display materials that Franchisor
               approves in writing from time to time.

               2.   Developer shall purchase or lease approved brands, types or
               models of fixtures, furnishings, equipment and signs only from
               suppliers designated or approved by Franchisor, which may include
               Franchisor. If Developer proposes to purchase, lease or otherwise
               use any fixtures, furnishings, equipment or signs which have not
               been approved by Franchisor, Developer shall first notify
               Franchisor in writing and shall, at its sole expense, submit to
               Franchisor upon its request sufficient specifications,
               photographs, drawings and/or other information or samples for a
               determination as to whether those fixtures, furnishings,
               equipment and/or signs comply with the specifications and
               standards of Franchisor. Franchisor will, in its sole discretion,
               approve or disapprove the items and notify Developer within 30
               days after Franchisor receives the request.

               3.   If Developer builds any portion of the Franchised Unit not
               in compliance with the approved plans and/or the SBC System
               specifications without receiving prior written consent of
               Franchisor, Franchisor shall have the right to delay the opening
               of the Franchised Unit until Developer, at its sole expense,
               brings the Franchised Unit's development within full compliance
               of the specifications.

                                       11
<PAGE>

          D.   Inspection, Cooperation
               -----------------------

               During the course of construction and/or renovation of the
               Franchised Unit, Developer shall (and shall cause Developer's
               architect, engineer, contractors, and subcontractors to)
               cooperate fully with Franchisor and its designees for the purpose
               of permitting Franchisor and its designees to inspect the
               premises of the Franchised Unit and the course of construction
               and/or renovation of the Franchised Unit in order to determine
               whether construction and/or renovation is proceeding according to
               the Plans. Without limiting the generality of the foregoing,
               Developer, and Developer's architect, engineer, contractors and
               subcontractors shall: (1) supply Franchisor or its designees with
               samples of construction and/or renovation materials, due
               diligence environmental studies, supplies, equipment and other
               material and reports, if any such tests, studies or reports
               indicate there may be material problems or as Franchisor or its
               designees may request; and (2) afford representatives of
               Franchisor and its designees access to the Franchised Location
               and to the construction and/or renovation work in order to permit
               Franchisor and its designees to carry out inspections.

    5.08. Limitation of Liability. Notwithstanding the right of Franchisor to
          ------------------------
approve the Plans and to inspect the construction and/or renovation of the
Franchised Unit, Franchisor and its designees shall have no liability or
obligation with respect to the premises of the Franchised Unit, the design,
construction or renovation of the Franchised Unit or the furnishings, fixtures
and equipment to be required; the rights of Franchisor being exercised solely
for the purpose of ensuring compliance with the terms and conditions of this
Agreement.

     5.09 Right to Open the Franchised Unit

          1.   Developer shall notify Franchisor in writing at least 30 days
               prior to the date Developer expects construction and/or
               renovation of each Franchised Unit to be completed and a
               certificate of occupancy issued. Franchisor reserves the right,
               after receiving Developer's notice, to conduct a final inspection
               of the Franchised Unit and its premises to determine if Developer
               has complied with this Agreement. Franchisor shall not be liable
               for delays or loss occasioned by its inability to complete its
               investigation and to make a determination within this period.
               Developer shall not open the Franchised Unit for business without
               the express written authorization of Franchisor, which will not
               be granted unless Developer has satisfied the following
               conditions:

                                       12
<PAGE>

          1.   Developer is not in material default under this Agreement or any
               other agreements with Franchisor; Developer is not in default
               beyond the applicable cure period under any real estate lease,
               equipment lease or financing instrument relating to the
               Franchised Unit (or any other Franchised Unit), Developer is not
               in default beyond the applicable cure period with any vendor or
               supplier to the Franchised Unit (or any other Franchised Unit)
               and, for the previous 6 months, Developer has not been in default
               beyond the applicable cure period under any agreement with
               Franchisor.

          2.   Developer has executed the Franchise Agreement for the Franchised
               Unit (and all other Franchised Units), is current on all
               obligations due Franchisor and has paid Franchisor the balance of
               the initial fees required by this Agreement (and all other
               Agreements).

          3.   Franchisor is satisfied that the Franchised Unit was constructed
               and/or renovated substantially in accordance with the Plans
               approved by Franchisor and state and local codes.

          4.   If the premises of the Franchised Unit is leased, Franchisor has
               received a copy of the fully-executed lease.

          5.   Developer has obtained a certificate of occupancy and any other
               required health, safety or fire department certificates. If
               requested by Franchisor, Developer shall submit a copy of the
               certificate of occupancy to Franchisor.

          6.   Developer has certified to Franchisor in writing that the
               installation of all items of furnishings, fixtures, equipment,
               signs, computer terminals and related equipment, supplies and
               other items has been accomplished and that Developer has hired
               and properly trained its staff.

          7.   Franchisor has determined that the Franchised Unit has been
               constructed and/or renovated and equipped substantially in
               accordance with the requirements of this Agreement and that
               Developer has hired and trained a staff in accordance with the
               requirements of this Agreement and the Franchise Agreement.

                                       13
<PAGE>

                8.   Franchisor has been furnished with copies of all insurance
                     policies required by Section XI of the Franchise Agreement
                     or such other evidence of insurance coverage and payment of
                     premiums as Franchisor reasonably may request.

           B. If the Franchised Unit is Developer's first Franchised Unit
     opened hereunder, Franchisor shall provide a representative to be present
     at the opening. The Franchised Unit shall not be opened unless such
     representative is present. Should commencement of operation of the
     Franchised Unit be delayed by the failure of Franchisor to provide such a
     representative, the date upon which commencement of operation of the
     Franchised Unit is required pursuant to Exhibit A of this Agreement, shall
     be extended until such time as such assistance is provided by Franchisor.

VI.  DEFAULT AND TERMINATION

     6.01. The rights granted to Developer in this Agreement have been granted
based upon Developer's representations and assurances, among others, that the
conditions set forth in Sections IV and  V of this Development Agreement will be
met by Developer in a timely manner.

     6.02. Developer shall be deemed to be in default under this Agreement, and
all rights granted herein shall automatically terminate without notice to
Developer, if Developer shall become insolvent or make a general assignment for
the benefit of creditors; if a petition in bankruptcy is filed by Developer or
such a petition is filed against Developer and not opposed by Developer; or if
Developer is adjudicated bankrupt or insolvent; or if a receiver or other
custodian (permanent or temporary) of Developer's assets or property, or any
part thereof, is appointed by any court of competent jurisdiction; or if
proceedings for a composition with creditors under the applicable law of any
jurisdiction should be instituted by or against Developer; or if a final
judgment remains unsatisfied or of record for thirty (30) days or longer (unless
a supersedeas bond is filed); or if Developer is dissolved; or if execution is
levied against Developer's property or business; or if suit to foreclose any
lien or mortgage against the premises or equipment of any Franchised Unit
developed hereunder is instituted against the Developer and not dismissed within
thirty (30) days; or if the real or personal property of any Franchised Unit
developed hereunder shall be sold after levy thereupon by any sheriff, Marshall,
or constable.

     6.03. If Developer fails to comply with the Development Schedule or any
other terms of this Agreement, or fails to obtain Franchisor's approval of a
site or construction plans and specifications prior to commencement of
construction, or fails to comply with any terms or conditions of any franchise
agreement covering a Franchised Unit established hereunder, or any other
agreement between Developer or any affiliate of Developer and Franchisor or any
affiliate of Franchisor, such action shall constitute a default under this
Development Agreement.  Upon such

                                       14
<PAGE>

default, Franchisor, in its discretion, may, effective immediately upon the
mailing of written notice by Franchisor to Developer, do any one or more of the
following:

         A.  Terminate this Agreement and all rights granted hereunder without
             affording the Developer any opportunity to cure the default;

         B.  Reduce the number of Franchised Units which Developer may establish
             pursuant to Section 1.01 of this Agreement;

         C.  Terminate the territorial exclusivity granted Developer in Section
             1.01 hereof or reduce the area of territorial exclusivity granted
             Developer hereunder;

         D.  Withhold evaluation or approval of site proposal packages and
             refuse to permit the opening of any Franchised Unit then under
             construction or otherwise not ready to commence operations; or

         E.  Accelerate the Development Schedule set forth in Exhibit A hereto.

     In addition to the foregoing, Franchisor shall be entitled to pursue any
other remedies available hereunder or at law or in equity.

     6.04.   Upon termination of this Agreement, Developer shall have no right
to establish or operate any Franchised Unit for which a Franchise Agreement has
not been executed by Franchisor and delivered to Developer at the time of
termination; and Franchisor shall be entitled to establish, and to license
others to establish, Franchised Units in the Development Area, except as may be
provided under any other agreement which is then in effect between Franchisor
and Developer.

     6.05.   A default in the Development Schedule under this Development
Agreement shall not constitute a default under any existing Franchise Agreement
between the parties hereto.

VII. TRANSFERABILITY OF INTEREST

     7.01.   Transfer by Franchisor.  This Agreement shall inure to the benefit
             ----------------------
of the successors and assigns of Franchisor.  Franchisor shall have the right to
transfer or assign its interest in this Agreement to any person, persons,
partnership, association, or corporation.  If Franchisor's assignee assumes all
the obligations of Franchisor hereunder and sends written notice of the
assignment so attesting, Developer agrees promptly to execute a general release
of Franchisor, and any affiliates of Franchisor, from claims or liabilities of
Franchisor under this Agreement.

     7.02.   Transfer by Developer.  Developer understands and acknowledges that
             ---------------------
the rights and duties set forth in this Agreement are personal to Developer, and
that Franchisor has granted this

                                       15
<PAGE>

Agreement in reliance on Developer's business skill and financial capacity.
Accordingly, neither (i) Developer, nor (ii) any immediate or remote successor
to Developer, nor (iii) any individual, partnership, corporation or other legal
entity which directly or indirectly owns any interest in the Developer or in
this Development Agreement, shall sell, assign, transfer, convey, donate,
pledge, mortgage, or otherwise encumber any direct or indirect interest in this
Agreement or in Developer without the prior written consent of Franchisor. Any
purported assignment or transfer, by operation of law or otherwise, not having
the written consent of Franchisor, shall be null and void, and shall constitute
a material breach of this Agreement, for which Franchisor may then terminate
without opportunity to cure pursuant to Section 6.03. of this Agreement.
Notwithstanding anything in this Agreement to the contrary, Developer
understands and acknowledges that individual development rights to obtain
franchises to establish and operate Franchised Units may not be transferred
except in connection with a transfer of this Development Agreement, together
with all remaining development options due to be developed under this Agreement,
in accordance with the conditions set forth herein.

     7.03.   Conditions for Consent.  Franchisor shall not unreasonably withhold
             ----------------------
its consent to any transfer referred to in this Section hereof for the remainder
of the term hereof, when requested; provided, however, that prior to the time of
transfer:

             A.  Developer shall not be in default of the Development Schedule;

             B.  The transfer must be in conjunction with a simultaneous
                 transfer to the same transferee of all Franchised Units
                 operated by Developer under the SBC System within the same
                 DMA('s) as the remaining development options ;

             C.  All of Developer's accrued monetary obligations to Franchisor
                 and its subsidiaries and affiliates shall have been satisfied;

             D.  Developer shall have agreed to remain obligated under the
                 covenants contained in Sections VII and VIII hereof as if this
                 Agreement had been terminated on the date of the transfer;

             E.  The transferee must be of good moral character and reputation,
                 in the reasonable judgment of the Franchisor;

             F.  The transferee shall have demonstrated to the Franchisor's
                 satisfaction, by meeting with the Franchisor or otherwise at
                 Franchisor's option, that the transferee's qualifications meet
                 the Franchisor's then current criteria for new developers;

             G.  The parties must execute a written assignment, in a form
                 satisfactory to Franchisor, pursuant to which the transferee
                 shall assume all of the

                                       16
<PAGE>

             obligations of the individual or entity which is the transferor
             under this Agreement and pursuant to which Developer shall
             generally release any and all claims it might have against
             Franchisor as of the date of the assignment;

         H.  The transferee must, at Franchisor's option, execute the then-
             current form of Development Agreement and such other then-current
             ancillary agreements as Franchisor may reasonably require.  The
             then-current form of Development Agreement may have significantly
             different provisions, provided, however, that Exhibits A and B
             hereto shall be Exhibits A and B to such development agreement;

         I.  If the transferee is a partnership, the partnership agreement shall
             provide that further assignments or transfers of any interest in
             the partnership are subject to all restrictions imposed upon
             assignments and transfers in this Agreement;

         J.  Developer shall, at Franchisor's option and request, execute a
             written guarantee of the transferee's obligations under the
             Agreement, which such guarantee shall not exceed a period of three
             (3) years from the date of transfer; and

         K.  The Developer or the transferee shall have paid to Franchisor a
             transfer fee of Five Thousand Dollars ($5,000), to cover
             Franchisor's administrative expenses in connection with the
             transfer, but no development fees shall be charged by Franchisor
             for a transfer.  If the transferee is a corporation formed by
             Developer for the convenience of ownership and in which the
             Developer is the sole shareholder, no transfer fee shall be
             required.

   7.04. Grant of Security Interest.  Developer shall grant no security
         --------------------------
interest in this Agreement unless the secured party agrees that, in the event of
any default by Developer under any documents related to the security interest,
(i) Franchisor shall be provided with notice of default and be given a
reasonable time within which to cure said default, (ii) Franchisor shall have
the right and option to be substituted as obligor to the secured party and to
cure any default of Developer or to purchase the rights of the secured party
upon payment of all sums then due to such secured party, except such amounts
which may have become due as a result of any acceleration of the payment dates
based upon the Developer's default, and (iii) such other requirements as
Franchisor, in its sole discretion, deems reasonable and necessary to protect
the integrity of the Proprietary Marks and the SBC System.

                                       17
<PAGE>

     7.05.  Death or Mental Incapacity.  Upon the death or mental incapacity of
            --------------------------
any person with an interest in this Agreement or in Developer, the executor,
administrator, or personal representative of such person shall transfer his
interest to a third party approved by Franchisor within twelve (12) months after
such death or mental incapacity.  Such transfer, including, without limitation,
transfer by devise or inheritance, shall be subject to the same conditions as
any inter vivos transfer.  However, in the case of transfer by devise or
    ----- -----
inheritance, if the heirs or beneficiaries of any such person are unable to meet
the conditions in this Section VII, the personal representative of the deceased
Developer shall have a reasonable time, but no more than eighteen (18) months
after the death of the Developer, to dispose of the deceased's interest in this
Agreement and the business conducted pursuant hereto, which disposition shall be
subject to all the terms and conditions for assignments and transfers contained
in this Agreement.  If the interest is not disposed of within twelve (12) or
eighteen (18) months, whichever is applicable, Franchisor may terminate this
Agreement pursuant to Section 5.03 hereof.

     7.06.  Right of First Refusal.  Any party holding any interest in this
            ----------------------
Agreement or in Developer, and who desires to accept any bona fide offer from a
                                                         ---- ----
third party to purchase such interest, shall notify Franchisor in writing of
such offer within ten (10) days of receipt of such offer, and shall provide such
information and documentation relating to the offer as Franchisor may require.
Franchisor shall have the right and option, exercisable within thirty (30) days
after receipt of such written notification, to send written notice to the seller
that Franchisor intends to purchase the seller's interest on the same terms and
conditions offered by the third party.  In the event that Franchisor elects to
purchase the seller's interest, closing on such purchase must occur within sixty
(60) days from the date of notice to the seller of the election to purchase by
Franchisor.  Any material change in the terms of any offer prior to closing
shall constitute a new offer subject to the same rights of first refusal by
Franchisor as in the case of an initial offer.  Failure of Franchisor to
exercise the option afforded by this Section 7.06 shall not constitute a waiver
of any other provisions of this Agreement, including all of the requirements of
this Section VII, with respect to a proposed transfer.

     In the event the consideration, terms, and/or conditions offered by a third
party are such that Franchisor may not reasonably be required to furnish the
same consideration, terms, and/or conditions, then Franchisor may purchase the
interest in this Agreement, Developer, or Developer's business proposed to be
sold for the reasonable equivalent in cash.  If the parties cannot agree within
a reasonable time as to the reasonable equivalent in cash of the consideration,
terms, and/or conditions offered by the third party, an independent appraiser
shall be designated by Franchisor, and his determination shall be binding upon
the parties.

     7.07.  Offerings by Developer.  Securities or partnership interests in
            ----------------------
Developer may be offered to the public, by private offering or otherwise, only
with the prior written consent of Franchisor, which consent shall not be
unreasonably withheld.  All materials required for such offering by federal or
state law shall be submitted to Franchisor for review prior to their being filed
with any governmental agency; and any materials to be used in any exempt
offering shall be submitted to Franchisor for review prior to their use.  No
offering of such securities shall imply (by

                                       18
<PAGE>

use of the Proprietary Marks or otherwise) that Franchisor is participating in
the underwriting, issuance, or offering of securities by Developer or
Franchisor; and Franchisor's review of any offering shall be limited solely to
the subject of the relationship between Developer and Franchisor. Developer and
the other participants in the offering must fully indemnify Franchisor in
connection with the offering. For each proposed offering, Developer shall pay to
Franchisor a non-refundable fee of Five Thousand Dollars ($5,000), or such
greater amount as is necessary to reimburse Franchisor for its reasonable costs
and expenses associated with reviewing the proposed offering, including, without
limitation, legal and accounting fees. Developer shall give Franchisor written
notice at least thirty (30) days prior to the date of commencement any offering
or other transaction covered by this Section 7.07.

VIII.  CONFIDENTIAL INFORMATION

     8.01.  Developer shall not, during the term of this Agreement or
thereafter, communicate, divulge, or use for the benefit of any other person,
persons, partnership, association, or corporation, any confidential information,
knowledge, or know-how concerning the construction and methods of operation of
any Franchised Unit which may be communicated to Developer, or of which
Developer may be apprised, by virtue of Developer's operation under the terms of
this Agreement.  Developer shall divulge such confidential information only to
such employees of Developer as must have access to it in order to exercise the
development rights granted hereunder and to establish and operate the Franchised
Units pursuant to the Franchise Agreement and as Developer may be required by
law, provided, Developer shall give Franchisor prior written notice of any such
required disclosure immediately upon receipt of notice by Developer in order for
Franchisor to have the opportunity to seek a protective order or take such other
actions as it deems appropriate under the circumstances.

     8.02.  Any and all information, knowledge, and know-how, including, without
limitation, drawings, materials, equipment, recipes, prepared mixtures or blends
of coffees r other food products, and other data, which Franchisor designates as
confidential, and any information, knowledge, or know-how which may be derived
by analysis thereof, shall be deemed confidential for purposes of this
Development Agreement, except information which Developer can demonstrate came
to Developer's attention prior to disclosure thereof by Franchisor or which, at
the time of disclosure thereof by Franchisor to Developer, had become a part of
the public domain, through publication or communication by others or which,
after disclosure to Developer by Franchisor, becomes a part of the public
domain, through publication or communication by others.

     8.03.  Developer shall require all of Developer's employees, as a condition
of their employment, to execute an employment agreement, as provided in writing
by Franchisor, prohibiting them during the term of their employment, or
thereafter, from communicating, divulging, or using for the benefit of any
person, persons, partnership, association, or corporation any confidential
information, knowledge, or know-how concerning the methods of operation of the
franchised

                                       19
<PAGE>

business which may be acquired during the term of their employment with
Developer. A duplicate original of each such agreement shall be provided to
Franchisor upon execution.

IX.  COVENANTS

     9.01.  Developer specifically acknowledges that, pursuant to this
Agreement, Developer will receive valuable specialized training and confidential
information, including, without limitation, information regarding the
operational, sales, promotional, and marketing methods and techniques of
Franchisor and the System. Developer covenants that, during the term of this
Agreement, except as otherwise approved in writing by Franchisor, Developer
(who, unless otherwise specified, shall include for purposes of this Section IX,
collectively and individually, all officers, directors and holders of a
beneficial interest of five percent (5%) or more of the securities with voting
rights of Developer, and of any corporation directly or indirectly controlling
Developer, if Developer is a corporation, and the general partners and any
limited partners, including any corporation and the officers, directors and
holders of beneficial interests of five percent (5%) or more of the securities
with voting rights, of a corporation which controls, directly or indirectly, any
general or limited partner, if Developer is a partnership) shall not, either
directly or indirectly, for Developer or through or on behalf of, or in
conjunction with, any person, persons, partnership, or corporation:

            A.  Divert or attempt to divert any business or customer of the
                Franchised Units to be developed hereunder to any competitor by
                direct or indirect inducements or otherwise, or to do or
                perform, directly or indirectly, any other act injurious or
                prejudicial to the goodwill associated with Franchisor's
                Proprietary Marks and the System;

            B.  Employ or seek to employ any person who is at the time employed
                by Franchisor or by any other SEATTLE' BEST COFFEE franchisees
                or otherwise, or directly or indirectly induce such person to
                leave his or her employment; or

            C.  Own, maintain, operate, engage in, or have any interest in any
                business that prepares, offers, sells, roasts and/or distributes
                specialty coffee products and/or any product or service
                substantially similar to those sold within the SEATTLE' BEST
                COFFEE System (a "Specialty Coffee Shop"); provided, however,
                that the term "Specialty Coffee Shop" shall not apply to any
                business operated by Franchisee under a franchise agreement with
                Franchisor or an affiliate of Franchisor. During the term of
                this Agreement, there is no geographical limitation on this
                restriction.

     9.02.  Developer covenants that, except as otherwise approved in writing by
the Franchisor, Developer shall not, either directly or indirectly, for itself
or through or on behalf of, or in

                                       20
<PAGE>

conjunction with, any person, persons, partnership or corporation, during the
term hereof or for two (2) years following expiration or termination of this
Agreement, regardless of the cause for termination, own, maintain, engage in, or
have an interest in any Specialty Coffee Shop which is located within a radius
of ten (10) miles of the location of any other SBC Retail Unit, whether owned by
Franchisor or any other SBC franchisee, which is in existence as of the date of
expiration or termination of this Agreement.

     9.03.  At Franchisor's request,  Developer shall require and obtain
execution of covenants similar to those set forth in this Section IX (including
covenants applicable upon the termination of a person's relationship with
Developer) from all officers, directors, and holders of a direct or indirect
beneficial ownership interest of five percent (5%) or more in Developer.  Every
covenant required by this Section 9.03. shall be in a form satisfactory to
Franchisor, including, without limitation, specific identification of Franchisor
as a third party beneficiary of such covenants with the independent right to
enforce them.  Failure by Developer to obtain execution of a covenant required
by this Section 9.03. shall constitute a material breach of this Agreement.

X.   NOTICES

     Any and all notices required or permitted under this Agreement shall be in
writing and shall be delivered by any means which will provide evidence of the
date received to the respective parties at the following addresses unless and
until a different address has been designated by written notice to the other
party:

     Notices to Franchisor:   SEATTLE'S BEST COFFEE, LLC.
                              Second Avenue 1321
                              Suite 200
                              Seattle, WA 98101

                              cc: AFC Legal Department
                              Six Concourse Parkway
                              Suite 1700
                              Atlanta, GA 30328

     Notices to Developer:    ________________________
                              Attention: _____________

     All written notices and reports permitted or required to be delivered by
the provisions of this Agreement shall be addressed to the party to be notified
at its most current principal business address of which the notifying party has
been notified and shall be deemed so delivered (i) at the time delivered by
hand; (ii) one (1) business day after sending by telegraph, facsimile or
comparable electronic system; or (iii) if sent by registered or certified mail
or by other means which affords the

                                       21
<PAGE>

sender evidence of delivery, on the date and time of receipt or attempted
delivery if delivery has been refused or rendered impossible by the party being
notified.

XI.  NON-WAIVER

     No failure of Franchisor to exercise any power reserved to it in this
Agreement, or to insist upon compliance by Developer with any obligation or
condition in this Agreement, and no custom or practice of the parties at
variance with the terms hereof, shall constitute a waiver of Franchisor's right
to demand exact compliance with the terms of this Agreement.  Waiver by
Franchisor of any particular default shall not affect or impair Franchisor's
right with respect to any subsequent default of the same or of a different
nature, nor shall any delay, forbearance, or omission of Franchisor to exercise
any power or rights arising out of any breach or default by Developer of any of
the terms, provisions, or covenants of this Agreement, affect or impair
Franchisor's rights, nor shall such constitute a waiver by Franchisor of any
rights hereunder or right to declare any subsequent breach or default.
Subsequent acceptance by Franchisor of any payments due to it shall not be
deemed to be a waiver by Franchisor of any preceding breach by Developer of any
terms, covenants, or conditions of this Agreement.

XII. INDEPENDENT CONTRACTOR AND INDEMNIFICATION

     12.01.  It is understood and agreed by the parties hereto that this
Agreement does not create a fiduciary relationship between them, that Developer
is an independent contractor, and that nothing in this Agreement is intended to
constitute either party an agent, legal representative, subsidiary, joint
venturer, partner, employee, or servant of the other for any purpose whatsoever.

     12.02.  Developer shall hold itself out to the public to be an independent
contractor operating pursuant to this Agreement.  Developer agrees to take such
actions as shall be necessary to that end.

     12.03.  Developer understands and agrees that nothing in this Agreement
authorizes the Developer to make any contract, agreement, warranty, or
representation on Franchisor's behalf, or to incur any debt or any other
obligation in Franchisor's name, and that Franchisor shall in no event assume
liability for, or be deemed liable hereunder as a result of, any such action or
by reason of any act or omission of Developer, or any claim or judgement arising
therefrom.  Developer shall indemnify and hold Franchisor and Franchisor's
officers, directors, shareholders, and employees, harmless against any and all
such claims arising directly or indirectly from, as a result of, or in
connection with Developer's activities, as well as the cost, including
attorney's fees, of defending against such claims.

     12.04.  Developer shall indemnify and hold Franchisor harmless for all
costs, expenses, or losses incurred by Franchisor in enforcing the provisions
hereof or in upholding the propriety of any action or determination by
Franchisor pursuant to this Agreement, or arising in any manner from

                                       22
<PAGE>

Developer's breach of or failure to perform any covenant or obligation
hereunder, including, without limitation, reasonable attorney's fees incurred by
Franchisor in connection with any litigation relating to any aspect of this
Agreement, unless Developer shall be found, after due legal proceedings, to have
complied with all of the terms, provisions, conditions and covenants hereof.

XIII.  APPROVALS

       13.01.  Whenever this Agreement requires the prior approval of
Franchisor, Developer shall make a timely written request to Franchisor
therefor, and, except as may otherwise be expressly provided herein, any
approval or consent granted shall be in writing.

       13.02.  Franchisor makes no warranties or guaranties upon which Developer
may rely, and assumes no liability or obligation to Developer or any third party
to which Franchisor would not otherwise be subject, by providing any waiver,
approval, advice, consent, or services to Developer in connection with this
Agreement, or by reason of any neglect, delay, or denial of any request
therefor.

XIV.   ACKNOWLEDGMENT

       14.01.  Developer acknowledges that the success of the business venture
contemplated by this Agreement involves substantial business risks and will be
largely dependent upon the ability of Developer as an independent businessman.
Franchisor expressly disclaims the making of, and Developer acknowledges not
having received, any warranty or guaranty, expressed or implied, as to the
potential volume, profits, or success of the business venture contemplated by
this Agreement.

       14.02.  Developer acknowledges that Developer has received, read, and
understands this Agreement, the exhibits hereto, and agreements relating hereto,
if any; and the Franchisor has accorded Developer ample time and opportunity to
consult with advisors of Developer's own choosing about the potential benefits
and risks of entering into this Agreement.

       14.03.  Developer acknowledges that Developer has received a complete
copy of this Agreement, the exhibits hereto, and agreements relating hereto, if
any, at least five (5) business days prior to the date upon which this Agreement
was executed. Developer further acknowledges that Developer has received the
Uniform Franchise Offering Circular required by the Trade Regulation Rule of the
Federal Trade Commission entitled "Disclosure Requirements and Prohibitions
concerning Franchising and Business Opportunity Ventures" at least ten (10)
business days prior to the date on which this Agreement was executed.

                                       23
<PAGE>

XV.  SEVERABILITY AND CONSTRUCTION

     15.01.    Except as expressly provided to the contrary herein, each
portion, section, part, term, and/or provision of this Agreement shall be
considered severable; and if, for any reason, any section, part, term, and/or
provision herein is determined to be invalid and contrary to, or in conflict
with, any existing or future law or regulation by a court or agency having valid
jurisdiction, such shall not impair the operation, or have any other effect
upon, such other portions, sections, parts, terms, and/or provisions of this
Agreement as may remain otherwise intelligible, and the latter shall continue to
be given full force and effect to bind the parties; and said invalid portions,
sections, parts, terms, and/or provisions shall be deemed not to be part of this
Agreement.

     15.02.    Except as has been expressly provided to the contrary herein,
nothing in this Agreement is intended, nor shall be deemed, to confer upon any
person or legal entity other than Developer, Franchisor, Franchisor's officers,
directors, and employees, and Developer's and Franchisor's respective successors
and assigns as may be contemplated (and, as to Developer, permitted) by Section
VI hereof, any rights or remedies under or by reason of this Agreement.

     15.03.    Developer expressly agrees to be bound by any covenant or promise
imposing the maximum duty permitted by law which is subsumed within the terms of
any provision hereof, as though it were separately articulated in and made a
part of this Agreement, that may result from striking from any of the provisions
hereof any portion or portions which a court will hold to be unreasonable and
unenforceable in a final decision to which Franchisor is a party, or from
reducing the scope of any promise or covenant to the extent required to comply
with such court order.

     15.04.    All captions in this Agreement are intended solely for the
convenience of the parties, and none shall be deemed to affect the meaning or
construction of the provisions hereof.

     15.05.    All provisions of this Agreement which, by their terms or intent,
are designed to survive the expiration or termination of this Agreement, shall
so survive the expiration and/or termination of this Agreement.

     15.06.    This Agreement may be executed in multiple originals and each
copy so executed deemed an original.

XVI. ENTIRE AGREEMENT AND APPLICABLE LAW

     16.01.    This Agreement, the documents referred to herein, and the
exhibits hereto, constitute the entire, full, and complete agreement between
Franchisor and Developer concerning the subject matter hereof and supersede any
and all prior agreements. Except for those permitted to be made unilaterally by
Franchisor hereunder, no amendment, change, or variance from this

                                       24
<PAGE>

Agreement shall be binding on either party unless mutually agreed to by the
parties and executed by their authorized officers or agents in writing.

     16.02.    Applicable Law.  This Agreement takes effect upon its acceptance
               --------------
and execution by Franchisor and shall be interpreted and construed under the
laws of the State of Georgia which laws shall prevail in the event of any
conflict of law (without regard to, and without giving effect to, the
application of Georgia choice of law or conflict of law rules); provided,
however, that if the covenants in Article IX of this Agreement would not be
enforceable under the laws of Georgia, then such covenants shall be interpreted
and construed under the laws of the State in which the Developer operates the
Franchised Units developed hereunder, or in the State where Developer is
domiciled if Developer, at such time, is not operating any Franchised Units.
Nothing in this Section XVI is intended by the parties to subject this Agreement
to any franchise or similar law, rule, or regulation of the State of Georgia to
which this Agreement would not otherwise be subject.

     16.03.    The parties agree that any action brought by Developer against
Franchisor in any court, whether federal or state, shall be brought within a
court of competent jurisdiction in Atlanta, Georgia.  Any action brought by
Franchisor against Developer in any court, whether federal or state, may be
brought within the state and in the judicial district in which Franchisor has
its principal place of business or within a court of competent jurisdiction in
Atlanta, Georgia. Developer hereby waives all questions of personal jurisdiction
or venue for the purpose of carrying out this provision.

     16.04.    No right or remedy herein conferred upon or reserved to
Franchisor is exclusive of any other right or remedy herein, or by law or equity
provided or permitted; but each shall be cumulative of any other right or remedy
provided in this Agreement.

     16.05.    Nothing herein contained shall bar Franchisor's right to obtain
injunctive relief against threatened conduct that will cause it loss or damages,
under the usual equity rules, including the applicable rules for obtaining
restraining orders and preliminary injunctions.

          IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have duly executed, sealed, and delivered this Agreement in multiple
originals as of the day and year first above-written.

SEATTLE'S BEST COFFEE, LLC.                          DEVELOPER:

By:____________________________                By:______________________________

Title:_________________________                Title:___________________________

                                       25
<PAGE>

                                   EXHIBIT A
                             DEVELOPMENT SCHEDULE

                                                       CUMULATIVE
NUMBER OF                                              NUMBER OF
FRANCHISED                                             FRANCHISED
UNITS                                                  UNITS
TO BE OPENED AND                                       TO BE OPEN AND IN
IN OPERATION                  DATE OPENED              OPERATION
------------                  -----------              ---------

                              TO BE INITIALED BY BOTH PARTIES:

                              FRANCHISOR: ________   DEVELOPER: _______

                                       26
<PAGE>

                                   EXHIBIT B

                        Description of Development Area
                        -------------------------------

(The following are specifically excluded from the Development Area: military
bases, public transportation facilities, toll road plazas, universities,
recreational theme parks and the interior-structural confines of shopping
malls).

                        TO BE INITIALED BY BOTH PARTIES

                          FRANCHISOR: ________   DEVELOPER:_______

                                       27
<PAGE>

                                  EXHIBIT  C

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

                                       28
<PAGE>

                                                                   EXHIBIT 10.46

                      AMENDMENT TO DEVELOPMENT AGREEMENT
                     (Non-Exclusive Development Agreement)

     THIS AMENDMENT TO DEVELOPMENT AGREEMENT (this "Amendment") is made and
entered into this ____ day of ___________________, 2000 by and between SEATTLE'S
BEST COFFEE, L.L.C., a Washington limited liability company, with its principal
offices at Six Concourse Parkway, Suite 1700, Atlanta, Georgia  30328-5352
(hereinafter referred to as "Franchisor") and ANTON'S AIRFOODS, INC., a Virginia
corporation, with its principal offices at Ronald Reagan National Airport,
Washington, DC  20001 (hereinafter referred to as "Developer").

                             W I T N E S S E T H:
                             -------------------

     WHEREAS, Developer and Franchisor entered into a Seattle's Best Coffee
Development Agreement dated ___________, 2000 (hereinafter the "Development
Agreement"); and

     WHEREAS, Developer and Franchisor desire to amend the terms and conditions
of the Development Agreement as hereinafter set forth;

     NOW, THEREFORE, in consideration of the mutual covenants and conditions
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree to
amend the Development Agreement as follows:

     1.  This Amendment shall be attached to, incorporated in, and become a part
of, the Development Agreement.  The terms and conditions stated in this
Amendment, to the extent they are inconsistent with the terms and conditions
stated in the Development Agreement, shall prevail over the terms of the
Development Agreement.

     2.  Section 2.01 of the Development Agreement is hereby deleted in its
entirety and the following new provision is inserted in lieu thereof:

     "2.01.  Franchisor hereby grants the Developer, subject to the terms and
conditions of this Development Agreement and as long as Developer shall not be
in default of this Agreement or any other development, franchise or other
agreement between Developer and Franchisor, non-exclusive development rights to
obtain franchises to establish and operate      2     Franchised Units, and to
                                           ----------
use the SBC System solely in connection therewith, at specific locations to be
designated in separate franchise agreements ("Franchise Agreements"), executed
as provided in Section 3.01. hereof, and pursuant to the schedule set forth in
Exhibit A to this Agreement ("Development Schedule").  Each Franchised Unit
---------
developed pursuant hereto shall be located in the area described in Exhibit B
                                                                    ---------
hereto ("Development Area")."
<PAGE>

     3.  Section 2.02 of the Development Agreement is hereby deleted in its
entirety and the following new provision is inserted in lieu thereof:

         "2.02 This Agreement is non-exclusive. Franchisor retains the right at
         all times to establish or to license others to establish Franchised
         Units in the Development Area."

     4.  This Amendment and the documents referred to herein, constitute the
entire, full and complete agreement between Franchisor and Developer concerning
the subject matter hereof and supersede any and all prior agreements.  No other
representations have induced Developer to execute this Amendment, and there are
no representations, inducements, promises, or agreements, oral or otherwise,
between the parties not embodied herein which are of any force or effect with
reference to this Amendment or otherwise.  No amendment, change, or variance
from this Amendment shall be binding on either party unless executed in writing.

     5.  The Development Agreement and this Amendment shall be governed by the
laws of the State of Georgia, without regard to application of Georgia choice of
law rules.

     6.  The Development Agreement shall remain in full force and effect except
as specifically amended herein.

     IN WITNESS WHEREOF, the parties hereto intending to be legally bound hereby
have executed this Amendment in duplicate on the day and year first written.

WITNESS:                                FRANCHISOR:
                                        SEATTLE'S BEST COFFEE, L.L.C.

__________________________              By:_______________________________
                                              Kenneth S. Kaplan
                                              Its Authorized Agent and
                                              Assistant General Counsel

WITNESS:                                DEVELOPER:
                                        ANTON'S AIRFOODS, INC.

__________________________              By: ______________________________
                                              Patricia Miller Anton
                                              President

                                       2<PAGE>

                                                                   EXHIBIT 10.47

                                                                   Master - Base
                                                                           (SCC)
                                                                Revised 10/26/99

                             SEATTLE'S BEST COFFEE
                              FRANCHISE AGREEMENT

                                    BETWEEN

                          SEATTLE'S BEST COFFEE, LLC

                                      AND

                         ____________________________

                                                                Unit No.: ______
                                                           Dev. Agr. No.: ______
                                                          Dated: _______________

                                                         [_] Cafe      [_] Kiosk
<PAGE>

                          SEATTLE'S BEST COFFEE, LLC

                             SEATTLE'S BEST COFFEE

                              FRANCHISE AGREEMENT

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S>                                                                   <C>
1.        APPOINTMENT..............................................    1

2.        TERM.....................................................    2

III.      FEES.....................................................    4

IV.       ACCOUNTING AND RECORDS...................................    6

V.        PROPRIETARY MARKS........................................    7

VI.       OBLIGATIONS OF CORPORATE OR PARTNERSHIP FRANCHISEE.......    9

VII.      CONFIDENTIAL OPERATING STANDARDS MANUAL..................    9

VIII.     TRAINING.................................................   10

IX        DUTIES OF THE FRANCHISOR.................................   11

X.        DUTIES OF THE FRANCHISEE.................................   11

XI.       INSURANCE................................................   15

XII.      CONFIDENTIAL INFORMATION.................................   17

XII.      COVENANTS................................................   18

XIV.      TRANSFERABILITY OF INTEREST..............................   20

XV.       TERMINATION..............................................   22

XVI.      EFFECT OF TERMINATION OR EXPIRATION......................   25
</TABLE>

                                          i

<PAGE>

<TABLE>
<S>                                                                   <C>
XVII.     TAXES, PERMITS, AND INDEBTEDNESS.........................   26

XVIII.    INDEPENDENT CONTRACTOR AND INDEMNIFICATION...............   26

XIX.      APPROVALS AND WAIVERS....................................   28

XX.       NOTICES..................................................   28

XXI.      SEVERABILITY AND CONSTRUCTION............................   29

XXII.     ENTIRE AGREEMENT: SURVIVAL...............................   30

XXIII.    ACKNOWLEDGMENTS..........................................   30

XXIV.     APPLICABLE LAW: VENUE....................................   31

XXV.      CORPORATE FRANCHISEE.....................................   32
</TABLE>

EXHIBIT A - NOTICE OF COMMENCEMENT DATE

EXHIBIT B - SHAREHOLDERS OF FRANCHISEE

                                          ii
<PAGE>

                             SEATTLE'S BEST COFFEE
                              FRANCHISE AGREEMENT

     THIS AGREEMENT (the "Agreement") is made this _______ day of
_________________, 20___, by and between SEATTLE,S BEST COFFEE, LLC, a
Washington limited liability company, having its principal place of business at
1321 Second Avenue, Suite 200, Seattle, Washington 98101 ("Franchisor" or
"SEATTLE'S BEST COFFEE") and _________________________________
__________________________________________, [jointly and severally where more
than one], ("Franchisee").

                                  WITNESSETH:

     WHEREAS, Franchisor has developed and owns a unique and distinctive system
for the development, establishment and operation of retail Cafes ("SBC Cafes")
and Kiosks ("SBC Kiosks") (collectively, "SBC Retail Units") specializing in the
preparation and sale of specialty coffee beverages, proprietary coffee products
and other menu items developed and owned by Franchisor (the "Seattle's Best
Coffee System", "SBC System" or "System");

     WHEREAS, the distinguishing characteristics of the SBC System include,
without limitation, the name "SEATTLE'S BEST COFFEE"; distinctive interior and
exterior design and layouts, decor, color schemes, and furnishings; confidential
food formulae and recipes used in the preparation of food products, formulas and
specifications for preparing specialty coffee drinks and other coffee and non-
coffee-based products; specialized menus; standards and specifications for
equipment, equipment layouts, products, operating procedures, and management
programs, all of which may be changed, improved, and further developed by
Franchisor from time to time;

     WHEREAS, Franchisor identifies the SBC System by means of certain trade
names, service marks, trademarks, logos, emblems, and other indicia of origin,
including, but not limited to, the marks "SEATTLE'S BEST COFFEE", "SBC" and such
other trade names, service marks, trademarks and trade dress as are now, or may
hereafter, be designated by Franchisor for use in connection with the SBC System
(collectively referred to as the "Proprietary Marks");

     WHEREAS, Franchisor continues to develop, use, and control the use of such
Proprietary Marks in order to identify for the public the source of services and
products marketed thereunder in the SBC System and to represent the System's
high standards of quality, appearance, and service;

                                       1
<PAGE>

     WHEREAS, Franchisee wishes to be assisted, trained, and licensed by
Franchisor as an SBC franchisee and licensed to use, in connection therewith,
the SBC System and to continuously operate one SBC Retail Unit at the location
specified in Section 1.01 herein (the "Franchised Location");

     WHEREAS, Franchisee understands the importance of the SBC System and
SEATTLE'S BEST COFFEE's high and uniform standards of quality, cleanliness,
appearance, and service, and the necessity of opening and operating  SBC Retail
Units in conformity with the SBC System;

     NOW, THEREFORE, the parties hereto agree as follows:

I.   APPOINTMENT

     1.01.  Franchisor grants to Franchisee a franchise to open and operate an
SBC Unit  (the "Franchised Unit", or "Franchised Business") at one location
only, such location to be described as:

Store Number:  __________________________

Franchised
Location:      __________________________
               __________________________
               __________________________
               __________________________

Unit Format:   [_] SBC Cafe [_] SBC Kiosk

upon the terms and conditions herein contained and subject to the terms and
conditions contained in the development agreement between Franchisor and
Franchisee, dated ______________, (the "Development Agreement"), which is
incorporated herein by reference; and a license to use in connection therewith
Franchisor's Proprietary Marks and the SBC System. Franchisee may not operate
the Franchised Unit at any site other than the Franchised Location.

     1.02.  Except as otherwise set forth herein, (a) the franchise granted to
Franchisee under this Agreement is non-exclusive, and grants to Franchisee the
rights to establish and operate the Franchised Unit at only the specific
location set forth hereinabove, (b) no exclusive, protected or other territorial
rights in the contiguous area or market of such Franchised Unit or otherwise is
hereby granted or to be inferred and (c) Franchisor and/or its affiliates have
the right to operate and grant as many other franchises for the operation of SBC
Retail Units, anywhere in the world, as they shall, in their sole discretion,
elect. In addition to the foregoing, Franchisor may sell SBC brand coffee and
related coffee products

                                       2
<PAGE>

anywhere, including, but not limited to, sales on the Internet, by mail order,
or through wholesale distribution channels, including, but not limited to
independent coffee retailers, department stores, food marts, restaurants, cafes
and grocery stores, during and after the term of this Agreement ("Wholesale
Accounts"). Wholesale Accounts of Franchisor may, in return, sell SBC coffee and
related products under the same or different trademarks.

     1.03.  Nothing herein shall be deemed to be a grant to Franchisee of any
rights as a commercial agent or distributor of SBC Coffee and/or coffee products
in any jurisdiction. Franchisor reserves the right, in its sole discretion, to
grant such rights to any third party, during or after the term of this
Agreement. Franchisee may not sell any SBC Coffee Products (as defined herein)
and/or any other materials, supplies, or inventory bearing the Proprietary Marks
anywhere except at the SBC Retail Unit, without SBC's prior written consent.
Franchisee shall specifically be prohibited from selling any such items at
wholesale, except as specifically agreed to, in writing, by Franchisor. The
foregoing restriction shall not apply to catering events and/or the offer of
samples of SBC coffee products at or directly in front of the Franchised Unit.

     1.04.  Franchisee acknowledges that, over time, Franchisor has entered, and
will continue to enter, into franchise agreements with other franchisees that
may contain provisions, conditions and obligations that differ from those
contained in this Agreement, including, without limitation, franchise agreements
for the operation of SBC Retail Units. The existence of different forms of
agreement and the fact that Franchisor and other franchisees may have different
rights and obligations does not affect the parties' duty to comply with the
terms of this Agreement.

II.  TERM

     2.01.  Except as otherwise provided in this Agreement, the initial term of
this Franchise Agreement (the "Term") shall expire on the tenth (10th)
anniversary of the date of commencement of operation of the Franchised Unit. For
all purposes under this Agreement, the date of commencement of operation of the
Franchised Unit shall be the date verified in writing by Franchisor and
delivered to Franchisee in a form substantially similar to the "Notice" attached
hereto as Exhibit "A". Franchisee agrees and shall be obligated to operate the
Franchised Unit and perform hereunder for the full Term of this Agreement.

     2.02.  Franchisee may, at its option, renew this franchise for  one (1)
additional period of five (5) years, provided that, at the time of such renewal:

            A.   Franchisee gives Franchisor written notice of such election to
                 renew not less than six (6) months nor more than twelve (12)
                 months prior to the end of the then-current term. Failure by
                 Franchisee to timely provide Franchisor the required notice
                 constitutes a waiver by

                                       3
<PAGE>

                 Franchisee of its option to remain a franchisee beyond the
                 expiration of the Initial Term or the first Renewal Term;

            B.   Franchisee executes Franchisor's then-current standard form of
                 franchise agreement, which may include, without limitation, a
                 higher royalty fee and a higher advertising contribution, if
                 any, than that contained in this Agreement; and the term of
                 which shall be the renewal term as specified in Section 2.02.
                 hereof, but shall contain no further renewal rights;

            C.   Franchisee shall execute a general release and a covenant not
                 to sue, in a form satisfactory to Franchisor, of any and all
                 claims against Franchisor and its subsidiaries and affiliates,
                 and their respective past and present officers, directors,
                 shareholders, agents and employees, in their corporate and
                 individual capacities, including, without limitation, claims
                 arising under federal, state and local laws, rules and
                 ordinances, and claims arising out of, or relating to, this
                 Agreement, any other agreements between Franchisee and
                 Franchisor and Franchisee's operation of the Franchised Unit
                 and/or other SBC Retail Units operated by Franchisee;

            D.   Franchisee is not in default under this Agreement or any other
                 agreements between Franchisee and Franchisor (or any parent,
                 subsidiary or affiliate of Franchisor), and Franchisee has
                 fully and faithfully performed all of Franchisee's obligations
                 throughout the term of this Agreement; Franchisee is not in
                 default beyond the applicable cure period under any real estate
                 lease, equipment lease or financing instrument relating to the
                 Franchised Unit; Franchisee is not in default beyond the
                 applicable cure period with any vendor or supplier to the
                 Franchised Unit; and, Franchisee shall not have been in default
                 beyond the applicable cure period under this Agreement or any
                 other agreements between Franchisor and Franchisee more than 3
                 times during the period 12 months before the date of
                 Franchisee's notice and 12 months before the expiration of the
                 Initial Term;

            E.   Franchisee has paid or otherwise satisfied all monetary
                 obligations owed by Franchisee to Franchisor and its
                 subsidiaries and affiliates and any indebtedness of Franchisee
                 which is guaranteed by Franchisor, and Franchisee has timely
                 paid or otherwise satisfied these obligations throughout the
                 term of this Agreement;

                                       4
<PAGE>

            F.   Franchisee agrees, at its sole cost and expense, to reimage,
                 renovate, refurbish and modernize the Franchised Unit, within
                 the time frame required by Franchisor, including the building
                 design, parking lot, landscaping, equipment, signs, interior
                 and exterior decor items, fixtures, furnishings, trade dress,
                 color scheme, presentation of trademarks and service marks,
                 supplies and other products and materials to meet Franchisor's
                 then-current standards, specifications and design criteria for
                 SBC Retail Units , as contained in the then-current franchise
                 agreement, Confidential Operating Standards Manual (as defined
                 herein), or otherwise in writing, including, without
                 limitation, such structural changes, remodeling and
                 redecoration and such modifications to existing improvement as
                 may be necessary to do so;

            G.   Franchisee shall pay to Franchisor a renewal fee equal to fifty
                 percent (50%) of Franchisor's standard initial franchise fee in
                 effect at the date of renewal.

            H.   Franchisee and its employees at the Franchised Unit shall be in
                 compliance with the then-current SBC System training
                 requirements.

            I.   Franchisee has the right to remain in possession of the
                 premises of the Franchised Unit, or other premises acceptable
                 to Franchisor, for the Renewal Term and all monetary
                 obligations owed to Franchisee's landlord must be current.

     2.03.  As determined by Franchisor in its sole discretion, Franchisee has
operated the Franchised Unit in accordance with this Agreement and the SBC
System (as set forth in the Manual or otherwise in writing and as revised from
time to time) and has operated all of its other SBC Retail Units that are
franchised by Franchisor in accordance with the applicable franchise agreements.

III. FEES

     3.01.  In consideration of the franchise granted to Franchisee herein,
Franchisee shall pay to the Franchisor the following:

            A.   A franchise fee of ___________ Thousand Dollars ($_________)
                 payable upon execution of this Agreement by Franchisee, less
                 __________ Dollars ($________), representing the portion of the
                 Development Fee (as defined in the Development Agreement),
                 applicable to the Franchise Fee payable hereunder. Such
                 franchise

                                       5
<PAGE>

                fee shall be fully earned by Franchisor upon execution of this
                Agreement by Franchisee and is in addition to any development
                fees paid to Franchisor by Franchisee.

            B.  A recurring, non-refundable royalty fee of four percent (4%) of
                Gross Sales (as defined herein) during the term of this
                Agreement, payable weekly, on the Gross Sales of the preceding
                week (or on such other basis as may be set forth in the
                Confidential Operating Standards Manual (as defined herein) or
                otherwise agreed to in writing by Franchisor). Upon thirty (30)
                days prior written notice, Franchisor may require Franchisee to
                authorize Franchisor to make electronic debits from Franchisee's
                operating account as a means of paying the royalty fee.

     3.02.  In addition to the payments provided for in Section 3.01. hereof,
Franchisee, recognizing the value of advertising and the importance of the
standardization of advertising and promotion to the goodwill and public image of
the System, agrees to pay to the SEATTLE'S BEST COFFEE national creative and
production fund (the "NCP Fund") a recurring, non-refundable contribution ("NCP
Fund Contribution") in an amount to be determined by Franchisor, in its sole
discretion, up to three percent (3%) of the Gross Sales of the Franchised Unit,
payable weekly, for the preceding week (or on such other basis as may be set
forth in the Confidential Operating Standards Manual or otherwise agreed to in
writing by Franchisor). Upon thirty (30) days prior written notice, Franchisor
may require Franchisee to authorize Franchisor to make electronic debits from
Franchisee's operating account as a means of paying the Advertising Fund
Contribution. The NCP Fund Contribution shall be expended by the NCP Fund for
national, regional, and/or local advertising and promotional materials and
market research for the SBC System, under the following conditions and
limitations:

            A.  The NCP Fund, all contributions thereto, and any earnings
                thereon, shall be used exclusively to pay any and all costs of
                maintaining, administering, directing, producing and preparing
                market research, advertising, marketing materials and/or
                promotional activities for the SBC System. Franchisee shall pay
                the NCP Fund Contribution by separate check made payable to the
                NCP Fund. All sums paid by the Franchisee to the NCP Fund shall
                be maintained in an account separate from other funds of
                Franchisor and shall not be used to defray any of Franchisor's
                expenses except as provided herein, and as Franchisor may incur
                in activities reasonably related to the administration or
                direction of the NCP Fund and advertising and marketing programs
                for franchisees and the SBC System. The NCP Fund and its
                earnings shall not otherwise inure to the benefit of

                                       6
<PAGE>

               Franchisor. Franchisor shall maintain a separate bookkeeping
               account for the NCP Fund.

          B.   The selection of media and locale for media placement shall be at
               the sole discretion of the Franchisor.

          C.   All reasonable costs incurred by Franchisor or charged to
               Franchisor by third parties for market research and the
               production and dissemination of advertising, marketing and
               promotional materials may be charged to the NCP Fund.

          D.   Franchisor, upon request, shall provide Franchisee with an annual
               accounting of receipts and disbursements of the NCP Fund.

          E.   It is anticipated that all contributions to and earnings of the
               NCP Fund will be expended for market research, costs of creating
               and producing advertising materials, marketing and/or promotional
               purposes and reimbursement to Franchisor of costs directly
               related to the management of the NCP Fund (including personnel
               costs) during the taxable year in which contributions and
               earnings are received. If, however, excess amounts remain in the
               NCP Fund at the end of a taxable year, all expenditures in the
               following taxable year(s) shall be made first out of accumulated
               earnings from previous years, next out of earnings in the current
               year, and finally from contributions.

          F.   The NCP Fund is not, and shall not be, an asset of Franchisor.
               Although the NCP Fund is intended to be of perpetual duration,
               Franchisor maintains the right to terminate the NCP Fund;
               provided, however, that the NCP Fund shall not be terminated
               until all monies in the NCP Fund have been expended for the
               purposes stated herein.

          G.   Franchisee understands that such advertising and marketing is
               intended to maximize the public's awareness of SBC Retail Units
               and the SBC System, and that Franchisor accordingly undertakes no
               obligation to insure that any individual Franchisee benefits
               directly or on a pro rata basis from the placement, if any, of
               such advertising or marketing in its local market. Franchisee
               further acknowledges that its failure to derive any such benefit,
               whether directly or indirectly, shall not be cause for
               Franchisee's nonpayment or reduction of the required
               contributions to the NCP Fund.

                                       7
<PAGE>

     3.03.  If any monetary obligations owed by Franchisee to Franchisor and its
subsidiaries and affiliates are more than seven (7) days overdue, Franchisee
shall, in addition to such obligations, pay to Franchisor a sum equal to one and
one-half percent (1.5%) of the overdue balance per month, or the highest rate
permitted by law, whichever is less, from the date said payment is due.

     3.04.  For the purposes of this Agreement, the term "Gross Sales" shall
mean all revenues generated by Franchisee's business conducted upon, from or
with respect to the Franchised Unit, whether such sales are evidenced by cash,
check, credit, charge, account, barter or exchange. Gross Sales shall include,
without limitation, monies or credit received from the sale of food and
merchandise, from tangible property of every kind and nature, promotional or
otherwise, and for services performed from or at the Franchised Unit, including
without limitation such off-premises services as catering and delivery. Gross
Sales shall not include the sale of food or merchandise for which refunds have
been made in good faith to customers, the sale of equipment used in the
operation of the Franchised Unit, nor shall it include sales, meals, use or
excise tax imposed by a governmental authority directly on sales and collected
from customers; provided that the amount for such tax is added to the selling
price or absorbed therein, and is actually paid by Franchisee to such
governmental authority.

     3.05.  In addition to the payments otherwise provided for in Section 3.02,
above, Franchisee shall expend each month during the term of this Franchise
Agreement an amount equal to two percent (2%) of the Gross Sales of the
Franchised Unit for the preceding week, which sum shall be expended by
Franchisee for local advertising, which shall be conducted in a dignified manner
and shall conform to such standards and requirements as Franchisor may specify
(hereinafter the "Local Advertising Expenditure"). Franchisee shall not use any
advertising or promotional plans or materials unless and until Franchisee has
received written approval from Franchisor, pursuant to the procedures and terms
set forth in Section 10.09 hereof. Franchisee's Local Advertising Expenditure
shall be reduced by an amount equal to Franchisee's actual contribution, for the
corresponding period, to an Advertising Cooperative established pursuant to
Section 10.06 of this Agreement, if any.

     3.06.  In addition to the payments provided for in Sections 3.01, 3.02 and
3.05 hereof, Franchisee shall expend at least Seven Thousand and No/100 Dollars
($7,000.00) for grand opening advertising of the Franchised Unit during the
first two (2) months following the opening of the SBC Retail Unit, which
advertising must be approved, in advance, by Franchisor.

IV.  ACCOUNTING AND RECORDS

     4.01.  Accurate Books and Records.  During the Term of this Agreement,
            --------------------------
Franchisee shall maintain and preserve, for at least three (3) years from the
dates of their preparation,

                                       8
<PAGE>

full, complete and accurate books, records and accounts in accordance with
generally accepted accounting principles and in the form and the manner
prescribed by Franchisor from time-to-time in the Confidential Operating
Standards Manual or otherwise in writing. These records shall include, without
limitation, cash register sales tape (including non-resettable readings), meals,
sales and other tax returns, duplicate deposit slips and other evidence of Gross
Sales and all other business transactions.

     4.02.  Royalty Reports.  Franchisee shall submit to Franchisor, weekly
            ---------------
reports on forms prescribed by Franchisor, accurately reflecting all Gross Sales
during the preceding week and such other forms, reports, records, financial
statements or information as Franchisor may reasonably require in the
Confidential Operating Standards Manual, or otherwise in writing.   Even if
Franchisor requires Franchisee to implement an electronic cash register system
that transmits Franchisee's Gross Sales to Franchisor on a periodic basis,
Franchisor may still require Franchisee to submit written reports.

     4.03.  Quarterly Statement.  Franchisee shall, at its expense, submit to
            -------------------
Franchisor quarterly, within thirty (30) days following the end of each quarter
during the Term hereof, an unaudited financial statement with such detail as
Franchisor may reasonably require (hereinafter, "Quarterly Statement") together
with a certificate executed by Franchisee stating that such financial statement
is true and accurate.  Upon Franchisor's request, Franchisee shall submit to
Franchisor, with each Quarterly Statement, copies of any state or local sales
tax returns ("Sales Tax Returns") filed by Franchisee for the period included in
the Quarterly Statement.  In the event Franchisee prepares financial statements
on the basis of thirteen (13), four (4) week periods ("Periods"), the Quarterly
Statements shall be submitted within thirty (30) days following the end of the
third (3rd), sixth (6th), ninth (9th) and thirteenth (13th) Periods.

     4.04.  Annual Financial Statements.  Franchisee shall, at its expense,
            ---------------------------
submit to Franchisor within ninety (90) days following the end of each calendar
or fiscal year during the Term of this Agreement, an unaudited financial
statement for the preceding calendar or fiscal year with such detail and in a
format as Franchisor may reasonably require, together with a certificate
executed by Franchisee certifying that such financial statement is true and
accurate (hereinafter, "Annual Financial Statements") and such other information
in such form as Franchisor may reasonably require. Upon written request from
Franchisor, the foregoing Annual Financial Statement shall include both a profit
and loss statement and a balance sheet, and shall be prepared in accordance with
generally accepted accounting principles. In the event Franchisee defaults under
this Agreement, Franchisor may require, upon written notice to Franchisee, that
all Annual Financial Statements submitted thereafter include a "Review Report"
prepared by an independent Certified Public Accountant.

     4.05.  Other Reports.  Franchisee shall also submit to Franchisor, for
            -------------
review or auditing, such other forms, financial statements, reports, records,
information and data as

                                       9
<PAGE>

Franchisor may reasonably designate, in the form and at the times and places
reasonably required by Franchisor, upon request and as specified from time-to-
time in the Confidential Operating Standards Manual or otherwise in writing. If
Franchisee has combined or consolidated financial information relating to the
Franchised Unit with that of any other business or businesses, including a
business licensed by Franchisor, Franchisee shall simultaneously submit to
Franchisor, for review or auditing, the forms, reports, records and financial
statements (including, but not limited to the Quarterly Statements and Annual
Financial Statements) which contain the detailed financial information relating
to the Franchised Unit, separate and apart from the financial information of
such other businesses. Franchisee hereby authorizes all of its suppliers and
distributors to release to Franchisor, upon Franchisor's request, any and all of
its books, records, accounts or other information relating to goods, products
and supplies sold to Franchisee and/or the Franchised Unit.

     4.06.  Equipment.  Franchisee shall record all sales on cash registers or
            ---------
other point-of-sale equipment approved, in writing, by Franchisor (hereinafter
"POS Equipment").  Franchisee agrees that Franchisor shall have the free and
unfettered right to retrieve any data and information from Franchisee's P.O.S.
Equipment and computers as Franchisor, in its sole discretion, deems
appropriate, with the telephonic cost of the retrieval to be borne by
Franchisor, including electronically polling the daily sales, menu mix and other
data of the Franchised Unit.

     4.07.  Franchisor's Right of Audit.   Franchisor or its designated agents
            ---------------------------
or auditors shall have the right at all reasonable times to audit, review and
examine by any means, including electronically through the use of
telecommunications devices or otherwise, at its expense, the books, records,
accounts, and tax returns of Franchisee related to the Franchised Unit. If any
such audit, review or examination reveals that Gross Sales have been understated
in any report to Franchisor, Franchisee shall immediately pay to Franchisor the
royalty fee and NCP Fund Contribution due with respect to the amount understated
upon demand, in addition to interest from the date such amount was due until
paid, at the rate of one and one-half percent (1.5%) per month. If any such
understatement exceeds two percent (2%) of Gross Sales as set forth in the
report, Franchisee shall, in addition, upon demand, reimburse Franchisor for any
and all costs and expenses connected with such audit, review or examination
(including, without limitation, reasonable accounting and attorneys' fees). The
foregoing remedies shall be in addition to any other rights and remedies
Franchisor may have.

V.   PROPRIETARY MARKS

     5.01.  It is understood and agreed that the franchise granted herein to use
Franchisor's Proprietary Marks applies only to use in connection with the
operation of the Franchised Unit franchised in this Agreement at the location
designated in Section I hereof, and includes only such Proprietary Marks as are
now designated or which may hereafter be

                                       10
<PAGE>

designated, in the Confidential Operating Standards Manual or otherwise in
writing as a part of the SBC System (which might or might not be all of the
Proprietary Marks pertaining to the System owned by the Franchisor), and does
not include any other mark, name, or indicia of origin of Franchisor now
existing or which may hereafter be adopted or acquired by Franchisor.

     5.02.  With respect to Franchisee's use of the Proprietary Marks pursuant
to this Agreement, Franchisee acknowledges and agrees that:

            A.  Franchisee shall not use the Proprietary Marks as part of
                Franchisee's corporate or other business name;

            B.  Franchisee shall not hold out or otherwise use the Proprietary
                Marks to perform any activity or incur any obligation or
                indebtedness in such manner as might, in any way, make
                Franchisor liable therefor, without Franchisor's prior written
                consent;

            C.  Franchisee shall execute any documents and provide such other
                assistance deemed necessary by Franchisor or its counsel to
                obtain protection for the Proprietary Marks or to maintain the
                continued validity of such Proprietary Marks; and

            D.  Franchisor reserves the right to substitute different
                Proprietary Marks for use in identifying the System and the
                franchised businesses operating thereunder, and Franchisee
                agrees to immediately substitute Proprietary Marks upon receipt
                of written notice from Franchisor.

     5.03.  Franchisee expressly acknowledges Franchisor's exclusive right to
use the marks "SEATTLE'S BEST COFFEE" and "SBC" for restaurant services, coffee
products, and other related food and beverage products; the building
configuration; and the other Proprietary Marks of the System. Franchisee agrees
not to represent in any manner that it has any ownership in the Proprietary
Marks or the right to use the Proprietary Marks except as provided in this
Agreement. Franchisee further agrees that its use of the Proprietary Marks shall
not create in its favor any right, title, or interest in or to the Proprietary
Marks, and that all of such use shall inure to the benefit of Franchisor.

     5.04.  Franchisee acknowledges that the use of the Proprietary Marks
outside the scope of this license, without Franchisor's prior written consent,
is an infringement of Franchisor's exclusive right to use the Proprietary Marks,
and during the term of this Agreement and after the expiration or termination
hereof, Franchisee covenants not to, directly or indirectly, commit an act of
infringement or contest or aid in contesting the

                                       11
<PAGE>

validity or ownership of Franchisor's Proprietary Marks, or take any other
action in derogation thereof.

     5.05.  Franchisee shall promptly notify Franchisor of any suspected
infringement of, or challenge to, the validity of the ownership of, or
Franchisor's right to use, the Proprietary Marks licensed hereunder.  Franchisee
acknowledges that Franchisor has the right to control any administrative
proceeding or litigation involving the Proprietary Marks.  In the event
Franchisor undertakes the defense or prosecution of any litigation relating to
the Proprietary Marks, Franchisee agrees to execute any and all documents and to
do such acts and things as may, in the opinion of counsel for Franchisor, be
necessary to carry out such defense or prosecution.  Except to the extent that
such litigation is the result of Franchisee's use of the Proprietary Marks in a
manner inconsistent with the terms of this Agreement, Franchisor agrees to
reimburse Franchisee for its out of pocket costs in doing such acts and things,
except that Franchisee shall bear the salary costs of its employees.

     5.06.  Franchisee understands and agrees that its license with respect to
the Proprietary Marks is non-exclusive to the extent that Franchisor has and
retains the right under this Agreement:

            A.   To grant other licenses for the Proprietary Marks, in addition
                 to those licenses already granted to existing franchisees;

            B.   To develop and establish other franchise systems for the same,
                 similar, or different products or services utilizing
                 proprietary marks not now or hereafter designated as part of
                 the System licensed by this Agreement, and to grant licenses
                 thereto, without providing Franchisee any right therein; and

            C.   To develop and establish other systems for the sale, at
                 wholesale or retail, of similar or different products utilizing
                 the same or similar Proprietary Marks, without providing
                 Franchisee any right therein.

     5.07.  Franchisee acknowledges and expressly agrees that any and all
goodwill associated with the System and identified by the Proprietary Marks used
in connection therewith shall inure directly and exclusively to the benefit of
Franchisor and is the property of Franchisor, and that upon the expiration or
termination of this Agreement or any other agreement, no monetary amount shall
be assigned as attributable to any goodwill associated with any of Franchisee's
activities in the operation of the Franchised Unit granted herein, or
Franchisee's use of the Proprietary Marks.

     5.08.  Franchisee understands and acknowledges that each and every detail
of the SBC System is important to Franchisee, Franchisor, and other franchisees
in order to

                                       12
<PAGE>

develop and maintain high and uniform standards of quality and services, and
hence to protect the reputation and goodwill of SBC Retail Units. Accordingly,
Franchisee covenants:

            A.   To operate and advertise the Franchised Unit, at Franchisee's
                 own expense, under the name "SEATTLE'S BEST COFFEE," without
                 prefix or suffix;

            B.   To adopt and use the Proprietary Marks licensed hereunder
                 solely in the manner prescribed by Franchisor;

            C.   To observe such reasonable requirements with respect to
                 trademark registration notices as Franchisor may from time to
                 time direct in the Confidential Operating Standards Manual or
                 otherwise in writing.

     5.09.  In order to preserve the validity and integrity of the Proprietary
Marks licensed herein and to assure that Franchisee is properly employing the
same in the operation of the Franchised Unit, Franchisor or its agents shall at
all reasonable times have the right to inspect Franchisee's operations,
premises, and Franchised Unit and make periodic evaluations of the services
provided and the products sold and used therein.  Franchisee shall cooperate
with Franchisor's representatives in such inspections and render such assistance
to the representatives as may reasonably be requested.

     5.10.  Franchisee shall not hold out or otherwise employ the Proprietary
Marks to perform any activity, or to incur any obligation or indebtedness in
such a manner as might, in any way, make Franchisor liable therefor, without
Franchisor's prior written consent.

VI.  OBLIGATIONS OF CORPORATE OR PARTNERSHIP FRANCHISEE

     6.01.  If Franchisee, or any successor to or assignee of Franchisee, is a
corporation, or limited liability company:

            A.   Franchisee shall furnish to Franchisor, upon execution or any
                 subsequent transfer of this Agreement, a copy of the
                 Franchisee's Articles of Incorporation, Certificate of
                 Incorporation, Bylaws and a list of shareholders showing the
                 percentage interest of each, and shall thereafter promptly
                 furnish Franchisor with a copy of any and all amendments or
                 modifications thereto;

            B.   Franchisee shall promptly furnish Franchisor, on a regular
                 basis, with certified copies of such corporate records (or
                 limited liability company records) material to the Franchised
                 Business as Franchisor

                                       13
<PAGE>

                 may require from time to time in the Confidential Operating
                 Standards Manual or otherwise in writing; and

            C.   Franchisee shall maintain stop-transfer instructions against
                 the transfer, on its records, of any securities with voting
                 rights, subject to the restrictions of this Agreement, and each
                 stock certificate of the corporate Franchisee representing each
                 share of stock, shall have conspicuously endorsed upon it the
                 following legend:

                         "The transfer of this stock is subject to the
                         terms and conditions of a SEATTLE'S BEST
                         COFFEE Franchise Agreement with SEATTLE'S
                         BEST COFFEE, LLC dated ___________. Reference
                         is made to the provisions of said Franchise
                         Agreement and to the Articles and By-Laws of
                         this corporation."

     6.02.  If the Franchisee, or any successor to or assignee of Franchisee, is
a partnership, limited partnership or limited liability partnership, Franchisee
shall furnish to Franchisor, upon execution or any subsequent transfer of this
Agreement, a copy of Franchisee's Articles of Partnership, if any, and
Partnership Agreement, and shall thereafter promptly furnish Franchisor with a
copy of any and all amendments or modifications thereto.

     6.03.  Franchisee shall, upon execution of this Agreement, furnish to
Franchisor a completed Statement of  Legal Composition attached as Exhibit C
hereto as to all the parties with an ownership interest in Franchisee, the
amount of such ownership interests, the jurisdiction in which Franchisee is
legally incorporated or organized, and other information specified.  Franchisee
shall thereafter furnish to Franchisor an updated Statement of Legal Composition
promptly when requested by Franchisor.  Franchisee shall promptly advise
Franchisor of any change in such information.  Franchisee warrants, represents,
and covenants to Franchisor that all of the information furnished in the
completed Statement of Legal Composition is true and correct as of the date of
this Agreement, and when subsequently furnished to Franchisor.

VII. CONFIDENTIAL OPERATING STANDARDS MANUAL.

     7.01.  In order to protect the reputation and goodwill of Franchisor and
the SBC System and to maintain uniform standards of operation under Franchisor's
Proprietary Marks, Franchisee shall conduct the Franchised Business in
accordance with Franchisor's Confidential Operating Standards Manual
(hereinafter, together with any other manuals created or approved for use in the
operation of the Franchised Business granted herein, and all amendments and
updates thereto, the "Manual").

                                       14
<PAGE>

       7.02.  Franchisee shall at all times treat the Manual, and the
information contained therein, as confidential, and shall use all reasonable
efforts to keep such information secret and confidential. Franchisee shall not,
at any time, without Franchisor's prior written consent, copy, duplicate,
record, or otherwise make the Manual available to any unauthorized person or
entity.

       7.03.  The Manual shall at all times remain the sole property of
Franchisor.

       7.04.  In order for Franchisee to benefit from new knowledge information,
methods and technology adopted and used by Franchisor in the operation of the
System, Franchisor may from time-to-time revise the Manual and Franchisee agrees
to adhere to and abide by all such revisions.

       7.05.  Franchisee agrees at all times to keep its copy of the Manual
current and up-to-date, and in the event of any dispute as to the contents of
Franchisee's Manual, the terms of the master copy of the Manual maintained by
Franchisor at Franchisor's home office, shall be controlling.

       7.06.  The Manual is intended to further the purposes of this Agreement,
and is specifically incorporated, by reference, into this Agreement.  Except as
otherwise set forth in this Agreement, in the event of a conflict between the
terms of this Agreement and the terms of the Manual, the terms of this Agreement
shall control.

VIII.  TRAINING

       8.01.  Franchisee, a partner of Franchisee if Franchisee is a
partnership, or a principal shareholder of Franchisee if Franchisee is a
corporation (or a principal member of Franchisee if Franchisee is a limited
liability company), must complete, to Franchisor's satisfaction, the SEATTLE'S
BEST COFFEE New Franchisee Orientation Program ("NFOP") prior to opening the
first franchised SBC Retail Unit operated by Franchisee. NFOP shall consist of
up to five (5) days of workshops and seminars conducted at a training facility
and designated by Franchisor.

       8.02.  In addition to completing the NFOP, Franchisee (or a partner,
principal shareholder or principal member of Franchisee), and up to two (2)
designated management employees of Franchisee (and, in all instances, a senior
management employee of Franchisee responsible for daily operations of the
Franchised Unit), must attend and complete, to Franchisor's satisfaction, the
SEATTLE'S BEST COFFEE Cafe management training program ("CMT"), prior to opening
the Franchised Unit.  The exact number of Franchisee's management employees
required to attend and complete CMT shall be determined by Franchisor in its
sole discretion, but in no event shall the number be less than one (1).  CMT

                                       15
<PAGE>

shall consist of up to six (6) weeks of in-store Cafe operations training at a
facility designated by Franchisor (a "Certified Training Facility") and certain
self-directed study programs.  A management employee of Franchisee that
successfully completes CMT, shall be certified by Franchisor as an "CMT
Certified Manager".

     8.03.  Franchisee shall maintain the number of CMT Certified Managers
designated by the Franchisor in the employ of the Franchised Unit throughout the
term of this Agreement, which in no event shall be less than one (1).  In the
event that Franchisee or any CMT Certified Manager ceases active employment at
the Franchised Unit, Franchisee must enroll a qualified replacement in the CMT
program within thirty (30) days of cessation of such individual's employment.
The replacement employee shall attend and complete the next regularly scheduled
CMT program to Franchisor's satisfaction.

     8.04.  The cost of conducting the initial NFOP and Certified Management
Trainer ("CMT") programs (instruction and required materials) shall be borne by
Franchisor.  All other expenses during NFOP and CMT, including meals and
lodging, wages and travel, shall be borne by Franchisee.

     8.05.  Franchisor reserves the right to test any and all CMT Certified
Managers at any time, and may require such individuals to attend and complete
additional training at a training facility designated by Franchisor, and at
Franchisee's sole cost and expense, in the event they fail to achieve a
satisfactory score on such test.  Additionally, Franchisor may make available to
Franchisee or Franchisee's employees, from time to time, such additional
training programs as Franchisor, in its sole discretion, may choose to conduct.
Attendance at said training programs may be mandatory.  The cost of conducting
such additional training programs (instruction and required materials) shall be
borne by Franchisor.  All other expenses during the training period, including
meals and lodging, wages and travel, shall be borne by the Franchisee.

IX.  DUTIES OF THE FRANCHISOR

     9.01.  Franchisor will make available to Franchisee standard plans and
specifications to be utilized only in the construction of the Franchised Unit.
No modification to or deviations from the standard plans and specifications may
be made without the written consent of Franchisor.  Franchisee shall obtain, at
its expense, further qualified architectural and engineering services to prepare
surveys, site and foundation plans, and to adapt the standard plans and
specifications to applicable local or state laws, regulations or ordinances.
Franchisee shall bear the cost of preparing plans containing deviations or
modifications from the standard plans.

     9.02.  Franchisor shall provide consultation and advice to Franchisee as
Franchisor deems appropriate with regard to construction or renovation and
operation of the Franchised

                                       16
<PAGE>

Unit, building layout, furnishings, fixtures and equipment plans and
specifications, employee selection and training, purchasing and inventory
control and those other matters as Franchisor deems appropriate.

     9.03.  Franchisor will make available to Franchisee such continuing
advisory assistance in the operation of the Franchised Business, in person or by
electronic or written bulletins made available from time to time, as Franchisor
may deem appropriate.

     9.04.  Franchisor, in its sole discretion, may provide opening assistance
to Franchisee at the Franchised Unit.

     9.05.  Franchisor will loan one (1) copy of the Manual to Franchisee for
the duration of this Agreement, which the Manual contains the standards,
specifications, procedures and techniques of the SBC System.

     9.06.  Franchisor will continue its efforts to maintain high and uniform
standards of quality, cleanliness, appearance and service at all SBC Retail
Units, to protect and enhance the reputation of the SBC System and the demand
for the products and services of the System.  Franchisor will establish uniform
criteria for approving suppliers; make every reasonable effort to disseminate
its standards and specifications to prospective suppliers of the Franchisee upon
the written request of the Franchisee, provided that Franchisor may elect not to
make available to prospective suppliers the standards and specifications for
such food formulae or equipment designs deemed by Franchisor in its sole
discretion to be confidential; and may conduct periodic inspections of the
premises and evaluations of the products used and sold at the Franchised Unit
and in all other SBC Retail Units.

     9.07.  Franchisor will provide training to Franchisee as set forth in
Article VIII hereof.

X.   DUTIES OF THE FRANCHISEE

     Franchisee understands and acknowledges that every detail of the System is
important to Franchisor, Franchisee and other franchisees in order to develop
and maintain high and uniform operating standards, to increase the demand for
SEATTLE'S BEST COFFEE products and services, and to protect the reputation and
goodwill of Franchisor.  Accordingly, Franchisee agrees that:

     10.01. Franchisee shall maintain, at all times during the term of this
Agreement, at Franchisee's expense, the premises of the Franchised Unit and all
fixtures, furnishings, signs, systems and equipment (hereinafter "improvements")
thereon or therein, in conformity with Franchisor's high standards and public
image and to make such additions, alterations, repairs,

                                       17
<PAGE>

and replacements thereto (but no others, without Franchisor's prior written
consent) as may be required by Franchisor, including but not limited to the
following:

            A.   To keep the Franchised Unit in the highest degree of sanitation
                 and repair, including, without limitation, such periodic
                 repainting, repairs or replacement of impaired equipment, and
                 replacement of obsolete signs, as Franchisor may reasonably
                 direct;

            B.   To meet and maintain the highest governmental standards and
                 ratings applicable to the operation of the Franchised Business;

            C.   At its sole cost and expense, to complete a full reimaging,
                 renovation, refurbishment and modernization of the Franchised
                 Unit, within the time frame required by Franchisor, including
                 the building design, parking lot, landscaping, equipment,
                 signs, interior and exterior decor items, fixtures,
                 furnishings, trade dress, color scheme, presentation of
                 trademarks and service marks, supplies and other products and
                 materials, to meet Franchisor's then-current standards,
                 specifications and design criteria for SBC Retail Units,
                 including without limitation, such structural changes,
                 remodeling and redecoration and such modifications to existing
                 improvements as may be necessary to do so (hereinafter, a
                 "Franchised Unit Renovation"). Franchisee shall not be required
                 to perform a Franchised Unit Renovation if there are less than
                 three (3) years remaining on the term of this Agreement, and/or
                 the lease for the premises occupied by the Franchised Unit.
                 Nothing herein shall be deemed to limit Franchisee's other
                 obligations, during the term of this Agreement, to operate the
                 Franchised Unit in accordance with Franchisor's standards and
                 specifications for the SBC System, including, but not limited
                 to, the obligations set forth in this Section X.

     10.02. Franchisee shall operate the Franchised Unit in conformity with such
uniform recipes, methods, standards, and specifications as Franchisor may from
time to time prescribe in the Manual or otherwise in writing, to insure that the
highest degree of quality, service and cleanliness is uniformly maintained and
to refrain from any deviation therefrom and from otherwise operating in any
manner which reflects adversely on Franchisor's name and goodwill or on the
Proprietary Marks, and in connection therewith:

            A.   To maintain in sufficient supply, and use at all times, only
                 such ingredients, products, materials, supplies, and paper
                 goods as conform to Franchisor's standards and specifications,
                 and to refrain

                                       18
<PAGE>

                 from deviating therefrom by using non-conforming items, without
                 Franchisor's prior written consent;

            B.   To sell or offer for sale only proprietary "Seattle's Best
                 Coffee" brand coffee products and such other products and menu
                 items that have been expressly approved for sale in writing by
                 Franchisor, meet Franchisor's uniform standards of quality and
                 quantity and as have been prepared in accordance with
                 Franchisor's methods and techniques for product preparation; to
                 sell or offer for sale the minimum menu items specified in the
                 Manual or otherwise in writing; to refrain from any deviation
                 from Franchisor's standards and specifications for serving or
                 selling the menu items, without Franchisor's prior written
                 consent; and to discontinue selling or offering for sale such
                 items as Franchisor may, in its discretion, disapprove in
                 writing at any time;

            C.   To use the premises of the Franchised Unit solely for the
                 purpose of conducting the business franchised hereunder, and to
                 conduct no other business or activity thereon, whether for
                 profit or otherwise, without Franchisor's prior written
                 consent;

            D.   To keep the Franchised Unit open and in normal operation during
                 such business hours as Franchisor may prescribe in the Manual
                 or otherwise in writing;

            E.   To permit Franchisor or its agents, at any time during ordinary
                 business hours, to remove from the Franchised Unit samples of
                 any ingredients, products, materials, supplies, and paper goods
                 used in the operation of the Franchised Unit, without payment
                 therefor, in amounts reasonably necessary for testing by
                 Franchisor or an independent laboratory, to determine whether
                 such samples meet Franchisor's then-current standards and
                 specifications. In addition to any other remedies it may have
                 under this Agreement, Franchisor may require Franchisee to bear
                 the cost of such testing if any such ingredient, products,
                 materials, supplier or paper goods have been obtained from a
                 supplier not approved by Franchisor, or if the sample fails to
                 conform to Franchisor's specifications;

            F.   To purchase, install and construct, at Franchisee's expense,
                 all improvements furnishings, signs and equipment specified in
                 the approved standard plans and specifications, and such other
                 furnishings, signs or equipment as Franchisor may reasonably
                 direct

                                       19
<PAGE>

                 from time to time in the Manual or otherwise in writing; and to
                 refrain from installing or permitting to be installed on or
                 about the premises of the Franchised Unit, without Franchisor's
                 written consent, any improvements, furnishings, signs or
                 equipment not first approved in writing as meeting Franchisor's
                 standards and specifications;

            G.   To comply with all applicable federal, state and local laws,
                 regulations and ordinances pertaining to the operation of the
                 Franchised Business; and

            H.   Franchisee shall grant Franchisor and its agents the right to
                 enter upon the premises of the Franchised Unit at any time
                 during ordinary business hours for the purpose of conducting
                 inspections; cooperate with Franchisor's representatives in
                 such inspections by rendering such assistance as they may
                 reasonably request; and, upon notice from Franchisor or its
                 agents, and without limiting Franchisor's other rights under
                 this Agreement, take such steps as may be necessary immediately
                 to correct the deficiencies detected during any such
                 inspection, including, without limitation, immediately
                 desisting from the further use of any equipment, promotional
                 materials, products, or supplies that do not conform with
                 Franchisor's then-current specifications, standards, or
                 requirements.

     10.03. To maintain the quality and distinct characteristics of fine
specialty coffee flavors that customers associate with the SBC System and the
Proprietary Marks, Franchisee shall offer and sell only Seattle's Best Coffee
brand coffee and coffee products at or from the Franchised Unit and must
purchase all of its coffee and coffee products from Franchisor or its designee
("SBC Coffee Products"), and prepare all coffee products at the Franchised Unit
using Franchisor's proprietary recipes and methods of operation. Franchisor will
sell SBC Coffee Products to Franchisee on standard purchase terms that may vary
from time to time, F.O.B. Franchisor's designated distribution center, with all
freight, duties and shipping charges at Franchisee's sole cost and expense.
Franchisor will give prior notice of any material changes in purchase terms.

     10.04. Franchisee shall (i) purchase all other ingredients, products,
materials, supplies, and other items required in the operation of the Franchised
Unit which are or incorporate trade-secrets of Franchisor, as designated by
Franchisor ("Trade-Secret Products") only from Franchisor or suppliers
designated by Franchisor.

     10.05. Franchisee shall purchase all other ingredients, products,
materials, supplies, paper goods, and other items required for the operation of
the Franchised Business, except

                                       20
<PAGE>

SBC Coffee Products and Trade-Secret Products, solely from suppliers who
demonstrate, to the continuing reasonable satisfaction of Franchisor, the
ability to meet Franchisor's reasonable standards and specifications for such
items; who possess adequate quality controls and capacity to supply Franchisee's
needs promptly and reliably; and who have been approved in writing by Franchisor
and such approval has not thereafter been revoked. If Franchisee desires to
purchase any such items from an unapproved supplier, Franchisee shall submit to
Franchisor a written request for approval, or shall request the supplier itself
to seek approval. Franchisor shall have the right to require, as a condition of
its approval, that its representatives be permitted to inspect the supplier's
facilities, and that samples from the supplier be delivered, at Franchisor's
option, either to Franchisor or to an independent laboratory designated by
Franchisor for testing prior to granting approval. A charge not to exceed
Franchisor's reasonable cost of inspection and the actual cost of testing shall
be paid by the supplier or Franchisee. Franchisor reserves the right, at its
option, to reinspect the facilities and products of any such approved supplier
from time to time and to revoke its approval upon failure of such supplier to
continue to meet any of the foregoing criteria.

     10.06.      Advertising Cooperative.  Franchisor shall have the right, in
                 -----------------------
its sole discretion, to designate any geographic area (which may consist of any
portion of a country or jurisdiction and/or more than one country or
jurisdiction) for the purposes of establishing an advertising cooperative
("Cooperative").

            A.   If a Cooperative has been established in the
                 geographic area in which the Franchised Unit is
                 located, Franchisee shall become a member of such
                 Cooperative upon commencement of operation of the
                 Franchised Unit, if the Cooperative is in existence
                 at that time or no later than thirty (30) days after
                 the date on which the Cooperative commences
                 operation. In no event shall Franchisee be required
                 to be a member of more than one Cooperative with
                 respect to the Franchised Unit.

            B.   If a Cooperative has been established, Franchisee
                 shall contribute an amount, to be determined by the
                 Cooperative, which shall be not more than two percent
                 (2%) of the Gross Sales of the Franchised Unit,
                 payable each week, for the preceding week (or such
                 other period as may be set forth, in writing, by the
                 Cooperative).

            C.   Each Cooperative shall be organized and governed in a
                 form and manner, and shall commence operations on a
                 date, approved in advance by Franchisor in writing.

                                       21
<PAGE>

                 (1)  Each Cooperative shall be organized
                      for the exclusive purpose of
                      administering regional advertising
                      programs and developing, subject to
                      Franchisor's approval, standardized
                      promotional materials for use by its
                      members in local advertising.

                 (2)  No advertising or promotional plans or
                      materials may be used by a Cooperative
                      or furnished to its members without
                      the prior approval of the Franchisor,
                      pursuant to the procedures and terms
                      set forth in Section 10.09 hereof.

                 (3)  Franchisee shall pay its required
                      contribution to the Cooperative each
                      week on Gross Sales for the preceding
                      week, together with such other
                      statements or reports as may be
                      required by Franchisor, or by the
                      Cooperative with the Franchisor's
                      prior written approval.

            D.   Franchisor, in its sole discretion, may grant an
                 exemption to any franchisee for any length of time
                 from the requirement of membership in a Cooperative,
                 and/or from the obligation to contribute thereto
                 (including a reduction, deferral or waiver of such
                 contribution), upon written request of such
                 franchisee stating reasons supporting such exemption.
                 Franchisor's decision concerning such request for
                 exemption shall be final. If an exemption is granted
                 to a franchisee, such franchisee shall be required to
                 expend on local advertising, during each Period, the
                 same amount as would otherwise be assessed by the
                 Cooperative, as set forth in Section 10.06 B hereof.

     10.07.      Franchisor disclaims all express or implied warranties
concerning any approved products or services, including, without limitation, any
warranties as to merchantability, fitness for a particular purpose,
availability, quality, pricing or profitability. Franchisee acknowledges that
Franchisor may, under appropriate circumstances, receive fees, commissions,
field-of-use license royalties, or other consideration from approved suppliers
based on sales to franchisees, and that Franchisor may charge non-approved
suppliers reasonable testing or inspection fees.

                                       22
<PAGE>

     10.08.  All local advertising by Franchisee shall be in such media, and of
such type and format as Franchisor may approve; shall be conducted in a
dignified manner; and shall conform to such standards and requirements as
Franchisor may specify.  Franchisee shall not use any advertising or promotional
plans or materials unless and until Franchisee has received written approval
from Franchisor, pursuant to the procedures and terms set forth in Section 10.09
hereof.

     10.09.  All advertising and promotional plans proposed to be used by
Franchisee or the Cooperative, where applicable, except such plans and materials
that have been previously approved by Franchisor shall be submitted to
Franchisor for Franchisor's written approval (except with respect to prices to
be charged) prior to any use thereof.  Franchisor shall use its best efforts to
complete its review of Franchisee's proposed advertising and promotional plans
within fifteen (15) days after Franchisor receives such plans.  If written
approval is not received by Franchisee or the Cooperative from Franchisor within
fifteen (15) days after receipt by Franchisor of such plans, Franchisor shall be
deemed to have disapproved such plans.

     10.10.  Franchisee shall, at Franchisor's request, require all of its
supervisory employees, as a condition of their employment, to execute an
agreement prohibiting them, during the term of their employment or thereafter,
from communicating, divulging, or using for the benefit of any person, persons,
partnership, association, corporation or other entity any confidential
information, trade secrets, knowledge, or know-how concerning the SBC System or
methods of operation of the Franchised Unit which may be acquired as a result of
their employment with Franchisee or other franchisees.  A duplicate original of
each such agreement shall be provided by Franchisee to Franchisor immediately
upon execution.

     10.11.  If Franchisee operates more than five (5) Franchised Units,
Franchisee shall have a supervisor, which may be Franchisee, to supervise and
coordinate the operation of the Franchised Units (hereinafter, a "Supervisor").
In addition to the foregoing, Franchisee shall employ an additional Supervisor
upon the opening of Franchisee's sixth (6th) Franchised Unit and upon the
opening of each successive fifth (5th) Franchised Unit thereafter.  Each
Supervisor shall attend and successfully complete the CMT program set forth in
Section 8.02 hereof prior to assuming any supervisory responsibilities and shall
meet such other standards as Franchisor may reasonably impose.  No Supervisor
may have supervisory responsibility for more than five (5) Franchised Units.

     10.12.  If at any time the Franchised Unit is proposed to be operated by an
entity or individual other than the Franchisee, Franchisor reserves the right to
review and approve the operating entity or individual and to require and approve
an operating agreement prior to such party's assumption of operations.
Franchisor may, in its sole discretion, reject either the operating entity, the
individual operator or the operating agreement.  If approved by Franchisor, the
operating entity and/or individual shall agree in writing to comply with all

                                       23
<PAGE>

of Franchisee's obligations under the Franchise Agreement as though such party
were the franchisee designated therein, on such form as may be designated by
Franchisor. The operation of the Franchised Unit by any party other than
Franchisee, without Franchisor's prior written consent, shall be deemed a
material default of this Agreement for which Franchisee may terminate this
Agreement pursuant to the provisions of Section 15.02 hereof.

     10.13.  Franchisee shall become a member of any purchasing cooperative
established by Franchisor for the SEATTLE'S BEST COFFEE System and shall remain
a member in good standing thereof  throughout the term of this Agreement and
shall pay all reasonable membership fees assessed by such purchasing
association.

     10.14.  Franchisee shall, within  thirty (30) days from  receipt of
written notice from Franchisor, at its sole cost and expense,  purchase and
install at the Franchised Unit and/or at Franchisee's principal business office
such computer hardware and software equipment, required dedicated telephone and
power lines, modems, printers and other computer related accessory and
peripheral equipment as Franchisor specifies in the Manual or otherwise in
writing  (the "Required Computer Equipment").  The Required Computer Equipment
shall include  telecommunications devices and  may include a single software
program or set of programs, all of which must be obtained in accordance with the
Franchisor's standards and specifications. The Required Computer Equipment shall
permit 24 hour per day electronic communications  between Franchisor and
Franchisee including access to the internet and Franchisor's current  intranet,
or any successor thereto. Franchisee shall only be required to purchase and
install the Required Computer Equipment at one, central  location, which shall
satisfy the conditions of this Section 10.02 (or its equivalent) for all
Franchised Units operated by Franchisee, provided information for all Franchise
Units is maintained at such location.

     10.15   Franchisee shall comply with all other requirements set forth in
this Agreement.

XI.  INSURANCE

     11.01.  Insurance Program.  Franchisee shall procure, prior to commencement
             -----------------
of construction of the Franchised Unit, and shall maintain in full force and
effect during the Term of this Agreement at Franchisee's expense, an insurance
policy or policies protecting Franchisee and Franchisor, and their officers,
directors, agents and employees, against any loss, liability, or expense
whatsoever from personal injury, death or property damage or casualty,
including, fire, lightning, theft, vandalism, malicious mischief, and other
perils normally included in an extended coverage endorsement arising from,
occurring upon or in connection with the construction, operation or occupancy of
the Franchised Unit, as Franchisor may reasonably require for its own and
Franchisee's protection.

                                       24
<PAGE>

     11.02.  Insurance Requirements.  Such policy or policies shall be written
             ----------------------
by an insurance company satisfactory to Franchisor, and shall include, at a
minimum the following coverage:

             A.  Workers' Compensation Insurance, with statutory limits as
                 -------------------------------
                 required by the laws and regulations applicable to the
                 employees of Franchisee who are engaged in the performance of
                 their duties relating to the Franchised Unit, including any
                 pre-opening training programs, as well as such other insurance
                 as may be required by statute or regulation of the state in
                 which the Franchised Unit is located.

             B.  Employer's Liability Insurance, for employee bodily injuries
                 ------------------------------
                 and deaths, with a limit of $500,000 each accident.

             C.  Comprehensive or Commercial General Liability Insurance,
                 -------------------------------------------------------
                 covering claims for bodily injury, death and property damage,
                 including Premises and Operations, Independent Contractors,
                 Products and Completed Operations, Personal Injury,
                 Contractual, and Broadform Property Damage liability coverages,
                 with limits as follows:

                 Occurrence/Aggregate Limit of $1,000,000 for bodily injury,
                 death and property damage each occurrence and $2,000,000 for
                 general aggregate or

                 Split liability limits of:  $1,000,000  for bodily injury per
                                                         person
                                             $1,000,000  for bodily injury per
                                                         occurrence
                                             $  500,000  for property damage

             D.  Comprehensive Automobile Liability Insurance, if applicable,
                 --------------------------------------------
                 covering owned, non-owned and hired vehicles, with limits as
                 follows:

                 Combined Single Limit of $500,000 for bodily injury, death and
                 property damage per occurrence or

                 Split liability limits of:

                    $500,000  for bodily injury per person
                    $500,000  for bodily injury per occurrence
                    $250,000  for property damage

                                       25
<PAGE>

             E.  All Risk Property Insurance, on a replacement cost basis, with
                 ---------------------------
                 limits as appropriate, covering the real property of Franchisee
                 and any real property which the Franchisee may be obligated to
                 insure by contract.  Such real property may including building,
                 machinery, equipment, furniture, fixtures and inventory.

     11.03.  All such policies of insurance shall provide that the same shall
not be canceled, modified or changed without first giving thirty (30) days prior
written notice thereof to Franchisor.  No such cancellation, modification or
change shall affect Franchisee's obligation to maintain the insurance coverages
required by this Agreement.  Except for Workers' Compensation Insurance,
Franchisor shall be named as an Additional Insured on all such required
policies.  All liability insurance policies shall be written on an "occurrence"
policy form.  Franchisee shall be responsible for payment of any and all
deductibles from insured claims under its policies of insurance.  Franchisee
shall not satisfy the requirements of this Article XI unless and until
certificates of such insurance, including renewals thereof, have been delivered
to and approved by Franchisor.  Franchisee shall not self-insure any of the
insurance coverages required by this Agreement, or non-subscribe to any State's
applicable workmen's compensation laws without the prior written consent of
Franchisor.  Franchisor shall have the right, at any time during the term of
this Agreement to increase the minimum limits of insurance coverage or otherwise
modify the insurance requirements of this Agreement upon written notice in the
Manual or as otherwise prescribed by Franchisor in writing.  If Franchisee shall
fail to comply with any of the insurance requirements herein, upon written
notice to Franchisee by Franchisor, Franchisor may, without any obligation to do
so, procure such insurance and Franchisee shall pay Franchisor, upon demand, the
cost thereof plus interest at the maximum rate permitted by law, and a
reasonable administrative fee designated by Franchisor.

     11.04.  Insurance Obtained by Franchisee Shall Be Primary to Franchisor's
             -----------------------------------------------------------------
Own Insurance.  Franchisee agrees that all insurance policies obtained by
--- ---------
Franchisee pursuant to Sections 11.01 and 11.02 shall be primary coverage, the
applicable limits of which shall be exhausted before any benefits (defense or
indemnity) may be obtained under any other insurance (including self-insurance)
providing coverage to Franchisor. In the event payments are required to be made
under Franchisor's own insurance policies or self-insurance (whether for defense
or indemnity) before the applicable coverage limits for the insurance policies
obtained by Franchisee are exhausted, then Franchisee hereby agrees to
reimburse, hold harmless and indemnify the Franchisor and its insurers for such
payments. Franchisee shall notify its insurers of this Agreement and shall use
best efforts to obtain an endorsement on each policy it obtains pursuant to
Sections 11.01 and 11.02 stating as follows:

             The applicable limits of this policy shall be applied and exhausted
             before any benefits may be obtained (whether for defense or

                                       26
<PAGE>

             indemnity) under any other insurance (including self-insurance)
             that may provide coverage to Franchisor. All insurance coverage
             obtained by Franchisor shall be considered excess insurance with
             respect to this policy, the benefits of which excess insurance
             shall not be available until the applicable limits of this policy
             are exhausted.

     11.05.  No Limitation on Coverage.  Franchisee's obligation to obtain and
             -------------------------
maintain the foregoing policy or policies of insurance in the amounts specified
shall not be limited in any way by reason of any insurance which may be
maintained by Franchisor, nor shall Franchisee's performance of that obligation
relieve it of liability under the indemnity provisions set forth in Section
XVIII of this Agreement.

     11.06.  Issuance of Insurance.  Franchisee must obtain the insurance
             ---------------------
required by this Agreement no later than fifteen (15) days before the date on
which any construction is commenced.  The Franchised Unit shall not be opened
for business prior to Franchisor's receipt of satisfactory evidence that all
insurance required by this Agreement is in effect.  Upon obtaining such
insurance, and on each policy renewal date thereafter, Franchisee shall promptly
submit evidence of satisfactory insurance and proof of payment therefor to
Franchisor, together with, upon request, copies of all policies and policy
amendments.  The evidence of insurance shall include a statement by the insurer
that the policy or policies will not be canceled or materially altered without
at least thirty (30) days prior written notice to Franchisor.

XII. CONFIDENTIAL INFORMATION

     12.01.  Franchisee shall not, during the term of this Agreement or
thereafter, communicate, divulge, or use for the benefit of any other person,
persons, partnership, association, corporation or other entity, any confidential
information, knowledge or know-how concerning the construction and methods of
operation of the Franchised Business which may be communicated to Franchisee, or
of which Franchisee may be apprised, by virtue of Franchisee's operation under
the terms of this Agreement.  Franchisee shall divulge such confidential
information only to such employees of Franchisee as must have access to it in
order to exercise the franchise rights granted hereunder and to establish and
operate the Franchised Unit pursuant hereto and as Franchisee may be required by
law, provided Franchisee shall give Franchisor prior written notice of any such
required disclosure immediately upon receipt of notice by Franchisee in order
for Franchisor to have the opportunity to seek a protective order or take such
other actions as it deems appropriate under the circumstances.

     12.02.  Any and all information, knowledge, and know-how, including,
without limitation, drawings, materials, equipment, recipes, prepared mixtures
or blends of spices or other food products, and other data, which Franchisor
designates as confidential, and any

                                       27
<PAGE>

information, knowledge, or know-how which may be derived by analysis thereof,
shall be deemed confidential for purposes of this Agreement, except information
which Franchisee can demonstrate came to Franchisee's attention prior to
disclosure thereof by Franchisor; or which, at the time of disclosure thereof by
Franchisor to Franchisee, had become a part of the public domain, through
publication or communication by others; or which, after disclosure to Franchisee
by Franchisor, becomes a part of the public domain, through publication or
communication by others.

XIII.  COVENANTS

       13.01.  Franchisee covenants that, during the term of the Agreement,
except as otherwise approved in writing by Franchisor, Franchisee or,
alternatively, one designated management employee if that employee assumes
primary responsibility for the operation of the Franchised Unit, shall devote
full time, energy and best efforts to the management and operation of the
Franchised Business.

       13.02.  Franchisee acknowledges that, pursuant to this Agreement,
Franchisee will receive valuable specialized training and confidential
information, including without limitation, information regarding the
operational, sales, promotional, and marketing methods, procedures and
techniques of Franchisor and the System.  Franchisee covenants that, during the
term of this Agreement, Franchisee (who, unless otherwise specified, shall
include, for purposes of this Section XIII, collectively and individually, (i)
all officers, directors and holders of a beneficial interest of five percent
(5%) or more of the securities with voting rights of Franchisee and of any
corporation, directly or indirectly controlling Franchisee, if Franchisee is a
corporation,; (ii) the general partner and any limited partners, including any
corporation, and the officers, directors and holders of a beneficial interest of
five percent (5%) or more of securities with voting rights of a corporation
which controls, directly or indirectly, any general or limited partner, if
Franchisee is a partnership; and (iii) any members and managers and holders of a
beneficial interest of five percent (5%) or more of securities with voting
rights of any corporation which controls directly or indirectly, any limited
liability company) shall not, either directly or indirectly, for itself or on
behalf of, or in conjunction with, any person, persons, partnership, limited
liability company, association or corporation or other entity:

               A.   Divert or attempt to divert any business or customer of the
                    business franchised hereunder to any competitor by direct or
                    indirect inducements or otherwise, or to do or perform,
                    directly or indirectly, any other act injurious or
                    prejudicial to the goodwill associated with Franchisor's
                    Proprietary Marks and the SBC System;

               B.   Employ or seek to employ any person who is, at that time,
                    employed by Franchisor or by any other SEATTLE'S BEST COFFEE

                                       28
<PAGE>

                    franchisee, or otherwise, directly or indirectly, induce
                    such person to leave his or her employment therewith; or

               C.   Own, maintain, operate, engage in, or have any interest in
                    any business that prepares, offers, sells, roasts and/or
                    distributes specialty coffee products and/or any product or
                    service substantially similar to those sold within the
                    SEATTLE'S BEST COFFEE System (a "Specialty Coffee Shop");
                    provided, however, that the term "Specialty Coffee Shop"
                    shall not apply to any business operated by Franchisee under
                    a franchise agreement with Franchisor or an affiliate of
                    Franchisor. During the term of this Agreement, there is no
                    geographical limitation on this restriction.

     13.03.    Franchisee covenants that Franchisee shall not, regardless of the
cause for termination, either directly or indirectly, for itself, or through, on
behalf of, or in conjunction with any person, persons, partnership, limited
liability company, association, corporation or other entity:

               A.   For a period of two (2) years following the termination or
                    expiration of this Agreement, own, maintain, engage in, or
                    have any interest in any Specialty Coffee Shop which is
                    located within a radius of ten (10) miles of the location
                    specified in Section I hereof, or the location of any other
                    SBC Retail Unit under the SBC System, whether owned by
                    Franchisor or any other SBC franchisee, which is in
                    existence as of the date of expiration or termination of
                    this Agreement; or

               B.   For a period of one (1) year following the termination or
                    expiration of this Agreement, employ or seek to employ any
                    person who is, at the time, employed by Franchisor or by any
                    other SEATTLE'S BEST COFFEE franchisee, or otherwise,
                    directly or indirectly, induce such person to leave his or
                    her employment therewith.

     13.04.    At Franchisor's request, Franchisee shall require and obtain
execution of covenants similar to those set forth in this Section XIII
(including covenants applicable upon the termination of a person's relationship
with Franchisee) in a form satisfactory to Franchisor, including, without
limitation, specific identification of  Franchisor as a third party beneficiary
of such covenants with the independent right to enforce them, from any or all of
the following persons:

               A.   All managers and assistant managers of the Franchised Unit,
                    and any other personnel employed by Franchisee who have
                    received or will receive training from Franchisor;

                                       29
<PAGE>

               B.   All officers, directors, and holders of a direct or indirect
                    beneficial ownership interest of five percent (5%) or more
                    in Franchisee.

The failure of Franchisee to obtain execution of a covenant required by this
Section 13.04 shall constitute a material breach of this Agreement.  A duplicate
original of each such covenant shall be provided by Franchisee to Franchisor
immediately upon execution.

     13.05.    The parties agree that each of the foregoing covenants shall be
construed as independent of any other covenant or provision of this Agreement.
If all or any portion of a covenant in this Section XIII, is held unreasonable
or unenforceable by a court or agency having jurisdiction in a final decision,
Franchisee expressly agrees to be bound by any lesser covenant subsumed within
the terms of such covenant that imposes the maximum duty permitted by law, as if
the resulting covenant was separately stated in and made a part of this Section
XIII.

               A.   Right to Reduce Covenants.  Franchisee understands and
                    -------------------------
                    acknowledges that Franchisor shall have the right, in its
                    sole discretion, to reduce the scope of any covenant set
                    forth in Sections 13.02 and 13.03 of this Agreement, or any
                    portion thereof, without Franchisee's consent, effective
                    immediately upon receipt by Franchisee of written notice
                    thereof, and Franchisee agrees that it shall comply with any
                    covenant as so modified, which shall be fully enforceable
                    notwithstanding the provisions of Section XXII hereof.

               B.   Injunctive Relief.  The parties acknowledge that it will be
                    -----------------
                    difficult to ascertain with any degree of certainty the
                    amount of damages resulting from a breach by Franchisee of
                    any of the covenants contained in this Section XIII. It is
                    further agreed and acknowledged that any violation by
                    Franchisee of any of said covenants will cause irreparable
                    harm to Franchisor. Accordingly, Franchisee agrees that upon
                    proof of the existence of a violation of any of said
                    covenants, Franchisor will be entitled to injunctive relief
                    against Franchisee in any court of competent jurisdiction
                    having authority to grant such relief, together with all
                    costs and reasonable attorney's fees incurred by Franchisor
                    in bringing such action.

                                       30
<PAGE>

XIV. TRANSFERABILITY OF INTEREST

     14.01.  Transfer by Franchisor.  This Agreement shall inure to the benefit
             ----------------------
of the successors and assigns of Franchisor.  Franchisor shall have the right,
without Franchisee's consent, to transfer or assign its interest in this
Agreement to any person, persons, partnership, association, corporation, or
other entity and Franchisee agrees promptly to execute any documents in
connection therewith.  If Franchisor's assignee assumes all the obligations of
Franchisor hereunder and sends Franchisee written notice of the assignment so
attesting, Franchisee agrees promptly to execute a general release of
Franchisor, and any affiliates of Franchisor, from claims or liabilities of
Franchisor under this Agreement.

     14.02.  Transfer by Franchisee.  Franchisee understands and acknowledges
             ----------------------
that the rights and duties set forth in this Agreement are personal to
Franchisee, and that Franchisor has granted this Agreement in reliance on
Franchisee's business skill and financial capacity.  Accordingly, neither (i)
Franchisee, nor (ii) any immediate or remote successor to Franchisee, nor (iii)
any individual, partnership, corporation or other legal entity which directly or
indirectly owns any interest in the Franchisee or in this Franchise Agreement,
shall sell, assign, transfer, convey, donate, pledge, mortgage, or otherwise
encumber any direct or indirect interest in this Agreement or in any legal
entity which owns the Franchised Business without the prior written consent of
Franchisor.  Acceptance by Franchisor of any royalty fee, advertising fee or any
other amount accruing hereunder from any third party, including, but not limited
to any proposed transferee, shall not constitute Franchisor's approval of such
party as a transferee or the transfer of this Franchise Agreement to such party.
Any purported assignment or transfer, by operation of law or otherwise, not
having the written consent of Franchisor, shall be null and void, and shall
constitute a material breach of this Agreement, for which Franchisor may then
terminate without opportunity to cure pursuant to Section 15.02 E of this
Agreement.

     14.03.  Conditions for Consent.  Franchisor shall not unreasonably withhold
             ----------------------
its consent to any transfer referred to in Section 14.02 hereof, when requested;
provided, however, that prior to the time of transfer;

             A.   All of Franchisee's accrued monetary obligations to Franchisor
                  and its subsidiaries and affiliates shall have been satisfied;

             B.   Franchisee shall have agreed to remain obligated under the
                  covenants contained in Section XIII hereof as if this
                  Agreement had been terminated on the date of the transfer;

             C.   The transferee must be of good moral character and reputation,
                  in the reasonable judgment of the Franchisor;

                                       31
<PAGE>

          D.   The Franchisor shall have determined, to its satisfaction,
               that the transferee's qualifications meet the Franchisor's
               then current criteria for new franchisees;

          E.   Franchisee and transferee shall execute a written assignment, in
               a form satisfactory to Franchisor, pursuant to which the
               transferee shall assume all of the obligations of Franchisee
               under this Agreement and  Franchisee shall unconditionally
               release any and all claims Franchisee might have against
               Franchisor as of the date of the assignment;

          F.   The transferee shall execute the then-current form of SEATTLE'S
               BEST COFFEE Franchise Agreement and such other then-current
               ancillary agreements as Franchisor may reasonably require.  The
               then-current form of Franchise Agreement may have significantly
               different provisions including, without limitation, a higher
               royalty fee and advertising contribution than that contained in
               this Agreement.  The then-current form of Franchise Agreement
               will expire on the expiration date of this Agreement and will
               contain the same renewal rights, if any, as are available to
               Franchisee herein;

          G.   The transferee shall agree at its sole cost and expense, to (i)
               complete a Franchised Unit Renovation (as defined in Section
               10.01.C herein), within the time frame required by Franchisor,
               unless a Franchised Unit Renovation was completed within three
               (3) years prior to the date of the transfer and (ii) perform such
               other scope of work as may be determined by Franchisor.

          H.   The transferee and such other individuals as may be designated by
               Franchisor in the Manual or otherwise in writing, must have
               successfully completed the SBC training course then in effect for
               new SBC franchisees.  If the Franchised Unit is the transferee's
               first SBC Retail Unit, the transferee shall pay to Franchisor the
               then-standard Training Fee;

          I.   If the transferee is a partnership or limited liability company,
               the partnership agreement or limited liability company
               organizational documents shall provide that further assignments
               or transfers of any interest in the partnership or limited
               liability company, respectively, are subject to all restrictions
               imposed upon assignments and transfers in this Agreement;

                                       32
<PAGE>

          J.   Franchisee shall, at Franchisor's option and request, execute a
               written guarantee of the transferee's obligations under the
               Agreement, which guarantee shall not exceed a period of three (3)
               years from the date of transfer; and all principals of the
               transferee shall also guarantee Franchisee's obligations
               hereunder, and

          K.   The Franchisee or transferee shall pay to Franchisor a transfer
               processing fee of Two Thousand Five Hundred Dollars ($2,500), to
               cover Franchisor's administrative expenses in connection with the
               transfer and a training fee in the amount of Five Thousand
               Dollars ($5,000); however no additional franchise fee shall be
               charged by Franchisor for a transfer.  If the transferee is (i) a
               corporation or limited liability company formed by Franchisee for
               the convenience of ownership and in which the Franchisee is the
               sole shareholder or limited liability company member, or (ii) an
               existing Franchisee under this Agreement, no transfer processing
               fee and/or training fee shall be required.

   14.04. Grant of Security Interest.  Franchisee shall grant no security
          --------------------------
interest in this Agreement, the Franchised Business, or in any of its assets
unless the secured party agrees that, in the event of any default by Franchisee
under any documents related to the security interest (i) Franchisor shall be
provided with notice of default and given a reasonable time within which to cure
said default, (ii) Franchisor shall have the right and option to be substituted
as obligor to the secured party and to cure any default of Franchisee or to
purchase the rights of the secured party upon payment of all sums then due to
such secured party, except such amounts which may have become due as a result of
any acceleration of the payment dates based upon the Franchisee's default, and
(iii) the secured party shall agree to such other requirements as Franchisor, in
its sole discretion, deems reasonable and necessary to protect the integrity of
the Proprietary Marks and the SEATTLE'S BEST COFFEE System.

   14.05. Transfer on Death or Mental Incapacity.  Upon the death or mental
          --------------------------------------
incapacity of any person with an interest in this Agreement, the Franchised
Business or Franchisee, the executor, administrator, or personal representative
of such person shall transfer his interest to a third party approved by
Franchisor within twelve (12) months after such death or mental incapacity.
Such transfer, including, without limitation, transfer by devise or inheritance,
shall be subject to the same conditions as any inter vivos transfer.  However,
                                               ----- -----
in the case of transfer by devise or inheritance, if the heirs or beneficiaries
of any such person are unable to meet the conditions in this Section XIV, the
personal representative of the deceased Franchisee shall have a reasonable time,
but in no event more than eighteen (18) months from Franchisee's death, to
dispose of the deceased's interest in this Agreement and the business conducted
pursuant hereto, which disposition shall be subject to all the terms and

                                       33
<PAGE>

conditions for assignments and transfers contained in this Agreement.  If the
interest is not disposed of within twelve (12) or eighteen (18) months,
whichever is applicable, Franchisor may terminate this Agreement.

     14.06.  Right of First Refusal.  Any party holding an interest in this
             ----------------------
Agreement, the Franchised Business or in Franchisee, and who desires to accept a
bona fide offer from a third party to purchase such interest, shall notify
---- ----
Franchisor in writing of such offer within ten (10) days of receipt of such
offer, and shall provide such information and documentation relating to the
offer as Franchisor may require.  Franchisor shall have the right and option,
exercisable within thirty (30) days after receipt of such written notification,
to send written notice to the seller that Franchisor intends to purchase the
seller's interest on the same terms and conditions offered by the third party.
In the event that Franchisor elects to purchase the seller's interest, closing
on such purchase must occur within sixty (60) days from the date of notice to
the seller of the election to purchase by Franchisor.  Any material change in
the terms of any offer prior to closing shall constitute a new offer subject to
the same rights of first refusal by Franchisor as in the case of an initial
offer.  Failure of Franchisor to exercise the option afforded by this Section
14.06 shall not constitute a waiver of any other provisions of this Agreement,
including all of the requirements of this Section XIV, with respect to a
proposed transfer.

     In the event the consideration, terms, and/or conditions offered by a third
party are such that Franchisor may not reasonably be required to furnish the
same consideration, terms, and/or conditions, then Franchisor may purchase the
interest in this Agreement, Franchisee, or the Franchised Business proposed to
be sold for the reasonable equivalent in cash.  If the parties cannot agree
within a reasonable time as to the reasonable equivalent in cash of the
consideration, terms, and/or conditions offered by the third party, an
independent appraiser shall be designated by Franchisor, and his determination
shall be binding upon the parties.

     14.07.  Offerings by Franchisee.  Securities or partnership interests in
             -----------------------
Franchisee may be offered to the public, by private offering or otherwise, only
with the prior written consent of Franchisor, which consent shall not be
unreasonably withheld.  All materials required for such offering by applicable
federal or state law shall be submitted to Franchisor for review prior to their
being filed with any governmental agency; and any materials to be used in any
exempt offering shall be submitted to Franchisor for review prior to their use.
No offering of such securities shall imply (by use of the Proprietary Marks or
otherwise) that Franchisor is participating in the underwriting, issuance, or
offering of securities by Franchisee; and Franchisor's review of any offering
shall be limited solely to the subject of the relationship between Franchisee
and Franchisor.  Franchisee and the other participants in the offering shall
fully indemnify Franchisor in connection with the offering.  For each proposed
offering, Franchisee shall pay to Franchisor a non-refundable fee of Five
Thousand Dollars ($5,000), or such greater amount as is necessary to reimburse
Franchisor for its reasonable costs and

                                       34
<PAGE>

expenses associated with reviewing the proposed offering, including, without
limitation, legal and accounting fees. Franchisee shall give Franchisor written
notice at least sixty (60) days prior to the date of commencement any offering
or other transaction covered by this Section 14.07.

XV.  TERMINATION

     15.01.  Franchisee shall be deemed to be in default under this Agreement,
and all rights granted herein shall automatically terminate without notice to
Franchisee, if Franchisee shall become insolvent or make a general assignment
for the benefit of creditors; if a petition in bankruptcy is filed by Franchisee
or such a petition is filed against Franchisee and not opposed by Franchisee; or
if Franchisee is adjudicated bankrupt or insolvent; or if a receiver or other
custodian (permanent or temporary) of Franchisee's assets or property, or any
part thereof, is appointed by any court of competent jurisdiction; or if
proceedings for a composition with creditors under the applicable law of any
jurisdiction should be instituted by Franchisee or against Franchisee and not
opposed by Franchisee; or if a final judgment remains unsatisfied or of record
for thirty (30) days or longer (unless a supersedeas bond is filed or other
steps are taken to stay effectively the enforcement of such judgment in the
relevant jurisdiction); or if Franchisee is dissolved; or if execution is levied
against Franchisee's property or business; or if suit to foreclose any lien or
mortgage against the premises or equipment of the Franchised Unit is instituted
against the Franchisee and not dismissed within thirty (30) days; or if the real
or personal property of any other SBC Retail Unit operated by Franchisee shall
be sold after levy thereon by any sheriff, marshal, or constable.

     15.02.  Franchisee shall be deemed to be in default and Franchisor may, at
its option, terminate this Agreement and all rights granted hereunder without
affording Franchisee any opportunity to cure the default (effective immediately
upon receipt of notice by Franchisee as described in Section XX hereof) upon the
occurrence of any of the following events:

             A.   If Franchisee fails to complete construction of the Franchised
                  Unit and opens for business within one hundred eighty (180)
                  days of execution of this Agreement. Franchisor may, in its
                  sole discretion, extend this period to address unforeseen
                  construction delays, not within the control of Franchisee.

             B.   If Franchisee at any time ceases to operate the Franchised
                  Unit or otherwise abandons the Franchised Unit, or loses the
                  right to possession of the premises of the Franchised Unit, or
                  otherwise forfeits the right to do or transact business in the
                  jurisdiction where the Franchised Unit is located; provided,
                  however, that if, through no fault of Franchisee, the premises
                  are damaged or destroyed by an

                                       35
<PAGE>

               event not within the control of Franchisee such that repairs or
               reconstruction cannot be completed within one hundred eighty
               (180) days thereafter, then Franchisee shall have thirty (30)
               days after such event in which to apply for Franchisor's approval
               to relocate and/or reconstruct the premises, which approval shall
               not be unreasonably withheld, but may be conditioned upon the
               payment of an agreed minimum royalty to Franchisor during the
               period in which the Franchised Unit is not in operation;

          C.   If Franchisee is convicted of or pleads guilty to a felony, a
               crime involving moral turpitude, or any other crime or offense
               that Franchisor believes is reasonably likely to have an adverse
               effect on the System, the Proprietary Marks, the goodwill
               associated therewith, or Franchisor's interest therein;

          D.   If a threat or danger to public health or safety results from the
               construction, maintenance, or operation of the Franchised Unit;

          E.   If Franchisee, or any partner, shareholder or member of
               Franchisee purports to transfer any rights or obligations under
               this Agreement or any interest in Franchisee to any third party
               without Franchisor's prior written consent, contrary to the terms
               of Section XIV hereof;

          F.   If Franchisee fails to comply with the in-term covenants in
               Section 13.02 hereof or fails to obtain execution of the
               covenants required under Sections 10.10 or 13.04 hereof;

          G.   If, contrary to the terms of Section VII hereof, Franchisee
               discloses or divulges the contents of the Manual or any other
               confidential information provided to Franchisee by Franchisor;

          H.   If an approved transfer is not effected as required by Section
               14.05 hereof, following the death or mental incapacity of a
               person described therein;

          I.   If Franchisee knowingly maintains false books or records, or
               submits any false reports to Franchisor;

          J.   If Franchisee or any individual, group, association, limited or
               general partnership, corporation or other business entity which
               directly or indirectly controls, is controlled by, or is under
               common control with Franchisee; or which directly or indirectly
               owns, controls, or holds

                                       36
<PAGE>

               power to vote ten percent (10%) or more of the outstanding voting
               securities of Franchisee; or which has in common with Franchisee
               one or more partners, officers, directors, trustees, branch
               managers, or other persons occupying similar status or performing
               similar functions ("Affiliate") commits any act of default under
               any other Franchise Agreement, Development Agreement (except for
               failure to meet the development schedule thereunder), asset
               purchase agreement, promissory note or any other agreement
               entered into by Franchisee or an Affiliate of Franchisee, and
               Franchisor, or any parent, subsidiary, affiliate, predecessor or
               successor to Franchisor;

          K.   If Franchisee, after or during a default pursuant to Section
               15.03 hereof, commits the same default again, whether or not such
               default is cured after notice; or

          L.   If Franchisee defaults more than once in any twelve (12) month
               period under Section 15.03 hereof for failure to substantially
               comply with any of the requirements imposed by this Agreement,
               whether or not cured after notice.

          M.   If Franchisee refuses to permit Franchisor or its agents to enter
               upon the premises of the Franchised Unit to conduct any periodic
               inspection as set forth in Sections 5.09 and 10.02 H hereof.

          N.   If Franchisee uses any of Franchisor's Proprietary Marks in any
               unauthorized manner or is otherwise in default of the provisions
               of Section V hereof.

          O.   Franchisor discovers that Franchisee made a material
               misrepresentation or omitted a material fact in the information
               that was furnished to Franchisor in connection with its decision
               to enter into this Agreement.

          P.   Franchisee knowingly falsifies any report required to be
               furnished Franchisor or makes any material misrepresentation in
               its dealings with Franchisor or fails to disclose any material
               facts to Franchisor.

          Q.   There is a material breach of any representation or warranty set
               forth in this Agreement.

          R.   If Franchisee, at any time, offers for sale from the franchised
               Unit any coffee products and/or beverages other than SBC Coffee
               Products.

                                       37
<PAGE>

     15.03.  Except as provided in Sections 15.01 and 15.02 of this Agreement,
upon any default by Franchisee which is susceptible of being cured, Franchisor
may terminate this Agreement only by giving written Notice of Termination
stating the nature of such default to Franchisee at least ten (10) days prior to
the effective date of termination if the default is for failure to pay
royalties, NCP Fund Contributions (including Cooperative Contributions, if any
are due, and/or any other financial obligations owed to Franchisor by
Franchisee), and thirty (30) days, prior to the effective date of termination
for any other default, provided, however, that Franchisee may avoid termination
by curing such default to Franchisor's satisfaction within the ten (10) day or
thirty (30) day period, as applicable. If any such default is not cured within
the specified time, this Agreement shall terminate without further notice to
Franchisee effective immediately upon the expiration of the ten (10) day or
thirty (30) day period, as applicable, or such longer period as applicable law
may require. Notwithstanding anything to the contrary set forth in this
Agreement, Franchisee hereby acknowledges that any agreement between Franchisee
and Franchisor relating to past due amounts accruing hereunder, (an "Arrearage
Agreement"), including, but not limited to any promissory note, payment plan or
amendment to this agreement shall be deemed to be a material part of this
agreement and shall be incorporated herein by reference. A default under any
Arrearage Agreement shall be deemed a material default of this Franchise
Agreement, regardless of the reason Franchisee fails to pay the amount which is
the subject of such Arrearage Agreement.

     15.04.  Franchisee shall indemnify and hold Franchisor harmless for all
costs, expenses and any losses incurred by Franchisor in enforcing the
provisions hereof, or in upholding the propriety of any action or determination
by Franchisor pursuant to this Agreement, or in defending any claims made by
Franchisee against Franchisor, or arising in any manner from Franchisee's breach
of or failure to perform any covenant or obligation hereunder, including,
without limitation, reasonable litigation expenses and attorney's fees incurred
by Franchisor in connection with any threatened or pending litigation relating
to any part of this Agreement, unless Franchisee shall be found, after due legal
proceedings, to have complied with all of the terms, provisions, conditions and
covenants hereof.

     15.05   In addition to the other provisions of this Section XVI, if
Franchisor reasonably determines that Franchisee becomes or will become unable
to meet its obligations to Franchisor under this Agreement, Franchisor may
provide Franchisee written notice to that effect and demand that Franchisee
provide those assurances reasonably designated by Franchisor, which may include
security or letters of credit for the payment of Franchisee's obligations to
Franchisor. If Franchisee fails to provide the assurances demanded by Franchisor
within 30 days after its receipt of written notice from Franchisor, this
Agreement shall terminate without further notice to Franchisee effective
immediately upon expiration of that time, unless Franchisor notifies Franchisee
otherwise in writing.

                                       38
<PAGE>

XVI. EFFECT OF TERMINATION OR EXPIRATION

     16.01.  Upon termination or expiration of this Agreement, all rights
granted herein shall forthwith terminate, and:

             A.   Franchisee shall immediately cease to operate the Franchised
                  Unit as an SBC Retail Unit, and shall not thereafter, directly
                  or indirectly, represent to the public that the business is an
                  SBC Retail Unit;

             B.   Franchisee shall immediately and permanently cease to use, by
                  advertising or in any manner whatsoever, any menus, recipes,
                  confidential food for formulae, equipment, methods,
                  procedures, and the techniques associated with the System,
                  Franchisor's Proprietary Marks, and Franchisor's other trade
                  names, trademarks and service marks associated with the SBC
                  System. In particular, and without limitation, Franchisee
                  shall cease to use all signs, furniture, fixtures, equipment,
                  advertising materials, stationery, forms, packaging,
                  containers and any other articles which display the
                  Proprietary Marks;

             C.   Franchisee agrees, in the event Franchisee continues to
                  operate or subsequently begins to operate a restaurant, coffee
                  shop or other businesses, not to use any reproduction,
                  counterfeit, copy, or colorable imitation of the Proprietary
                  Marks in conjunction with such other business which is likely
                  to cause confusion or mistake or to deceive, and further
                  agrees not to utilize any trade dress, designation of origin,
                  description, or representation which falsely suggests or
                  represents an association or connection with Franchisor;

             D.   Franchisee agrees, upon termination or expiration of this
                  Agreement or upon cessation of the Franchised Business at the
                  location specified in Section I hereof for any reason, whether
                  or not Franchisee continues to operate any business at such
                  location, and whether or not Franchisee owns or leases the
                  location, to make such modifications or alterations to the
                  Franchised Unit premises immediately upon termination or
                  expiration of this Agreement or cessation of operation of the
                  Franchised Business as may be necessary to prevent the
                  operation of any businesses thereon by Franchisee or others in
                  derogation of this Section XVI, and shall make such specified
                  additional changes thereto as Franchisor may reasonably
                  request for that purpose. The modifications and alterations
                  required by this Section XVI shall include, but are not
                  limited to, removal of all trade dress, proprietary marks and
                  other indicia of the SBC System;

                                       39
<PAGE>

          E.   Franchisee shall immediately pay all sums owing to Franchisor and
               its subsidiaries and affiliates.  In the event of termination for
               any default by Franchisee, such sums shall include all damages,
               costs and expenses, including reasonable attorneys' fees,
               incurred by Franchisor as a result of the default; and

          F.   Franchisee shall immediately turn over to Franchisor the Manual,
               all other manuals, records, files, instructions, correspondence
               and any and all other materials relating to the operation of the
               Franchised Business in Franchisee's possession and all copies
               thereof (all of which are acknowledged to be Franchisor's
               property) and shall retain no copy or record of any of the
               foregoing, with the exception of Franchisee's copy of this
               Agreement, any correspondence between the parties, and any other
               documents which Franchisee reasonably needs for compliance with
               any provision of law.

   16.02. Franchisor shall have the right (but not the duty) to be exercised by
notice of intent to do so within thirty (30) days after termination or
expiration of this Agreement, to purchase any and all improvements, equipment,
advertising and promotional materials, ingredients, products, materials,
supplies, paper goods and any items bearing Franchisor's Proprietary Marks at
current fair market value. If the parties cannot agree on a fair market value
within a reasonable time, an independent appraiser shall be designated by
Franchisor, and his determination of fair market value shall be binding. If
Franchisor elects to exercise any option to purchase herein provided, it shall
have the right to set-off all amounts due from Franchisee under this Agreement
and the cost of the appraisal, if any, against any payment therefor.

   16.03. In the event the premises of the Franchised Unit are leased to
Franchisee, Franchisee shall, upon termination or expiration of this Agreement
and upon request by Franchisor, immediately assign, set over and transfer unto
Franchisor, at Franchisor's sole option and discretion, said lease and the
premises, including improvements. Any such lease entered into by Franchisee
shall contain a clause specifying the landlord's consent to assign such lease to
Franchisor or its assignee in the event this Agreement is terminated.

   16.04. Franchisee shall pay to Franchisor all damages, costs, and expenses,
including reasonable attorneys' fees, incurred by Franchisor in seeking recovery
of damages caused by any action of Franchisee in violation of, or in obtaining
injunctive relief for the enforcement of, any portion of this Section XVI.
Further, Franchisee acknowledges and agrees that any failure to comply with the
provisions of this Section XVI, shall result in irreparable injury to
Franchisor.

                                       40
<PAGE>

     16.05.  All provisions of this Agreement which, by their terms or intent,
are designed to survive the expiration or termination of this Agreement, shall
so survive the expiration and/or termination of this Agreement.

     16.06.  Franchisee shall comply with the covenants contained in Section
XIII of this Agreement.

     16.07.  Franchisee shall execute such documents as Franchisor may
reasonably require to effectuate termination of the franchise and Franchisee's
rights to use the trademarks and systems of Franchisor.

XVII. TAXES, PERMITS, AND INDEBTEDNESS

     17.01.  Franchisee shall promptly pay when due all taxes, accounts and
other indebtedness of every kind incurred by Franchisee in the conduct of the
Franchised Business under this Agreement.

     17.02.  Franchisee, in the conduct of the Franchised Business, shall comply
with all applicable laws and regulations, and shall timely obtain any and all
permits, certificates, or licenses necessary for the full and proper conduct of
the businesses operated under this Agreement, including, without limitation,
licenses to do business, trade name registrations, sales tax permits and fire
clearances.

XIII. INDEPENDENT CONTRACTOR AND INDEMNIFICATION

     18.01.  This Agreement does not constitute Franchisee an agent, legal
representative, joint venturer, partner, employee or servant of Franchisor for
any purpose whatsoever.  It is understood and agreed that Franchisee shall be an
independent contractor and is in no way authorized to make any contract,
agreement, warranty, or representation on behalf of Franchisor.  The parties
further agree that this Agreement does not create any fiduciary relationship
between them.

     18.02.  During the term of this Agreement and any extensions hereof,
Franchisee agrees to take such action as Franchisor deems reasonably necessary
for Franchisee to inform and hold itself out to the public as an independent
contractor operating the Franchised Business pursuant to a franchise from
Franchisor, including, without limitation, exhibiting a notice of that fact at
the Franchised Business in form and substance satisfactory to Franchisor.

     18.03  Franchisee agrees to defend, indemnify and hold harmless Franchisor,
its parent, subsidiaries and affiliates, and their respective officers,
directors, employees, agents, successors and assigns from all claims, demands,
losses, damages, liabilities, cost and

                                       41
<PAGE>

expenses (including attorney's fees and expense of litigation) resulting from,
or alleged to have resulted from, or in connection with Franchisee's operation
of the Franchised Business, including, but not limited to, any claim or actions
based on or arising out of any injuries, including death to persons or damages
to or destruction of property, sustained or alleged to have been sustained in
connection with or to have arisen out of or incidental to the Franchised
Business and/or the performance of this contract by Franchisee, its agents,
employees, and/or its subcontractors, their agents and employees, or anyone for
whose acts they may be liable, regardless of whether or not such claim, demand,
damage, loss, liability, cost or expense is caused in whole or in part by the
negligence of Franchisor, Franchisor's representative, or the employees, agents,
invitees, or licensees thereof.

     18.04  Franchisor shall advise Franchisee in the event Franchisor  receives
notice that a claim has been or may be filed with respect to a matter covered by
this Agreement, and Franchisee shall immediately assume the defense thereof at
Franchisee's sole cost and expense.  In any event, Franchisor will have the
right, through counsel of its choice, to control any matter to the extent it
could directly or indirectly affect Franchisor and/or its parent, subsidiaries
or affiliates or their officers, directors, employees, agents, successors or
assigns.  If Franchisee fails to assume such defense, Franchisor may defend,
settle, and litigate such action in the manner it deems appropriate and
Franchisee shall, immediately upon demand, pay to Franchisor all costs
(including attorney's fees and cost of litigation) incurred by Franchisor in
affecting such defense, in addition to any sum which Franchisor may pay by
reason of any settlement or judgment against Franchisor.

     18.05  Franchisor's right to indemnity hereunder shall exist
notwithstanding that joint or several liability may be imposed upon Franchisor
by statute, ordinance, regulation or judicial decision.

     18.06  Franchisee agrees to pay Franchisor all expenses including
attorney's fees and court  costs, incurred by Franchisor, its parent,
subsidiaries, affiliates, and their successors and assigns to remedy any
defaults of or enforce any rights under this Agreement, effect termination of
this Agreement or collect any amounts due under this Agreement.

XIX.   APPROVALS AND WAIVERS

     19.01. Whenever this Agreement requires the prior approval of Franchisor,
Franchisee shall make a timely written request to Franchisor therefor, and such
approval or consent shall be in writing.

     19.02. Franchisor makes no warranties or guarantees upon which Franchisee
may rely, and assumes no liability or obligation to Franchisee or any third
party to which Franchisor would not otherwise be subject, by providing any
waiver, approval, advice,

                                       42
<PAGE>

consent, or suggestions to Franchisee in connection with this Agreement, or by
reason of any neglect, delay, or denial of any request therefor.

     19.03.  No failure of Franchisor to exercise any power reserved to it in
this Agreement, or to insist upon compliance by Franchisee with any obligation
or condition in this Agreement, and no custom or practice of the parties at
variance with the terms hereof, shall constitute a waiver of Franchisor's right
to demand exact compliance with the terms of this Agreement.  Waiver by
Franchisor of any particular default shall not affect or impair Franchisor's
right in respect to any subsequent default of the same or of a different nature,
nor shall any delay, forbearance, or omission of Franchisor to exercise any
power or rights arising out of any breach or default by Franchisee of any of the
terms, provisions, or covenants of this Agreement, affect or impair Franchisor's
rights, nor shall such constitute a waiver by Franchisor of any rights,
hereunder or right to declare any subsequent breach or default.  Subsequent
acceptance by Franchisor of any payments due to it shall not be deemed to be a
waiver by Franchisor of any preceding breach by Franchisee of any terms,
covenants, or conditions of this Agreement.

XX.  NOTICES

Any and all notices required or permitted under this Agreement shall be in
writing and shall be personally delivered, sent by registered mail, or by other
means which will provide evidence of the date received to the respective parties
at the following addresses unless and until a different address has been
designated by written notice to the other party:

Notices to Franchisor:   Franchise Department
                         SEATTLE'S BEST COFFEE, LLC.
                         1321 Second Avenue
                         Suite 200
                         Seattle, WA  98101

cc:                      AFC Enterprises, Inc.
                         Six Concourse Parkway
                         Suite 1700
                         Atlanta, GA 30328
                         ATTN: Legal Department

                                       43
<PAGE>

Notices to Franchisee:   ____________________________
                         ____________________________
                         ____________________________

All written notices and reports permitted or required to be delivered by the
provisions of this Agreement shall be addressed to the party to be notified at
its most current principal business address (or telefax number) of which the
notifying party has been notified (under the provisions of this Section XX) and
shall be deemed so delivered (i) at the time delivered by hand; (ii) one (1)
business day after sending by telegraph, facsimile, electronic mail or
comparable electronic system with electronic confirmation of receipt; or (iii)
if sent by registered or certified mail or by other means which affords the
sender evidence of delivery, on the date and time of receipt or attempted
delivery if delivery has been refused or rendered impossible by the party being
notified.

XXI.   SEVERABILITY AND CONSTRUCTION

       21.01.  Except as expressly provided to the contrary herein, each
section, paragraph, part, term, and/or provision of this Agreement shall be
considered severable; and if, for any reason, any section, part, term, and/or
provision herein is determined to be invalid and contrary to, or in conflict
with, any existing or future law or regulation by a court or agency having valid
jurisdiction, such shall not impair the operation, or have any other effect
upon, such other portions, sections, parts, terms, and/or provisions of this
Agreement as may remain otherwise intelligible, and the latter shall continue to
be given full force and effect to bind the parties hereto; and said invalid
portions, sections, parts, terms, and/or provisions shall be deemed not to be
part of this Agreement.

       21.02.  Except as has been expressly provided to the contrary herein,
nothing in this Agreement is intended, nor shall be deemed, to confer upon any
person or legal entity other than Franchisee, Franchisor, Franchisor's officer,
directors, and employees, and Franchisee's permitted and Franchisor's respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.

       21.03.  All captions in the Agreement are intended solely for the
convenience of the parties, and none shall be deemed to affect the meaning or
construction of any provision hereof.

       21.04.  All references herein to the masculine, neuter or singular shall
be construed to include the masculine, feminine, neuter or plural, where
applicable, and all acknowledgments, promises, covenants, agreements and
obligations herein made or undertaken by Franchisee shall be deemed jointly and
severally undertaken by all the parties hereto on behalf of Franchisee.

                                       44
<PAGE>

       21.05.  This Agreement may be executed in counterparts, and each copy so
executed shall be deemed an original.

XXII.  ENTIRE AGREEMENT:  SURVIVAL

       22.01.  This Agreement, the documents referred to herein, the Development
Agreement, if any, and the exhibits hereto, constitute the entire, full and
complete agreement between Franchisor and Franchisee concerning the subject
matter hereof and supersede any and all prior agreements.  Except for those
permitted to be made unilaterally by Franchisor hereunder, no amendment, change,
modification or variance of this Agreement shall be binding on either party
unless in writing and executed by Franchisor and Franchisee.  Representations by
either party, whether oral, in writing, electronic or otherwise, that are not
set forth in this Agreement shall not be binding upon the party alleged to have
made such representations and shall be of no force or effect.

               I have read this Section 22.01 and agree
               that I have not been induced by and am
               not relying upon any representation not
               contained in this Agreement.

               ______________________________________,
               Franchisee

       22.02.  Notwithstanding anything herein to the contrary, upon the
termination of this Agreement for any reason whatsoever (including the execution
of a subsequent Franchise Agreement pursuant to the provisions of Sections 2.02
B and 14.03 F), or upon the expiration of the Term hereof, any provisions of
this Agreement which, by their nature, extend beyond the expiration or
termination of this Agreement, shall survive termination or expiration and be
fully binding and enforceable as though such termination or expiration had not
occurred.

XXIII.  ACKNOWLEDGMENTS

       23.01.  Franchisee acknowledges that Franchisee has conducted an
independent investigation of the SEATTLE'S BEST COFFEE franchise and recognized
that the business venture contemplated by this Agreement involves business risks
and Franchisee's success will be largely dependent upon the ability of the
Franchisee as an independent business entity.

(Franchisee must initial each paragraph below)

                                       45
<PAGE>

_____  FRANCHISOR EXPRESSLY DISCLAIMS THE MAKING OF, AND FRANCHISEE ACKNOWLEDGES
       THAT FRANCHISEE HAS NOT RECEIVED, ANY WARRANTY OR GUARANTY, EXPRESSED OR
       IMPLIED, AS TO THE POTENTIAL VOLUME, PROFITS OR SUCCESS OF THE BUSINESS
       VENTURE CONTEMPLATED BY THIS AGREEMENT.

_____  23.02.  FRANCHISEE ACKNOWLEDGES THAT FRANCHISEE HAS RECEIVED A COMPLETED
       COPY OF THIS AGREEMENT, THE EXHIBITS HERETO, IF ANY, AND THE AGREEMENTS
       RELATING THERETO, IF ANY, AT LEAST FIVE (5) BUSINESS DAYS PRIOR TO THE
       DATE ON WHICH THIS AGREEMENT WAS EXECUTED.

_____  FRANCHISEE FURTHER ACKNOWLEDGES THAT FRANCHISEE HAS RECEIVED THE
       DISCLOSURE DOCUMENT REQUIRED BY THE TRADE REGULATION RULE OF THE FEDERAL
       TRADE COMMISSION ENTITLED "DISCLOSURE REQUIREMENTS AND PROHIBITIONS
       CONCERNING FRANCHISING AND BUSINESS OPPORTUNITY VENTURES" AT LEAST TEN
       (10) BUSINESS DAYS PRIOR TO THE DATE ON WHICH THIS AGREEMENT WAS
       EXECUTED.

_____  23.03.  FRANCHISEE ACKNOWLEDGES THAT FRANCHISEE HAS READ AND UNDERSTOOD
       THIS AGREEMENT, THE EXHIBITS HERETO, IF ANY, AND AGREEMENTS RELATING
       THERETO, IF ANY, AND THAT FRANCHISOR HAS ACCORDED FRANCHISEE AMPLE TIME
       AND OPPORTUNITY AND HAS ENCOURAGED FRANCHISEE TO CONSULT WITH ADVISORS OF
       FRANCHISEE'S OWN CHOOSING ABOUT THE POTENTIAL BENEFITS AND RISKS OF
       ENTERING INTO THIS AGREEMENT.

_____  23.04.  FRANCHISEE RECOGNIZES AND UNDERSTANDS THAT IT MAY INCUR OTHER
       EXPENSES AND/OR OBLIGATIONS AS PART OF THE INITIAL INVESTMENT IN THE
       FRANCHISED BUSINESS WHICH THE TERMS OF THIS AGREEMENT MAY NOT ADDRESS,
       AND WHICH INCLUDE WITHOUT LIMITATION: OPENING ADVERTISING, EQUIPMENT,
       FIXTURES, OTHER FIXED ASSETS, CONSTRUCTION, LEASEHOLD IMPROVEMENTS AND
       DECORATING COSTS AS WELL AS WORKING CAPITAL NECESSARY TO COMMENCE
       OPERATIONS.

XXIV.  APPLICABLE LAW: VENUE

                                       46
<PAGE>

       24.01.  Applicable Law.  This Agreement takes effect upon its acceptance
and execution by Franchisor and shall be interpreted and construed under the
laws of the State of Georgia which laws shall prevail in the event of any
conflict of law (without regard to, and without giving effect to, the
application of Georgia choice of law or conflict of law rules) except to the
extent governed by the U. S. Trademark Act of 1946, 15 U.S.C. (S) 1051, et seq.
                                                                        -- ---
(the " Lanham Act") as amended; provided, however, that if the covenants in
Article XIII of this Agreement would not be enforceable under the laws of
Georgia, and the Franchised Unit is located outside of Georgia, then such
covenants shall be interpreted and construed under the laws of the state in
which the Franchised Unit is located.  Nothing in this Section XXIV is intended
by the parties to subject this Agreement to any franchise or similar law, rule,
or regulation of the State of Georgia to which this Agreement would not
otherwise be subject.

       24.02.  The parties agree that any action brought by Franchisee against
Franchisor in any court, whether federal or state, shall be brought within a
court of competent jurisdiction in Atlanta, Georgia.  Any action brought by
Franchisor against Franchisee in any court, whether federal or state, may be
brought within  any court in the State of Georgia, or in the jurisdiction where
Franchisee resides or does business or where the Franchised Unit is or was
located or where the claim arose. Franchisee hereby consents to personal
jurisdiction and venue in the state and judicial district in which Franchisor
has its principal place of business.

       24.03.  No right or remedy herein conferred upon or reserved to
Franchisor is exclusive of any other right or remedy herein, or by law or equity
provided or permitted; but each shall be cumulative of any other right or remedy
provided in this Agreement

       24.04.  Nothing herein contained shall bar Franchisor's right to obtain
injunctive relief against threatened conduct that will cause it loss or damages,
under the usual equity rules, including the applicable rules for obtaining
restraining orders and preliminary injunctions.

       24.05.  Any and all claims and actions arising out of or relating to this
Agreement (including, but not limited to, the offer and sale of this franchise),
the relationship of Franchisee and Franchisor, or Franchisee's operation of the
Franchised Unit, brought by Franchisee shall be commenced within eighteen (18)
months from the occurrence of the facts giving rise to such claim or action, or
such claim or action shall be barred.

       24.06.  Franchisor and Franchisee hereby waive to the fullest extent
permitted by law any right to or claim of any consequential, punitive, or
exemplary damages against the other, and agree that in the event of a dispute
between them each shall be limited to the recovery of any actual damages
sustained by it.

                                       47
<PAGE>

XXV. CORPORATE FRANCHISEE

     In the event the Franchisee named herein is a corporation at the time of
execution of this Agreement, it is warranted, covenanted and represented to
Franchisor that:

     25.01.  All of the issued and outstanding stock of Franchisee is owned,
legally and beneficially, by the person or persons listed on Exhibit "B"
                                                   ---------------------
attached hereto.
---------------

     25.02.  The above-named person or persons has (have) individually, and
jointly and severally, executed this Agreement, and such person, or one of such
persons, is and shall be the chief executive officer of the Franchisee
corporation, holding such corporate office or offices as may be necessary to
maintain and exercise the actual power and authority actively to direct the
affairs of the Franchisee.

     25.03.  Franchisee is validly incorporated and duly existing under the laws
of the State of  ________________________, is duly qualified to conduct business
therein, and has its principal place of business at ____________________________
_______.  Franchisee shall promptly notify Franchisor in writing of any change
thereto during the term of this Agreement.

                        (Signatures on Following Page)

                                       48
<PAGE>

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby,
have duly executed, sealed, and delivered this Agreement in triplicate on the
day and year first above-written.

WITNESS:                           FRANCHISOR:
                                   SEATTLE'S BEST COFFEE, LLC.

__________________________         By:  __________________________________
                                   Title: ________________________________
__________________________

WITNESS:                           FRANCHISEE:

__________________________         By:  __________________________________
                                   Title: ________________________________
__________________________

{SIGNATURE PAGE TO FRANCHISE AGREEMENT}

                                       49
<PAGE>

                                  EXHIBIT "A"
                                  -----------

                             SEATTLE'S BEST COFFEE
                              FRANCHISE AGREEMENT

                          NOTICE OF COMMENCEMENT DATE
                          ---------------------------

Name of Franchisee: _______________________________________________________

Franchise Agreement Dated: ________________________________________________

Franchise Premises Address: _______________________________________________

___________________________________________________________________________

___________________________________________________________________________

Store Number: _____________________________________________________________

NOTICE is hereby given to the abovementioned Franchisee pursuant to Section 2.01
of the Franchise Agreement that the Term of the abovementioned Franchise
Agreement commenced on ________________, 19___, and that the Term shall expire
on ________________, _____, unless the Franchise Agreement is terminated
earlier, pursuant to its terms and conditions.

                                             SEATTLE'S BEST COFFEE, LLC.

                                             By: ______________________________
                                             Title: ___________________________
                                             Date of Notice: __________________

                                       50
<PAGE>

                                  EXHIBIT "B"
                                  -----------

                          SHAREHOLDERS OF FRANCHISEE
                          --------------------------

                          (For Corporate Franchisees)

   Name of            Number of        % Ownership
Shareholders           Shares         of Franchisee        Title
------------           ------         -------------        -----

                                       51
<PAGE>

                                                                   EXHIBIT 10.47

                       AMENDMENT TO FRANCHISE AGREEMENT
                (Single Unit Franchise; Development Procedures)

     THIS AMENDMENT TO FRANCHISE AGREEMENT (this "Amendment") is made and
entered into this day of ___________________, by and between SEATTLE'S BEST
COFFEE, LLC., a Washington limited liability company, with its principal offices
at 1321 Second Avenue, Suite 200, Seattle, Washington 98101 (hereinafter
referred to as "Franchisor") and ___________________________________, with a
mailing address at _________________ __________________________________
(hereinafter referred to as "Franchisee").

                             W I T N E S S E T H:
                             -------------------

     WHEREAS, Franchisee and Franchisor entered into a SBC Franchise Agreement
dated ___________ (hereinafter the "Franchise Agreement"); and

     WHEREAS, Franchisee and Franchisor desire to amend the terms and conditions
of the Franchise Agreement as hereinafter set forth;

     NOW, THEREFORE, in consideration of the mutual covenants and conditions
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree to
amend the Franchise Agreement as follows:

     1.   This Amendment shall be attached to, incorporated in, and become a
part of, the Franchise Agreement.  The terms and conditions stated in this
Amendment, to the extent they are inconsistent with the terms and conditions
stated in the Franchise Agreement, shall prevail over the terms of the Franchise
Agreement.

     2.   The Franchise  Agreement is hereby amended by inserting the following
new Section XXVI at the end thereof:

          "XXVI.    Development Procedures

          26.01.    Site Acquisition
                    ----------------

                    A.   Within thirty (30) days after execution of this
          Franchise Agreement, Franchisee shall submit, in writing to
          Franchisor, satisfactory proof to Franchisor that Franchisee:

                         (i)   owns the site at which the Franchised Cafe is to
          be developed and operated (the "Franchised Location");

                         (ii)  has leased the Franchised Location for a term
          which, with renewal options, is not less than the initial term of the
          Franchise Agreement; or

                         (iii) has entered into a written agreement to purchase
          or to lease the Franchised Location on terms provided herein, subject
          only to obtaining necessary governmental permits.

                                       1
<PAGE>

          The proof required by this Section includes, but is not limited to,
          submission of executed copies of all leases and deeds, as well as all
          governmental approvals if effectiveness of the leases or deeds is
          conditioned thereon.

                    B.   If Franchisee proposes to lease or sublease the
          Franchised Location, Franchisee shall provide Franchisor with a copy
          of the fully-executed lease for the Franchised Location within 30 days
          after execution of this Franchise Agreement, but, in any event, prior
          to the commencement of construction at the Franchised Location. The
          lease or sublease shall not contain any covenants, use clauses or
          other obligations that would prevent Franchisee from performing its
          obligations under this Franchise Agreement. Any lease, sublease,
          letter of intent or lease memorandum for the Franchised Location shall
          contain provisions that satisfy the following requirements during the
          entire term of the lease, including any renewal terms:

                         1.   The landlord consents to Franchisee's use of the
          proprietary signs, distinctive designs and layouts of the SBC System,
          the Proprietary Marks, and upon expiration or the earlier termination
          of the lease, consents to permit Franchisee, at Franchisee's expense,
          to remove all such items and other trade fixtures, so long as
          Franchisee makes repairs to the building caused by such removal.

                         2.   The landlord agrees to provide Franchisor (at the
          same time sent to Franchisee) a copy of all amendments and assignments
          and notices of defau lt pertaining to the lease and the leased
          premises.

                         3.   Franchisor shall have the right to enter the
          leased premises to make any modifications or alterations, at its own
          cost, necessary to protect the Proprietary Marks and the SBC System
          and to cure, within the time periods provided by the lease, any
          default under the lease, all without being guilty of trespass or other
          tort, and to charge Franchisee for these costs.

                         4.   The landlord agrees that Franchisee shall be
          solely responsible for all obligations, debts and payments under the
          lease.

                         5.   The landlord agrees that, following the expiration
          or earlier termination of this Franchise Agreement, Franchisee shall
          have the right to make those alterations and modifications to the
          premises as may be necessary to clearly distinguish to the public the
          premises from a SBC Cafe and also make those specific additional
          changes as Franchisor reasonably may request for that purpose. The
          landlord also agrees that, if Franchisee fails to promptly make these
          alterations and modifications, Franchisor shall have the right to do
          so without being guilty of trespass or other tort so long as
          Franchisor makes repairs to the building caused by such removal.

                         6.   The landlord agrees not to amend or otherwise
          modify the lease in any manner that would affect any of the foregoing
          requirements without the prior written consent of Franchisor, which
          consent shall not be unreasonably withheld.

                         7.   Franchisee may assign the lease to Franchisor or
          its designee with landlord's consent (which consent shall not be
          unreasonably withheld) and without payment of any assignment fee or
          similar charge or increase in any rentals payable to the landlord.

          26.02     Construction of the Franchised Cafe
                    -----------------------------------

                    A.   Franchised Cafe Development
                         ---------------------------

                         1.   Franchisee assumes all cost, liability and expense
          for developing,

                                       2
<PAGE>

          constructing and equipping the Franchised Bakery. Franchisor will
          furnish to Franchisee prototypical plans and specifications for a
          Franchised Bakery, including requirements for dimensions, design,
          image, interior layout, decor, fixtures, equipment, signs,
          furnishings, storefront and color scheme. It shall be Franchisee's
          responsibility to have prepared all required construction plans and
          specifications to suit the shape and dimensions of the Franchised
          Location and Franchisee must ensure that these plans and
          specifications comply with applicable ordinances, building codes and
          permit requirements and with lease requirements and restrictions.
          Franchisee shall use only registered architects, registered engineers,
          and professional and licensed contractors.

                    2.   Within ninety (90) days of the date of this Franchise
          Agreement, Franchisee shall submit proposed construction plans,
          specifications and drawings for the Franchised Bakery ("Plans") to
          Franchisor which must be in conformity with Franchisor's standards and
          specifications for SBC Cafes, as set out in the current Confidential
          Operating Standards Manual (as defined in the Franchise Agreement) or
          otherwise in writing, and shall, upon the request of Franchisor,
          submit all revised or "as built" Plans during the course of such
          construction. Franchisor will approve or refuse to approve the Plans
          and notify Franchisee within 30 days after Franchisor receives the
          Plans. (Approval shall not be unreasonably withheld.). The Plans shall
          include, but are not limited to, floor plans, equipment layouts,
          decor, and interior and exterior elevations. Once Franchisor has
          approved the Plans, no substantial change shall be made to the Plans
          without the prior approval of Franchisor, which shall not to be
          unreasonably withheld. If, in the course of construction, any such
          change in the Plans is contemplated, the approval of Franchisor must
          first be obtained before proceeding. Franchisor shall approve or
          disapprove Plan changes within 10 business days of receipt.

                    3.   Franchisee may not commence construction of the
          Franchised Bakery prior to receiving written notification from
          Franchisor that it has approved the Plans. All construction must be in
          accordance with Plans approved by Franchisor and must comply in all
          respects with applicable laws, ordinances and local rules and
          regulations. The Franchised Bakery may not open if construction has
          not been performed in substantial compliance with Plans approved by
          Franchisor, and this Agreement may be terminated if such non-
          compliance is not cured within a commercially reasonable amount of
          time. Franchisor may furnish guidance to Franchisee in developing the
          Franchised Cafe and may periodically inspect the premises during its
          development.

               B.   Commencement and Completion of Construction
                    -------------------------------------------

                    1.   No more than thirty (30) days after the Franchisor
          approves Franchisee's Construction Plans, Franchisee shall commence
          construction or renovation of the Franchised Cafe. If commencement of
          construction or renovation is delayed by a cause beyond the reasonable
          control of Franchisee, the date upon which commencement of
          construction or renovation is to begin may be extended by obtaining
          written approval of Franchisor. Prior to the commencement of
          construction, Franchisee shall: (1) eliminate or otherwise satisfy all
          of the conditions set forth in writing by Franchisor; (2) if not
          previously paid, pay Franchisor the balance of the initial fees
          required by this Agreement; and (3) provide Franchisor, if Franchisee
          leases the Franchised Location, a copy of the fully-executed lease for
          the Franchised Location or, if Franchisee owns the Franchised
          Location, proof of Franchisee's ownership interest and (4) procure the
          insurance coverage provided for in Section XII of the Franchise
          Agreement, and maintain such insurance coverage throughout the term of
          the Franchise Agreement.

                    2.   Upon commencement of construction or renovation of the
          Franchised Unit, Franchisee shall notify Franchisor on such form as
          Franchisor may prescribe.

                    3.   Notwithstanding the occurrence of any events, except
          events constituting

                                       3
<PAGE>

          Force Majeure, construction shall be completed and the Franchised Cafe
          shall be furnished, equipped and shall otherwise be ready to open for
          business in accordance with this Agreement not later than 180 days
          after the date of execution of this Franchise Agreement ("the Opening
          Date"). If events constituting Force Majeure cause a delay in the
          commencement of construction of the Franchised Cafe, Franchisor shall
          proportionately extend the Opening Date for the Franchised Cafe.

                    4.   Franchisee agrees, at its sole expense, to do or cause
          to be done the following, by the Opening Date:

                         (a)  Obtain and maintain all required building,
               utility, sign, health, sanitation, business and other permits and
               licenses applicable to the Franchised Cafe.

                         (b)  Construct all required improvements to the
               Franchised Location and decorate the interior of the Franchised
               Cafe in compliance with the Plans approved by Franchisor.

                         (c)  Purchase or lease and install all specified and
               required fixtures, equipment, furnishings and signs required for
               the Franchised Cafe.

                         (d)  Purchase an opening inventory for the Franchised
               Cafe of only authorized and approved products and other materials
               and supplies.

                    5.   Inspection, Cooperation.  During the course of
                         -----------------------
               construction and/or renovation of the Franchised Cafe, Franchisee
               shall (and shall cause Franchisee's architect, engineer,
               contractors, and subcontractors to) cooperate fully with
               Franchisor and its designees for the purpose of permitting
               Franchisor and its designees to inspect the Franchised Location
               and the course of construction and/or renovation of the
               Franchised Cafe in order to determine whether construction and/or
               renovation is proceeding according to the Plans. Without limiting
               the generality of the foregoing, Franchisee, and Franchisee's
               architect, engineer, contractors and subcontractors shall: (1)
               supply Franchisor or its designees with samples of construction
               and/or renovation materials, due diligence environmental studies,
               supplies, equipment and other material and reports, if any such
               tests, studies or reports indicate there may be material problems
               or as Franchisor or its designees may request; and (2) afford
               representatives of Franchisor and its designees access to the
               Franchised Location and to the construction and/or renovation
               work in order to permit Franchisor and its designees to carry out
               inspections.

     26.03.    Limitation of Liability.  Notwithstanding the right of Franchisor
               -----------------------
     to approve the Plans and to inspect the construction and/or renovation work
     and the Franchised Cafe, Franchisor and its designees shall have no
     liability or obligation with respect to the Franchised Location, the
     design, construction or renovation of Franchised Cafe or the furnishings,
     fixtures and equipment to be

                                       4
<PAGE>

     required; the rights of Franchisor being exercised solely for the purpose
     of ensuring compliance with the terms and conditions of this Agreement.

     26.04     Right to Open the Franchised Cafe
               ---------------------------------

               A.   Franchisee shall notify Franchisor in writing at least 30
     days prior to the date Franchisee expects construction and/or renovation of
     the Franchised Cafe to be completed and a certificate of occupancy issued.
     Franchisor reserves the right, after receiving Franchisee's notice, to
     conduct a final inspection of the Franchised Cafe and its premises to
     determine if Franchisee has complied with this Agreement. Franchisor shall
     not be liable for delays or loss occasioned by its inability to complete
     its investigation and to make a determination within this period.
     Franchisee shall not open the Franchised Cafe for business without the
     express written authorization of Franchisor, which will not be granted
     unless Franchisee has satisfied the following conditions:

                    1.   Franchisee is not in material default under this
     Agreement or any other agreements with Franchisor; Franchisee is not in
     default beyond the applicable cure period under any real estate lease,
     equipment lease or financing instrument relating to the Franchised Cafe,
     Franchisee is not in default beyond the applicable cure period with any
     vendor or supplier to the Franchised Cafe and, for the previous 6 months,
     Franchisee has not been in default beyond the applicable cure period under
     any agreement with Franchisor.

                    2.   Franchisee is current on all obligations due Franchisor
     and has paid Franchisor the balance of the initial fees required by this
     Agreement.

                    3.   Franchisor is satisfied that the Franchised Cafe was
     constructed and/or renovated substantially in accordance with the Plans
     approved by Franchisor and state and local codes.

                    4.   If the Franchised Location is leased, Franchisor has
     received a copy of the fully-executed lease.

                    5.   Franchisee has obtained a certificate of occupancy and
     any other required health, safety or fire department certificates. If
     requested by Franchisor, Franchisee shall submit a copy of the certificate
     of occupancy to Franchisor.

                    6.   Franchisee has certified to Franchisor in writing that
     the installation of all items of furnishings, fixtures, equipment, signs,
     computer terminals and related equipment, supplies and other items has been
     accomplished and that Franchisee has hired and properly trained its staff.

                    7.   Franchisor has determined that the Franchised Cafe has
     been constructed and/or renovated and equipped substantially in accordance
     with the requirements of this Agreement and that Franchisee has hired and
     trained a staff in accordance with the requirements of this Agreement and
     the Franchise Agreement.

                    8.   Franchisor has been furnished with copies of all
     insurance policies required by Section XII of this Agreement or such other
     evidence of insurance coverage and payment of premiums as Franchisor
     reasonably may request.

               B.   If the Franchised Cafe is Franchisee's first Franchised Cafe
     opened hereunder, Franchisor shall provide a representative to be present
     at the opening. The Franchised Cafe shall not be opened unless such
     representative is present. Should commencement of operation of the
     Franchised Cafe be delayed by the failure of Franchisor to provide such a
     representative, the

                                       5
<PAGE>

          date upon which commencement of operation of the Franchised Cafe is
          required pursuant to Section 25.02.B.3. of this Agreement, shall be
          extended until such time as such assistance is provided by
          Franchisor."

     3.   In the event Franchisee executed a "Preliminary Agreement for a
License to Develop a Single SBC Cafe" prior to executing this Franchise
Agreement, the amount, if any, paid by Franchisee to Franchisor thereunder shall
be applied as a credit to the Franchise Fee payable hereunder, and shall be
reflected in Section 3.01.A of the Franchise Agreement, as if such amount were
the portion of a "Development Fee" applicable to the Franchise Fee payable
hereunder.

     4.   This Amendment and the documents referred to herein, constitute the
entire, full and complete agreement between Franchisor and Franchisee concerning
the subject matter hereof and supersede any and all prior agreements. No other
representations have induced Franchisee to execute this Amendment, and there are
no representations, inducements, promises, or agreements, oral or otherwise,
between the parties not embodied herein which are of any force or effect with
reference to this Amendment or otherwise. No amendment, change, or variance from
this Amendment shall be binding on either party unless executed in writing.

     5.   The Franchise Agreement and this Amendment shall be governed by the
laws of the State of Georgia, without regard to application of Georgia choice of
law rules.

     6.   The Franchise Agreement shall remain in full force and effect except
as specifically amended herein.

     IN WITNESS WHEREOF, the parties hereto intending to be legally bound hereby
have executed this Amendment in triplicate on the day and year first written.

WITNESS:                           FRANCHISOR:
                                   SEATTLE'S BEST COFFEE, LLC.

__________________________         By:________________________________

WITNESS:                           Franchisee:

__________________________         ___________________________________

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