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LICENSE AGREEMENT C
INSTALL, CONSTRUCT, OPERATE, MAINTAIN



This License Agreement C Install, Construct, Operate, Maintain (the Agreement) is effective [DATE],

BETWEEN:  [FIRST PARTY NAME] (the Licensor), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at:

      [YOUR COMPLETE ADDRESS]

AND:  [SECOND PARTY NAME] (the "Licensee"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at:

      [COMPLETE ADDRESS]

AND:  [THIRD PARTY NAME] (the "Guarantor"), an individual with his main address located at:

      [COMPLETE ADDRESS]

RECITALS

WHEREAS [FIRST PARTY NAME] is the registered owner in [COUNTRY] of the trade marks listed in Schedule A-1 annexed hereto.

AND WHEREAS [FIRST PARTY NAME] is also the owner of the trade name [SPECIFY] and other trade names which include the word [SPECIFY], all of which [FIRST PARTY NAME] has adopted and used to identify [SPECIFY] other products sold or used therein, and which [FIRST PARTY NAME] uses, and controls the usage of, in order to maintain, identify and further develop the reputation and goodwill established with the public by the association of its trade name and trade marks with the high quality of products and services available at [SPECIFY];
AND WHEREAS [FIRST PARTY NAME] is the owner of the goodwill associated with its trade marks and with OPERATIONS throughout [COUNTRY] operated under a trade name which includes the word [SPECIFY];
AND WHEREAS [FIRST PARTY NAME] has developed standards and specifications for buildings, decor, equipment, equipment layouts, supplies and menus, quality and quantity standards, operating procedures for sanitation, maintenance, food and beverage storage, preparation and service, methods and techniques for inventory and cost controls, record keeping and reporting, personnel management, purchasing, sales, promotions and advertising;
AND WHEREAS the trade mark [SPECIFY] when displayed in or about a [SPECIFY] operating under a trade name which includes the word [SPECIFY], denotes to the public that the operation is either owned and operated by [FIRST PARTY NAME] or an operator licensed by [FIRST PARTY NAME];
AND WHEREAS by reason of the maintenance of high standards of quality of product and service in [SPECIFY] the enviable reputation of [FIRST PARTY NAME] would be severely damaged if operations operating under and/or using the name [SPECIFY] were not maintained and operated in accordance with the highest standards and if the [SPECIFY] sold therein were not sold under the highest possible sanitary conditions and if the service thereof was not made in a wholesome and appetizing manner;
AND WHEREAS [FIRST PARTY NAME] is in the business, among other things, of licensing [SPECIFY] operations to be opened and operated pursuant to license agreements, and the Licensee recognizes the benefits to be derived from a license issued by [FIRST PARTY NAME] to be identified with the name [SPECIFY] and desires to operate a [SPECIFY] operation, and the Licensee acknowledges having had a full and adequate opportunity to be thoroughly advised of the terms and conditions of this License Agreement by advisors of the Licensees own choosing;
AND WHEREAS it is the desire of the parties hereto that the Licensee acquire the license herein granted to operate a [SPECIFY] operation at the location hereinafter mentioned under and pursuant to the covenants, terms and conditions herein contained:

NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the covenants, conditions and provisions herein contained and in consideration of the full and faithful performance by the Licensee of each and every one of the covenants, terms and conditions herein contained, the parties hereto hereby covenant, warrant and agree as follows:


GRANT OF LICENSE

[FIRST PARTY NAME] hereby grants to the Licensee the right and license:

To use the above recited trade marks and trade names in the operation of a [SPECIFY] operation at the location known municipally as:

[FULL ADDRESS]
[STATE/PROVINCE], [STATE/PROVINCE]

Schedule A hereto annexed contains a more particular description of the lands and premises on and from which the [SPECIFY] operation is to be operated; and

In the operation of the [SPECIFY] operation, to use [FIRST PARTY NAME]s distinctive labels, designs, cartons, containers and advertising material furnished to the Licensee by [FIRST PARTY NAME] or its material suppliers from time to time at the Licensees request and expense; and

To sell, use and distribute in the [SPECIFY] operation only such products as designated by [FIRST PARTY NAME] including, but not limited to: [SPECIFY] product designated by [FIRST PARTY NAME], [SPECIFY] products and related products as approved or required by [FIRST PARTY NAME] (pursuant to Section 5.01) either for use on the premises or elsewhere.

This license relates solely to the location designated herein, and the granting thereof is subject to the terms and conditions herein contained.

Subject to earlier termination as herein provided, the Term of this License Agreement shall be [NUMBER] years and [NUMBER] days from the Commencement Date which is the [DATE] day of to [DATE] the Termination Date, which is the [DATE] day of [DATE] In the event the Licensee is unable to maintain tenure of the [SPECIFY] operation to the Termination Date, pursuant to the Lease (as defined in Section 3.5) or through ownership thereof, the term of this Agreement shall expire on the last day on which the Licensee is entitled to remain in possession of the [SPECIFY] operation.

At the expiry of the term hereof, this License may be renewed by [FIRST PARTY NAME] in its discretion acting reasonably and for successive periods of [NUMBER] years each, provided that:

the Licensee shall first apply for any such extension in writing at least [NUMBER] months, but not more than [NUMBER] months, prior to the end of the term, or renewal term, as the case may be;

the Licensee is not in default of any provision of this Agreement (which term includes any amendment or successor hereto), or other agreement between [FIRST PARTY NAME] (or its subsidiaries and affiliates unless the context requires otherwise), and the Licensee;

all monetary obligations of the Licensee to [FIRST PARTY NAME] have been satisfied prior to renewal, and timely met or default cured throughout the primary term and any prior renewals thereof;

the Licensee has consistently operated the [SPECIFY] operation in accordance with the standards of [FIRST PARTY NAME];

the Licensee executes [FIRST PARTY NAME]s then current standard form License Agreement which may include, without limitation, the payment of the then current License Fee, a revised Royalty Fee, and a higher or lower advertising contribution;

the Licensee has made or has provided for such renovation or modernization of the [SPECIFY] operation building as [FIRST PARTY NAME] may reasonably require from time to time, including, without limitation: signs, equipment, furnishings and decor, so as to reflect the then current image of [SPECIFY] OPERATIONS;

the Licensee has presented [FIRST PARTY NAME] with reasonable evidence to confirm that it is entitled to remain in possession of the [SPECIFY] operation during any renewal term;

such further and other matters as determined by [FIRST PARTY NAME] in its discretion, acting reasonably; and

the Licensee consents to the manner in which [FIRST PARTY NAME] intends to exercise its discretion as aforesaid.

During the term of this License Agreement, [FIRST PARTY NAME] shall not establish, or license another to establish, a [SPECIFY] operation within a geographic radius of one point five [NUMBER] kilometers of the location designated herein (the Trading Area) without the Licensees written consent, subject to the provisions of Section 1.6.

It is understood that the parties have agreed on the Trading Area specified in Section 1.5 as an assessment of the primary retail trading area within which the [SPECIFY] operation should be the only [SPECIFY] operation. If in the reasonable opinion of [FIRST PARTY NAME] a segment of the said Trading Area or a segment thereof plus a further area not included within the said Trading Area (the New Trading Area) will support a further [SPECIFY] operation, [FIRST PARTY NAME] may so advise the Licensee by notice in writing setting out the reasons why [FIRST PARTY NAME] is of such opinion and the area it deems to be the New Trading Area. If [FIRST PARTY NAME] should so advise the Licensee, the Licensee shall have the option for a period of [NUMBER] days from the date of such notice of making an application to install a further [SPECIFY] operation in such New Trading Area.

It is understood that the Licensee is under no obligation whatsoever to submit an application to license a further [SPECIFY] operation as referred to in paragraph (a). If the Licensee should make such application the same shall not be unreasonably rejected, and if accepted, the Licensee shall execute a further License Agreement for such new [SPECIFY] operation containing the then current License Fee, Royalty Fee and advertising contribution, and in form and content similar to the License Agreement then being utilized by [FIRST PARTY NAME] for licensee developed locations.  It is understood that in assessing the Licensees Application for a further [SPECIFY] operation, [FIRST PARTY NAME] shall take into account and assess whether or not in [FIRST PARTY NAME]s judgement the Licensee has the financial and managerial capabilities of owning and operating 2 or more [SPECIFY] OPERATIONS.

The provisions of this paragraph shall not apply until after the fifth anniversary of the Commencement Date. If in any year following the [NUMBER] anniversary of the Commencement Date of the [SPECIFY] operation, [FIRST PARTY NAME] should deliver a notice as contemplated pursuant to paragraph (a) and the Licensee should elect not to submit an application to establish a further [SPECIFY] operation within the said [NUMBER] day period (or should submit an application which is not unreasonably rejected by [FIRST PARTY NAME]), [FIRST PARTY NAME] shall have the right for a further period of [NUMBER] months of itself obtaining a location, or of accepting an application from a third party, for the purpose of establishing or causing to be established a further [SPECIFY] operation in the New Trading Area. 

Should [FIRST PARTY NAME] not exercise its aforesaid right the same shall lapse until delivery of a further notice under paragraph (a). For the sake of clarity, it is not intended that a further [SPECIFY] operation be established and operating within the time frames mentioned in this paragraph, but rather that an application therefore be submitted by the Licensee and approved by [FIRST PARTY NAME] within the time frames; the date by which such further [SPECIFY] operation be established and operating shall be as determined by the parties acting reasonably and is to be set forth in the License Agreement respecting the same.

The establishing of a further [SPECIFY] operation in the New Trading Area shall not preclude the continuing applicability of the provisions of paragraphs (a), (b) and (c) for the establishing of additional [SPECIFY] OPERATIONS, provided that [FIRST PARTY NAME] may not exercise the right set forth in paragraph (c) until [NUMBER] years have elapsed from the date of opening for business of any further [SPECIFY] operation within the New Trading Area. This paragraph shall be read with the intent that all changes to content necessary to comply with the circumstances are to be made and that it is the desire of [FIRST PARTY NAME] to establish as many [SPECIFY] OPERATIONS as may reasonably be supported within each trading area but not more often than every [NUMBER] years without the Licensees consent so as to permit each [SPECIFY] operation to become established before another is opened.

In the event any such further [SPECIFY] operation(s) be established in the Trading Area specified in Section 1.5 as a result of the foregoing provisions the portion(s) thereof included in the New Trading Area(s) shall be removed from the Trading Area specified in Section 1.5.


LICENSE FEE AND ROYALTY PAYMENTS

In consideration of the grant of the rights and privileges contained in the within License and the assistance involved in the pre-opening and ongoing operation of the [SPECIFY] operation the Licensee agrees to pay to [FIRST PARTY NAME] the non-refundable (save as expressly specified herein) License Fee of [AMOUNT], payable at the times and in the amounts set forth in the following sub paragraphs:

The principal amount of the License Fee of [AMOUNT] shall bear interest at the rate of [PERCENTAGE %] percent per annum calculated half-yearly not in advance, computed from the Commencement Date, and shall become due and be paid in equal consecutive installments on the Monday of each and every week in each and every year from 

and including the Monday next following the Commencement Date, to and including the Monday following the Termination Date (such installments to be applied first in payment of interest, at the said rate, calculated as aforesaid, on the principal from time to time unpaid, and the balance to be applied in reduction of the principal amount of the balance);

The amount of the installments due under the provisions of sub-paragraph (i) above shall be the sum of [AMOUNT];

In the event that the Commencement Date does not fall on a Monday, the first installment will be due and payable on the next following Monday and the appropriate adjustment in respect of the broken week will be made at the time of payment of the final installment due hereunder;

The Licensee shall have the privilege of prepaying all or any amount of principal outstanding on any principal and interest payment date or dates without notice or bonus;

Provided that when any partial additional payments are made the amount thereof shall be equal to the sum of the principal portions of a number of consecutive weekly installments which would otherwise become due hereunder next following the date upon which such additional payment(s) is (are) made, 

and the payment dates of all remaining installments and of the balance owing under paragraph 2.1 shall be accelerated so that the Licensee shall pay the aforesaid weekly installments in each and every week, commencing with the week immediately following the week in which the additional payments(s) is (are) made and continuing until all monies owing under paragraph 2.1 shall have been fully paid;

At all times, the balance owing under paragraph 2.1 shall be ascertained by means of a computer printout obtained from nationally recognized computing services company based on the criteria outlined in this paragraph 2.1 and in the event of a dispute the result obtained from such computer printout shall be final and binding on both [FIRST PARTY NAME] and the Licensee.

The Licensee shall pay to [FIRST PARTY NAME] a recurring non-refundable Royalty Fee, to be paid weekly during the term hereof, in an amount equal to [PERCENTAGE %] percent of the Gross Sales of the [SPECIFY] operation calculated weekly. The said sum shall be payable by check on the Monday of each and every week and attached to such check shall be a complete report on the Gross Sales and inventory used on the forms prescribed by [FIRST PARTY NAME].

The Licensee shall, in addition, pay to [FIRST PARTY NAME] weekly the percentage of Gross Sales for advertising purposes as set out in Section 8.01 hereof.

The term Gross Sales as used herein shall include the aggregate amount of all sales, receipts, receivables, sales of merchandise made or services rendered in, at, on, or from the [SPECIFY] operation and sales wherever made of products stored on the [SPECIFY] operation, or any business conducted from the [SPECIFY] operation, whether made on a cash basis, or on credit, paid or unpaid, collected or uncollected, including deposits not refunded to customers, and the amount of any orders received at or solicited from the [SPECIFY] operation although such orders may be filled elsewhere. Each charge or sale upon credit shall be treated as a sale for the full price in the week during which such charge or sales shall be made, irrespective of the time when the Licensee shall receive payment (whether full or partial) therefore. 

The Licensee shall be entitled to deduct from Gross Sales to the extent the Licensee has included therein: any gratuities to employees, sales, goods and services or excise taxes imposed by any governmental authority, added to and shown separately from the price of a sale or service, collected from the customer and in turn paid by the Licensee to or credited as paid by such governmental authority, promotion discounts approved by [FIRST PARTY NAME], and [SPECIFY] coupon redemptions, consistent with [FIRST PARTY NAME]s policy consistently applied and in effect from time to time. Gross Sales shall not include meals served to employees and consumed on the premises, provided an accurate list of such meals consumed is reported on the weekly report from herein referred to. Any installation fee, continuing rental, or percentage of sales or other revenue received by the Licensee from vending and other machines and public telephones permitted to be installed under Section 3.10 shall form part of Gross Sales.

In the event of a business interruption as a result of a peril in respect of which the Licensee is required to carry business interruption insurance (gross earnings form) under this Agreement, the Licensee shall continue to make payment to [FIRST PARTY NAME] of the weekly amounts due under Section 2.1, if any, and under Sections 2.2 and 2.3 on the basis of the average weekly payments made during the [STATE/PROVINCE] weeks immediately preceding the occurrence, and such other payments as are required under the terms of this Agreement and any other agreement between the parties affecting the [SPECIFY] operation.

The Licensee shall also pay to [FIRST PARTY NAME] an amount equal to any federal, provincial and local sales, goods and services, value added, gross receipts, use or similar taxes assessed against or payable to [FIRST PARTY NAME], if any, with respect to any fees, rentals, royalties, or other payments to [FIRST PARTY NAME], (unless the tax is an income tax payable by [FIRST PARTY NAME]. Such amounts are payable in the case of goods and services taxes concurrently with the payment of fees, rentals, royalties, and other payments, and otherwise, within [NUMBER] days after receipt of [FIRST PARTY NAME]s invoice therefore.


SITE SELECTION, STANDARD PLANS COMPLETION AND EQUIPPING OF BUILDING, TRAINING, OPENING ASSISTANCE, CONTINUING ASSISTANCE 

As this License Agreement arises out of the transfer of ownership of the [SPECIFY] operation, certain provisions of a standard license agreement for a licensee-developed location are not applicable. Accordingly, during the term of this License and any renewal hereof, [FIRST PARTY NAME] shall, at its expense, offer to the Licensee the following:

The loan of [FIRST PARTY NAME]s Confidential Operating Manual covering daily operations of a [SPECIFY] operation. The contents of such Manual shall be in [FIRST PARTY NAME]s absolute discretion. Should [FIRST PARTY NAME] revise the Manual from time to time it shall provide the Licensee with a copy of such revisions for insertion in the Licensees copy;

An initial set of accounting forms for reporting daily and weekly transactions and analyzing costs;

Impart to the Licensee all new or improved methods and methodology adopted by [FIRST PARTY NAME] in the operation of [SPECIFY] OPERATIONS generally and instruct the Licensee in the use of such new and improved methods and methodology;

Make available to the Licensee for purchase, sale and use, as applicable, all products, menus, and other items pertaining to the operation of [SPECIFY] operations generally;

Such continuing individual or group counselling, field supervision, assistance and consultation in the operation of the [SPECIFY] operation as [FIRST PARTY NAME] may in its absolute discretion deem necessary or advisable.

The Licensee agrees that he will actively and in good faith attend and participate in the training course offered by [FIRST PARTY NAME] in the operation of the [SPECIFY] operation prior to its opening for a minimum period of 12 weeks and at such locations (which may include [STATE/PROVINCE], [STATE/PROVINCE]) as may be stipulated by [FIRST PARTY NAME]. If the Licensee is a corporation, a designated shareholder who will be active in the day to day operation of the [SPECIFY] operation, or a designated manager shall actively and in good faith attend and participate in the said training course.  If the Licensee, or if the Licensee is a corporation, the designated shareholder or manager, fails to successfully complete the training course of which [FIRST PARTY NAME] acting reasonably shall be the judge, then [FIRST PARTY NAME] may in its absolute discretion cancel and terminate this Agreement, retain the non-refundable portion of the deposit referred to in Section 2.1 as liquidated damages and not as a penalty and this Agreement shall be of no further force and effect.

In the event that the Licensee should not acquire but lease the approved location the terms and conditions of each lease or sublease, and any amendments thereto or replacement thereof, of the location shall be subject to the approval of [FIRST PARTY NAME], which approval shall not be unreasonably withheld. Such lease or sublease (the Lease) shall, inter alia, contain provisions to the following effect:

That [FIRST PARTY NAME] shall be entitled to notice of any default thereunder which may result in termination or forfeiture of the term;

That [FIRST PARTY NAME] shall within the same period of time as allowed the Licensee be permitted to cure such default;

That if [FIRST PARTY NAME] corrects the default it shall be entitled to enter into and take possession of the demised premises on the same terms and conditions as the Licensee as if it were the named tenant thereunder;

That if this License Agreement becomes terminated or forfeited for any reason [FIRST PARTY NAME] shall be entitled to enter into and take possession of the demised premises on the same terms and conditions as if it were the tenant thereunder;

That the lease may be assigned to [FIRST PARTY NAME] and in turn by it to any licensee of it without the consent of the landlord, provided that on any assignment to [FIRST PARTY NAME], [FIRST PARTY NAME] shall have indicated its approval to such assignment;

That [FIRST PARTY NAME], if it takes possession of the demised premises pursuant to paragraph (c) or (d) above or accepts an assignment pursuant to paragraph (e), shall be required to deliver forthwith to the landlord an agreement wherein it covenants to assume and be responsible for compliance with all terms and conditions set forth in the Lease;

That on the termination of this Agreement and/or the Lease, and if [FIRST PARTY NAME] does not exercise its rights to acquire the [SPECIFY] operation under this Agreement, the Licensee shall be permitted to, and the Licensee hereby covenants that it shall, and failing performance by the Licensee [FIRST PARTY NAME] shall be permitted to, enter the demised premises and at the expense of the Licensee, make such modifications and alterations, interior and exterior, including removal of all signs and advertising material, as necessary to protect the [FIRST PARTY NAME] trade names, trade marks, distinctive building design, layout and related matters as [FIRST PARTY NAME] may reasonably require such that any business to be carried on thereafter does not appear to be a [SPECIFY] operation;

That the landlord must provide non-disturbance agreements to the Licensee and to [FIRST PARTY NAME] from all prior encumbrancers of the Demised Premises.

The Licensee shall equip the [SPECIFY] operation with the equipment listed in Schedule B hereto.  [FIRST PARTY NAME] at the request of the Licensee will arrange for the Licensee to purchase the same at the same prices as [FIRST PARTY NAME] would be charged if it were establishing the [SPECIFY] operation plus reasonable expenses incurred thereby and in such event the Licensee will execute [FIRST PARTY NAME]s current Agency Agreement relating thereto. The Licensee acknowledges, covenants and agrees that he shall also purchase at his own cost and expense the smallwares required for the operation of the [SPECIFY] operation as detailed in a smallwares list which is annexed hereto as Schedule C and will repair or replace, or make additions thereto as is necessary from time to time for proper operation of the [SPECIFY] operation in accordance with this Agreement.

No item of advertising material, merchandise, supplies, furnishings, utensils or equipment other than such as specified by [FIRST PARTY NAME] shall be brought into, installed, displayed or used upon or in the [SPECIFY] operation without the express prior written consent of [FIRST PARTY NAME], which consent may be arbitrarily withheld.

The Licensee shall not install, cause to be installed, purchase or lease, vending machines of any type, including public telephones, entertainment devices and products not referred to herein, nor may the same be sold, operated, displayed or used in the [SPECIFY] operation, without the prior written approval of [FIRST PARTY NAME], which consent may be arbitrarily withheld; provided that if such are in use or sold generally in other [SPECIFY] OPERATIONS such consent may not be unreasonably withheld.

OPERATION OF [SPECIFY] OPERATION

The Licensee covenants and agrees to use the [SPECIFY] operation solely for the purpose of a [SPECIFY] operation and will not use or permit to be used the lands and premises on which the [SPECIFY] operation is located for any other purpose or activity.

The Licensee covenants and agrees that the [SPECIFY] operation shall not be operated by a sub-licensee.

The Licensee covenants and agrees that he will faithfully, honestly and diligently perform his duties and either personally or through a full time manager, will devote his entire working time, labor, skill and attention to the operation of the [SPECIFY] operation and will abide by all the covenants, terms and provisions contained in this Agreement. If the Licensee is a corporation, the Licensee shall advise [FIRST PARTY NAME] as to which shareholder shall be primarily responsible for the day to day operations of the [SPECIFY] operation and who is to be the person contacted initially with respect to day to day operations. 

The Licensee, if a corporation, shall employ a full time manager who is approved by [FIRST PARTY NAME] and who has successfully completed [FIRST PARTY NAME]s [NUMBER]-week training course. However, if the Licensee is a licensee from [FIRST PARTY NAME] with respect to one or more other OPERATIONS the Licensee or the designated shareholder shall be required to devote his entire working time, labor, skill and attention to the operation of all OPERATIONS affected by licenses from [FIRST PARTY NAME] including the [SPECIFY] operation. The Licensee covenants that he will diligently attempt to achieve the maximum Gross Sales from the [SPECIFY] operation and will promote and make every reasonable effort to steadily increase the Gross Sales from the [SPECIFY] operation.

The Licensee acknowledges that [FIRST PARTY NAME] maintains high standards of quality of product and service in [SPECIFY] OPERATIONS and that [FIRST PARTY NAME] may in the interest of improving thereon and enhancing public acceptance of [SPECIFY] OPERATIONS, upgrade its standards from time to time. Therefore, in order to maintain a uniform standard of operation and quality for all licensees operating under the name [SPECIFY] and to further protect the goodwill of [FIRST PARTY NAME] the Licensee covenants and agrees that:

The Licensee shall operate the [SPECIFY] operation in conformity with such uniform methods, standards and specifications as [FIRST PARTY NAME] may from time to time prescribe for general application in the Confidential Operating Manual or otherwise in writing to ensure that the highest degree of quality and service is uniformly maintained, refrain from any deviation therefrom and from otherwise operating in any manner which reflects adversely on [FIRST PARTY NAME]s name and goodwill, or on the name [SPECIFY], associated with the [SPECIFY] operation;

The Licensee at its own expense shall provide sufficient and proper management, supervisory and other personnel for the operation of the [SPECIFY] operation in accordance with [FIRST PARTY NAME]s standards and requirements and methods now or hereafter defined by [FIRST PARTY NAME].  In particular, but without limitation, all managers and assistant managers shall be required to complete [FIRST PARTY NAME]s [NUMBER] week training course prior to working in such capacity in the [SPECIFY] operation. The Licensee covenants to remove any manager or other supervisory personnel or staff members who at any time do not meet the reasonable requirements of [FIRST PARTY NAME] within [NUMBER] days after receipt of a written demand from [FIRST PARTY NAME] to do so;

The Licensee will at all times make all possible efforts to ensure that the products sold from the [SPECIFY] operation are of uniformly high quality and properly and courteously served and so as to be a credit to the Licensee, to [FIRST PARTY NAME] and to other licensees of [FIRST PARTY NAME] operating [SPECIFY] OPERATIONS;

The Licensee obliges himself to require his employees to conduct themselves properly and courteously at all times toward all customers, and shall enforce compliance by employees of the uniform and dress codes set by [FIRST PARTY NAME];

[FIRST PARTY NAME] may at all times determine reasonable standards of quality, service, production, merchandising and advertising, subject to the provisions of paragraph 4.4(i), credit card usage, and the prices of all products sold in the [SPECIFY] operation. Notwithstanding the approved prices at which products may be sold in the [SPECIFY] operation, the Licensee may sell any or all of such products at prices less than the approved prices;

[FIRST PARTY NAME] or its authorized representatives shall have the right at all reasonable times to enter and remain in the [SPECIFY] operation, to inspect the [SPECIFY] operation and its equipment, the books and records, the quality of food sold by the Licensee, and the manner of operation of the [SPECIFY] operation; the Licensee is to assist and co-operate during any such inspection, and upon notice from [FIRST PARTY NAME] take such steps as may be necessary immediately to correct any deficiencies detected during any such inspection;

The Licensee shall at all times maintain a sufficient supply of approved products to meet the public demand, provided that approved products are available for purchase and without limiting the generality of the foregoing, shall further maintain a sufficient inventory of products to meet any delivery shortfalls which might reasonably be expected to occur from time to time;

The Licensee shall continuously operate the [SPECIFY] operation upon such days and during such hours as [FIRST PARTY NAME] shall reasonably determine, but only to the extent lawful and subject to the direction and request of governmental authorities;

The Licensee will comply with all applicable local and governmental laws and regulations and specifically any Board of Health requirements as well as [FIRST PARTY NAME]s regulations and directives pertaining to the operation and use of the [SPECIFY] operation, the equipment in the [SPECIFY] operation and the production and sale of products in the [SPECIFY] operation. The Licensee shall request a copy of any inspection report or citation issued by the Board of [SPECIFY], or any other governmental agency pertaining to the inspection, use or operation of the [SPECIFY] operation and the Licensees employees and shall upon receipt forthwith provide a copy of such inspection report or citation to [FIRST PARTY NAME]; should the Licensee fail to provide the same [FIRST PARTY NAME] shall be entitled to contact the appropriate authority and obtain a copy on request and [FIRST PARTY NAME] is hereby authorized to obtain the same. If specific authorization is required by any such authority the Licensee covenants to execute and deliver the same forthwith on request from [FIRST PARTY NAME];

The Licensee shall at all times maintain the [SPECIFY] operation and all equipment therein in a good state of repair, including periodic redecoration, free from the accumulation of rubbish, and in a neat and wholesome condition, in the highest degree of sanitation, and shall maintain the parking lot, sidewalks, landscaping and other amenities to the [SPECIFY] operation all in first class condition, and shall comply with all lawful requirements of federal, provincial or municipal provisions, statutes, rules, orders, regulations, by-laws or 

other governmental directives which relate to the partition, equipment, operation or use of the [SPECIFY] operation and to the making of any repairs, replacements, alterations, additions, changes, substitutions or improvements, of or to the [SPECIFY] operation necessary to maintain the same in first class condition, and to comply with the police, fire, and sanitary regulations or made by fire insurance underwriters. 

Without limiting the generality of the foregoing, the Licensee shall refurbish, remodel or redecorate the [SPECIFY] operation upon [FIRST PARTY NAME]s request, which is not to be unreasonably issued, and no more often than once every [NUMBER] years, to conform to the building design, trade dress, color schemes, fixtures, interior layout and related matters consistent with [FIRST PARTY NAME]s then current standards, and provided that such standards of refurbishing, remodeling or redecorating are consistently applied to [SPECIFY] OPERATIONS where possible in accordance with reasonable business practices;

The Licensee and the Guarantor will comply with all of the terms and conditions of any and all agreements and instruments to which the Licensee is a party or to which it is bound in connection with the [SPECIFY] operation, including the Lease of the subject premises, if any, and any loan and security documents.

The Licensee and its supervisory personnel shall attend at their own expense such course(s), convention(s) or seminar(s) as may be conducted or designated by [FIRST PARTY NAME] from time to time.  The Licensee shall further purchase, at its own expense, the [SPECIFY] training video tape series, and any subsequent editions thereof and supplements and additions thereto, as well as any other video tapes which [FIRST PARTY NAME] may designate from time to time for use by managers and franchisees of [SPECIFY] OPERATIONS.  The Licensee shall further purchase, at its own expense, a video cassette recording machine upon which to play the aforesaid video tapes, the model and manufacturer of which have been approved by [FIRST PARTY NAME], and shall keep such machine located in the [SPECIFY] operation.

The Licensee shall at all times be responsible for and pay all costs and expenses relating to the operation of the [SPECIFY] operation including but without limiting the generality of the foregoing:

All necessary [SPECIFY PRODUCTS] and services;

The hiring, training, managing and disciplining of all personnel necessary for the proper operation of the [SPECIFY] operation and shall ensure that all applicable [YOUR COUNTRY LAW] and collective agreements relating to the terms of employment are complied with;

The maintenance and processing of all time-keeping records, processing of payrolls and the payment of all wages for all personnel of the [SPECIFY] operation, and shall ensure that all government regulations are complied with including the withholding and remittance of income tax deductions, pension contributions and unemployment insurance, and processing and remittance of all assessments made in accordance with any applicable government regulations;

The maintenance of [FIRST PARTY NAME]s approved accounting system and proper accounts and records of the [SPECIFY] operation including all invoices, receipts, vouchers and payroll records relating thereto;

The handling and banking of all receipts from the operation of the [SPECIFY] operation;

The handling, processing and payment of all invoices for food, beverages, supplies and services purchased for or necessary for the [SPECIFY] operation;

Ensuring compliance with all applicable health, sanitary, other laws, regulations and enactments of any competent governmental authority relating to the operation of the [SPECIFY] operation and personnel employed therein;

The maintenance of all records and the remittance of all monies required under the provisions of all applicable legislation including applicable government sales tax statutes;

The Licensee shall at all times maintain in full force and effect comprehensive general liability insurance, including products with limits as specified by [FIRST PARTY NAME] and in any event for not less than a [AMOUNT] combined limit with respect to property damage, bodily injury, and/or personal injury combined per occurrence, and naming [FIRST PARTY NAME] as an additional named insured (with severability of interests and cross liability clause) respecting the [SPECIFY] operation and the business conducted therefrom and thereon;

The Licensee shall at all times maintain in full force and effect all risks property insurance to the full replacement value of property of every description in, on or about the [SPECIFY] operation in the name of the Licensee and naming [FIRST PARTY NAME] as an additional named insured as their respective interests may appear, with a waiver of subrogation clause;

The Licensee shall at all times maintain in full force and effect, comprehensive broad boiler and machinery insurance covering all insurable objects together with such other insurance and always with such limits as may be required by statute, rule of [YOUR COUNTRY LAW], [FIRST PARTY NAME], acting reasonably, or normally carried by reasonable and prudent operation business operators or other agreement(s) affecting the Licensee and/or the [SPECIFY] operation and/or the equipment in the name of the Licensee and naming [FIRST PARTY NAME] as an additional named insured as their respective interests may appear, with a waiver of subrogation clause;

Property and boiler and machinery insurance policies shall include business interruption coverage (gross earnings form) including royalty and other payments due to [FIRST PARTY NAME] under the terms of this Agreement, the Lease, if any, and any other agreement between the parties affecting the [SPECIFY] operation;

The Licensee shall provide [FIRST PARTY NAME] with a certified copy of any insurance policy, including renewals, required to be maintained by the Licensee under this Agreement or any other agreement between the parties respecting the [SPECIFY] operation; said insurance policies shall be obtained from a reputable insurance company (ies) acceptable to [FIRST PARTY NAME] acting reasonably and shall provide for not less than [NUMBER] days written notice to [FIRST PARTY NAME] in the event of policy termination;

Should the Licensee, for any reason, fail to procure and maintain the insurance required by this Agreement, [FIRST PARTY NAME] shall have the right, at its option, to procure such insurance and to charge the cost of same to the Licensee, which charges, together with a reasonable fee for [FIRST PARTY NAME]s expense in so acting, shall be payable by the Licensee immediately upon demand;

The cost of full compliance with the terms and conditions of this Agreement and all costs and expenses whatsoever relating to the operation and use of the [SPECIFY] operation including, but not limited to: realty and business taxes, school taxes, utility services, maintenance and repair, permits, licenses, insurance and rent payable under any lease to which the Licensee is a party.

If requested by [FIRST PARTY NAME], the Licensee shall provide [FIRST PARTY NAME] with a duplicate set of keys to the [SPECIFY] operation to be used by [FIRST PARTY NAME] in the event of fire, robbery, audits required to be taken by [FIRST PARTY NAME] under Article [NUMBER] hereof, abandonment of the [SPECIFY] operation by the Licensee, and for such other justifiable reasons as determined by [FIRST PARTY NAME].

SUPPLIES AND PRODUCTS

The Licensee covenants and agrees:

To advertise, sell, distribute and use only such services, products and supplies as are designated by [FIRST PARTY NAME] for [SPECIFY] OPERATIONS generally and to purchase the said products and supplies from sources and purveyors who are selected by [FIRST PARTY NAME], or approved by [FIRST PARTY NAME] from time to time, in its absolute discretion, and to discontinue purchasing from sources and purveyors who have been disapproved by [FIRST PARTY NAME];

That all products and menu items must be of uniformly high quality and in such quantity as expressly specified and approved by [FIRST PARTY NAME] and prepared in accordance with [FIRST PARTY NAME]s methods and techniques for product preparation;

That all products and menu items must be of uniformly high quality and in such quantity as expressly specified and approved by [FIRST PARTY NAME] and prepared in accordance with [FIRST PARTY NAME]s methods and techniques for product preparation;

To sell all approved items pursuant to a menu in form and content approved by [FIRST PARTY NAME] and at prices approved by [FIRST PARTY NAME] in its absolute discretion.  Notwithstanding the approved prices at which products may be sold in the [SPECIFY] operation, the Licensee may sell any or all of such products at prices less than the approved prices;

To sell all products and items as may be designated by [FIRST PARTY NAME] from time to time for sale in [SPECIFY] OPERATIONS generally, it being understood and agreed that [FIRST PARTY NAME] in its discretion may vary, expand, supplement or amend the [SPECIFY] operation menu from time to time during the term of this Agreement; and

To participate in all promotions initiated by [FIRST PARTY NAME], whether national, regional or local, which [FIRST PARTY NAME] designates as applying to the [SPECIFY] operation.

In order to ensure the uniformity and quality of the products sold by the Licensee to the public, [FIRST PARTY NAME] may specify and monitor all purveyors and suppliers, including alternate purveyors and suppliers. [FIRST PARTY NAME] for such services may require and accept fees and/or allowances, provided such monitoring, service, or rebate fees, or allowances, shall be paid by the purveyors and suppliers, and which sums, when received by [FIRST PARTY NAME], shall in no way reduce the sums to be paid to [FIRST PARTY NAME] or to the purveyors or suppliers by the Licensee.

The Licensee recognizes and acknowledges that if [FIRST PARTY NAME] were not in a position to require or accept the aforementioned monitoring service or rebate fees or allowances, a greater license fee and/or royalty payment would be demanded by [FIRST PARTY NAME] from the Licensee hereunder. [FIRST PARTY NAME] shall at its expense locate and interview purveyors and suppliers with the view to providing Licensee with access to supplies and products at wholesale competitive prices, obtain such market data and analyses, conduct quality tests, and inspect merchandise for uniformity and quality, at such times as it may deem necessary or desirable in its absolute discretion

All such aforesaid supplies and products shall be purchased by the Licensee directly from the suppliers and purveyors designated or approved by [FIRST PARTY NAME] and the suppliers and purveyors shall be required to invoice the Licensee for all purchases. The Licensee hereby undertakes to pay such invoices within [NUMBER] days of their date or pursuant to such other credit arrangements as agreed on by the suppliers and purveyors.


ACCOUNTING AND RECORDS

The Licensee agrees to maintain and preserve, during the term of this License 

Agreement, full, complete and accurate books, records and accounts in accordance with generally accepted accounting principles and in the form and manner prescribed by [FIRST PARTY NAME] from time to time. [FIRST PARTY NAME] agrees to instruct the Licensee and his accountant in the use of its accounting system if requested by the Licensee.

The Licensee shall furnish [FIRST PARTY NAME] with accurate weekly reports and operating statements together with duplicate cash register readings showing Gross Sales, in the form prescribed by [FIRST PARTY NAME] for the [SPECIFY] operation. Within [NUMBER] days following the end of each four week period the Licensee shall furnish an operating statement and balance sheet in respect of the [SPECIFY] operation in the form prescribed by [FIRST PARTY NAME] which is to include Gross Sales, receipts and expenses; such statements may be unaudited. Within [NUMBER] days after the end of the Licensees fiscal year, the Licensee shall provide [FIRST PARTY NAME] with audited (or certified by a chartered accountant) financial statements for such fiscal year with respect to the [SPECIFY] operation.

If, from time to time, [FIRST PARTY NAME] desires an independent audit to be made of the Licensees books and records pertaining to actual operation of the [SPECIFY] operation, the Licensee hereby grants [FIRST PARTY NAME] the right to do so and the cost of such audit or audits shall be paid by [FIRST PARTY NAME], except that should any audit disclose any discrepancy which would result in an increase in the amount due to [FIRST PARTY NAME] in excess of [AMOUNT] for any four week period accounted for, then the reasonable cost of such audit shall be paid by the Licensee upon demand by [FIRST PARTY NAME].

The Licensee shall not under any circumstances whatsoever allow, permit or operate with an open cash register drawer between registration of sales; and every transaction or sale in, upon or from the [SPECIFY] operation shall be registered on or upon the cash register installed, the approved manufacturer of which is listed in Schedule B. The Licensee shall use the cash register program designated by [FIRST PARTY NAME].

All vouchers, cash register tapes, receipts, books and records related to Gross Sales and required to be kept by the Licensee shall be retained by him at least [NUMBER] months following the expiration of each year of the term of this License.

Notwithstanding any other provision of this Agreement regarding manner and timing of payment, upon [NUMBER] days notice in writing, Licensee agrees to participate fully in any form of automatic/telecommunication deposit system implemented by [FIRST PARTY NAME] for the payment of fees, royalties or other monies owed to [FIRST PARTY NAME] hereunder.

SCHEDULE A  -  LEGAL DESCRIPTION
SCHEDULE A-1-  TRADEMARK REGISTRATIONS
SCHEDULE B  -  STANDARD COMPANY NAME EQUIPMENT PACKAGE
SCHEDULE C  -  STANDARD COMPANY NAME SMALLWARES PACKAGE
SCHEDULE D  -  TERMS OF PURCHASE OPTION ON TERMINATION


TRADE MARKS AND TRADE NAMES

The Licensee shall adopt and use only the trade names which include the word [SPECIFY] and [FIRST PARTY NAME]s trade marks and trade names in the operation of the [SPECIFY] operation, in such manner, form and style as shall be designated or approved in writing by [FIRST PARTY NAME].

The Licensee shall use the trade marks and trade names of [FIRST PARTY NAME] (hereinbefore recited and any of which [FIRST PARTY NAME] may hereafter designate), only in connection with the operation of the [SPECIFY] operation, and shall not use any other name or names, alone or in connection with the trade name which includes the word [SPECIFY], the [FIRST PARTY NAME] trade marks or trade names, in the operation of the [SPECIFY] operation. Further, the Licensee shall not display any signs, use any advertising materials, nor engage in, or make any solicitation in connection with the operation of the [SPECIFY] operation without the prior written consent of [FIRST PARTY NAME]. The Licensee will place in a conspicuous position in the [SPECIFY] operation a notice that it is a Licensee of [FIRST PARTY NAME] and that it is not in any way associated with, related to, or affiliated with [FIRST PARTY NAME].

The Licensee shall not use any trade names or trade marks of [FIRST PARTY NAME] as part of the Licensees corporate or other personal business name, nor shall the Licensee hold out or otherwise employ the trade names or trade marks to perform any activity, or to incur any obligation or indebtedness in such a manner as might in any way make [FIRST PARTY NAME] liable therefore, without [FIRST PARTY NAME]s prior written consent.

The Licensee shall observe such requirements with respect to trade mark and/or trade name registration, registration of Licensee as a user of [FIRST PARTY NAME]s trade marks, notices of trade mark and/or trade name ownership, and copyright notice and registration, and execute all documents pertaining to such registrations, as [FIRST PARTY NAME] may from time to time require in writing. Any application for registration by the Licensee to use the trade name which includes the word [SPECIFY] which may be required by the laws or statutes or any governing or governmental unit or body shall specify that the same are owned by [FIRST PARTY NAME] and the Licensees use of the said name is limited to the [SPECIFY] operation pursuant to the provisions of a License Agreement expiring on the date set forth herein, subject to earlier termination in accordance with the terms hereof. In the event of any of such registrations, no property, right and/or privilege to use the said name is created which will extend beyond termination of this Agreement.

For the purpose of facilitating the registration of the Licensee under the provisions of the [YOUR COUNTRY] Trade Marks [ACT/LAW/RULE] or succeeding legislation, as a user of [FIRST PARTY NAME]s trade marks and ensuring compliance with paragraph 7.4(a) in respect thereof, the Licensee hereby appoints the Secretary of [FIRST PARTY NAME] for the time being as its true, lawful and authorized attorney in fact for it and in its name, place and stead, to execute, deliver and amend any and all documents and instruments as fully and effectually as the Licensee could do if personally acting, as may be required for the purposes of registration or de-registration of the Licensee as a user of the trade marks of [FIRST PARTY NAME], it being expressly understood that the Secretary of [FIRST PARTY NAME] may delegate such authority to such other person or persons as he or she, in his or her absolute discretion, deems appropriate, and the Licensee hereby ratifies and confirms all actions taken in pursuance of the authority herein conferred upon the Secretary of [FIRST PARTY NAME] and agrees to execute any documents requested by [FIRST PARTY NAME] to specifically witness such ratification and confirmation.

The license herein granted to use the trade name which includes the word [SPECIFY] and the trade marks and trade names hereinbefore recited, is exclusive for the [SPECIFY] operation only, and the privileges herein granted are applicable only to the [SPECIFY] operation to be established pursuant to this Agreement and not elsewhere. Specifically, [FIRST PARTY NAME] has and retains the right to grant additional licenses in addition to those licenses granted to existing licensees. The Licensee acknowledges that the use of the said trade marks and trade names outside the scope of this License Agreement without [FIRST PARTY NAME]s consent, is an infringement of [FIRST PARTY NAME]s right, title and interest therein and expressly covenants that during the term of this License Agreement and after the expiration or termination thereof, the Licensee shall not, directly or indirectly, commit an act of infringement or contest, or aid in contesting, the validity or ownership of [FIRST PARTY NAME]s trade marks and trade names, or take any action in derogation thereof and in the event of the Licensee so doing this Section 7.05 may be pleaded against him.

Neither this Agreement nor the operation of the [SPECIFY] operation gives the Licensee any interest in any of the [FIRST PARTY NAME] trade marks and trade names or the goodwill attached thereto. The Licensee expressly acknowledges [FIRST PARTY NAME]s right, title and interest in and to the trade marks and trade names and agrees not to represent in any manner that the Licensee has any ownership in [FIRST PARTY NAME]s trade marks and trade names. The Licensee further agrees that his use of the trademarks and trade names shall not create in his favour any right, title or interest in or to [FIRST PARTY NAME]s trade marks and trade names except as the right to use the same is expressly set forth herein. All such trade marks, trade names and goodwill arising therefrom or associated therewith shall belong to and enure to the exclusive benefit of [FIRST PARTY NAME], its successors and assigns. 

The Licensee shall promptly notify [FIRST PARTY NAME] of any claim, demand or cause of action based upon or arising from any attempt by any other person, corporation or other entity to use the trade marks and trade names licensed hereunder, or any colourable variation thereof, in which [FIRST PARTY NAME] has or claims a proprietary interest. The Licensee also agrees to notify [FIRST PARTY NAME] promptly of any litigation instituted by any person, corporation or other entity or by any governmental agency against [FIRST PARTY NAME] or the Licensee involving [FIRST PARTY NAME]s trade marks and trade names. If [FIRST PARTY NAME] undertakes the defence or prosecution of any litigation relating to the trade marks or trade names it shall do so at its expense, and the Licensee agrees to execute any and all documents and to do such acts and things as may, in the opinion of counsel for [FIRST PARTY NAME], be necessary to carry out such defence or prosecution. If [FIRST PARTY NAME] should be unsuccessful in its defence or prosecution relating to the trade marks or trade names, the Licensee shall have no claim for damages against [FIRST PARTY NAME] arising as a result thereof.

The Licensee covenants and agrees that immediately upon the termination of this Agreement he will not use the word [SPECIFY] in any manner or form, any colourable imitations thereof or any other word(s) containing the word [SPECIFY], and/or commencing with the letters [SPECIFY] or ending with the letters [SPECIFY] in connection with the operation of an operation or related business or wares. The Licensee further covenants and agrees not to make known either directly or indirectly in any manner or form, that the Licensee had any previous connection with an operation operating under a trade name including the word [SPECIFY].

In the event of cancellation or termination of this Agreement for whatever reason the Licensee shall immediately remove all reference to the trade marks and trade names of [FIRST PARTY NAME] herein before referred to and shall indicate clearly by signs and other suitable means that [FIRST PARTY NAME] is no longer connected with the [SPECIFY] operation business in any way.
The Licensee agrees that the standard building plans and specifications, layouts, decorative schemes, operating methods and procedures, the accounting methods and procedures, and the manuals of operation, including the Confidential Operating Manual, prepared by [FIRST PARTY NAME] and made available to the Licensee as well as any and all other trade secrets and confidential information, knowledge and know-how (operating methods and procedures, product secrets, product formulae, labor control systems, advertising techniques and strategies and any information or methods unique to the [SPECIFY] business operation) concerning the construction and operation of the [SPECIFY] operation that may be imparted by [FIRST PARTY NAME] to the Licensee from time to time are unique and confidential and the Licensee shall use all reasonable efforts to maintain such information as secret and confidential. 

7.11  The Licensee shall divulge such information only to such of his employees as must have access to it in order to operate the [SPECIFY] operation and shall not make the same available to any unauthorized person or source. All of the aforementioned matters referred to in the first sentence of this Section shall at all times be deemed and remain the sole property of [FIRST PARTY NAME], and the Licensee shall acquire no right, title or interest therein or thereto except to possess and use the same in connection with the [SPECIFY] operation during the term of this Agreement. If required by [FIRST PARTY NAME], the Licensee and its employees will execute non-disclosure agreements for the benefit of [FIRST PARTY NAME].


ADVERTISING

[FIRST PARTY NAME] acknowledges that in order to promote and enhance the public image of all [SPECIFY] OPERATIONS in [COUNTRY], it will carry on general advertising and promotions for the benefit of the [SPECIFY] operation system as a whole. The Licensee acknowledges that all matters pertaining to such advertising and promotions shall be in the sole discretion of [FIRST PARTY NAME] including, without limitation, the following:

the type and nature of such advertising and promotions;

selection of media;

timing of all advertising and all promotions;

designation of trading areas to benefit from advertising and promotions; and

selection of advertising agencies and promotion houses.

The Licensee acknowledges and agrees that [FIRST PARTY NAME] undertakes no obligation to ensure that any individual licensee benefits directly or pro rata in his trading area from the placement of any advertising or promotions.

The cost of such advertising and promotions shall be contributed to by the Licensee in an amount equal to [PERCENTAGE %] percent of the Licensees Gross Sales calculated weekly. The said sum shall be paid by check on the Monday of each week and shall accompany the Royalty Fee required to be paid pursuant to Section 2.2 and the weekly report and operating statement required to be provided pursuant to Section 6.2.

[FIRST PARTY NAME] agrees to set aside the funds received pursuant to this Section and from all licensees pursuant to the corresponding section in their respective license agreements, and to apply the same for general advertising and marketing purposes and expenses incurred in relation thereto. The Licensee acknowledges that the allocation of such funds shall be determined by [FIRST PARTY NAME] in its sole discretion pursuant to this Section 8.01 and that [FIRST PARTY NAME] shall not be required to account for same to the Licensee.


The Licensee is further required to conduct local market advertising (subject to compliance with 

provisions and procedures set out in (b) below) and to expend thereon (subject to (ii) and (iii) below), in addition to the advertising contribution referred to in Section 8.01, such funds as the Licensee may reasonably determine, but not less than [PERCENTAGE %] percent of Gross Sales during each [NUMBER] week consecutive accounting period. The Licensee shall provide [FIRST PARTY NAME] with evidence of any expenditure under this Clause 8. 2 (a)(i) within [NUMBER] days of making such expenditure. The Licensee shall further include evidence of all expenditures for local market advertising when submitting its financial statements for each fiscal year as required by Section 6.2.

In the event that regional co-operative advertising has been initiated by [FIRST PARTY NAME] with respect to any [SPECIFY] operation or operations either prior to or subsequent to execution of this Agreement, [FIRST PARTY NAME] may require that all or a portion of the [PERCENTAGE %] percent of Gross Sales referred to in Clause 8.02 (a)(i) above be contributed by the Licensee towards the cost of such co-operative advertising.

In the event that [FIRST PARTY NAME] should initiate or sponsor special promotions then, in addition to the contribution referred to in Section 8.1 and either in addition to or in lieu of the expenditure referred to in Clause 8.02 (a)(i) above, [FIRST PARTY NAME] may encourage the Licensee to participate therein and to contribute up to [PERCENTAGE %] percent of Gross Sales for such special promotions which would be considered by [FIRST PARTY NAME] as local market advertising for purposes of this Section 8.2.

The Licensee covenants and agrees to participate in all promotions initiated by [FIRST PARTY NAME], whether national, regional or local, which [FIRST PARTY NAME] designates as applying to the [SPECIFY] operation.

[FIRST PARTY NAME] wishes to encourage active participation by the Licensee in the community in which the [SPECIFY] operation is situated and [FIRST PARTY NAME] is supportive of all efforts by the Licensee to conduct local market advertising promotions for the [SPECIFY] operation, provided that the Licensee complies with the approval procedures set forth in this paragraph 8.2(c).

The Licensee acknowledges and agrees that prior to conducting any local market advertising or promotions pursuant to this Section, it shall obtain the prior approval of [FIRST PARTY NAME] to all aspects of the advertising or promotion in question, including, without limitation:

the nature of the advertising or promotion;

the choice of materials;

selection of media;

timing of the advertising or promotion;

amount of proposed expenditure; and

such other matters as [FIRST PARTY NAME] may determine in its discretion.



The Licensee agrees that it will submit all of the aforesaid details to [FIRST PARTY NAME] not less than [NUMBER] business days prior to the date of commencement of the proposed advertising or promotion. The Licensee further agrees that it will not proceed with any promotional activity in the event that [FIRST PARTY NAME] shall not grant its approval thereto.

The Licensee shall erect, install and replace such signage, including the fascia sign and/or the pylon sign, menu sign, and other signs initially installed at the [SPECIFY] operation, or any other signage advertising the [SPECIFY] operation, as [FIRST PARTY NAME] may direct from time to time, provided that such signage shall be permitted by the governing authorities and provided further that the Licensee shall not be required to replace any such signs more often than once every [NUMBER] years. The Licensee shall also install such pictures, photographs, transparencies and pricing inserts in the frames of the signs located within the [SPECIFY] operation and such point of sale materials as [FIRST PARTY NAME] may direct from time to time. Any further advertising materials, posters or wall coverings in or about the [SPECIFY] operation shall not be displayed, erected or installed without the prior written approval of [FIRST PARTY NAME] which may be arbitrarily withheld. All signs and advertising material in, on or about the [SPECIFY] operation shall be erected, installed, maintained in good condition, repaired, updated and replaced at the sole expense of the Licensee.

Should the Licensee fail to comply with the foregoing provisions, [FIRST PARTY NAME] shall have the right to erect, install and replace any of such signage as it sees fit, the cost thereof to be borne by the Licensee and the Licensee shall forthwith on demand reimburse [FIRST PARTY NAME] for any expenses it should incur in connection therewith.


RELATIONSHIP OF THE PARTIES

Nothing contained herein shall be deemed or construed by the parties hereto, nor by any third party, as creating the relationship of principal and agent or of partnership or of joint venture between the parties hereto, it being understood and agreed that neither the method of computation of the license fee, royalty payments nor any other provision contained herein, nor any acts of the parties shall be deemed to create any relationship between the parties other than the relationship of licensor/parties intended or created.

Nothing herein contained shall in any way be construed as constituting the Licensee or any of the Licensees employees, agents or representatives as an employee, agent or representative, partner or subsidiary of [FIRST PARTY NAME].

The Licensee shall hold himself out to the public to be an independent contractor operating the [SPECIFY] operation pursuant to a license from [FIRST PARTY NAME].

[FIRST PARTY NAME] shall not, by virtue of any advice which it may provide, assume responsibility or liability to the Licensee, or any third parties, nor be taken to have agreed to lend money or guarantee the obligations of the Licensee in any way, and makes no representations, warranties or guarantees in respect thereof, expressed or implied, nor as to the potential volume, profits or success of the [SPECIFY] operation.

It is agreed that under no circumstances shall [FIRST PARTY NAME] be liable for any act, omission, contract, debt, or any other obligation of, or claims or judgment against the Licensee. The Licensee hereby covenants and agrees to indemnify and hold [FIRST PARTY NAME] and its officers, directors and controlling persons harmless against any and all such claims (arising through no negligence of [FIRST PARTY NAME], directly or indirectly from, as a result of, or in connection with the Licensees operation of the [SPECIFY] operation, and any claims resulting from the breach by the Licensee of any of its duties, obligations, covenants, representations, or warranties under this Agreement, and as well the costs, including solicitors fees, of defending against any of such claims, other than any such arising from the use by the Licensee of the trade marks and trade names hereunder.

The Licensee agrees that save as herein specifically set forth the license (franchise) herein granted is non-exclusive and that [FIRST PARTY NAME] has and retains the right:

To grant additional licenses (franchises) to use its trademarks, trade names and other confidential information and material in addition to those licenses (franchises) granted to existing licensees (franchisees);

To develop and establish outside the Trading Area other franchise systems for the same or similar products or services utilizing the same or similar trade marks, trade names which include the word [SPECIFY] and to grant licenses (franchises) thereto without providing the Licensee any right therein;

To develop and establish within and outside the Trading Area other franchise systems for the same or similar products or services under any proprietary marks not now or hereafter designated in writing as part of the system licensed (franchised) by this Agreement, and to grant licenses (franchises) thereto without providing the Licensee any right therein;

To conduct its business either as presently carried on or as it may hereafter be carried on, save as restricted by this Agreement.


RESTRICTIVE COVENANTS

The Licensee and the Guarantor shall not, during the currency of this Agreement, perform any other profession, trade or calling for compensation of any type, nor engage in any other business activity, directly or indirectly, unless prior approval thereto is obtained in writing from [FIRST PARTY NAME].

The Licensee and/or the Guarantor shall notify [FIRST PARTY NAME] of his desire to participate or engage in any other profession, trade, calling or business activity, directly or indirectly, at least [NUMBER] days before such activity is to commence and such participation shall be subject to the approval of [FIRST PARTY NAME] which approval may be unreasonably withheld.

Should the Licensee and/or the Guarantor obtain the consent of [FIRST PARTY NAME] to perform any other specified profession, trade or calling for compensation of any type during the currency of this Agreement as contemplated by the provisions of Section 10.1 or Section 10.2 hereof, it is understood and agreed that such consent shall be subject to the following conditions:

that the Licensee shall be required to employ a manager (or managers) who has(have) taken the [SPECIFY] training course and successfully completed the same and continuously measures up to the required standards of operation;

that should any manager not comply with the foregoing requirements the Licensee shall at [FIRST PARTY NAME]s request discharge him from employment within [NUMBER] days after receipt of a written demand from [FIRST PARTY NAME] to do so. In this regard, the Licensee shall advise the manager of the required standards of operation and advise him that failure to comply therewith shall be considered by the Licensee as constituting just cause for his dismissal. The manager shall signify in writing by letter addressed to [FIRST PARTY NAME] and the Licensee that the provisions of this paragraph have been read by him and explained to him by the Licensee and that he acknowledges and agrees to the same;

that in the event of (b) above, the Licensee will forthwith employ another manager who does comply.

Neither the Licensee nor the Guarantor shall in any capacity whatsoever, directly or indirectly, either individually or in partnership or in conjunction with any person or persons, firm, association, syndicate, company or corporation, as principal, agent, shareholder, employee or in any other manner whatsoever carry on or be engaged in or concerned with or advise, lend money to, guarantee the debts of or obligations of, or permit his or its name or any part thereof to be used:

Within [NUMBER] kilometers of the [SPECIFY] operation, or any [SPECIFY] operation in operation or under construction at the Commencement Date of this Agreement; or,

Within [NUMBER] kilometers of any [SPECIFY] operation opened during the initial term and any renewal term, if any, of this Agreement;

in a business which is the same or substantially similar to the business of a typical [SPECIFY] operation, during the currency of this Agreement and for a period of [NUMBER] year after its expiration or termination, for any reason whatsoever, unless prior approval of [FIRST PARTY NAME] is obtained in writing.

10.5  Each of the Licensee and the Guarantor covenants that during the term of this Agreement, except as otherwise approved in writing by [FIRST PARTY NAME], the Licensee and/or the Guarantor shall not, either directly or indirectly, for himself, or through, on behalf of, or in conjunction with any person, corporation or other entity divert or attempt to divert any business of, or any customer of, the [SPECIFY] operation to any competitor, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to [FIRST PARTY NAME]s business (which includes, without limitation, the goodwill associated with [FIRST PARTY NAME]s trade marks and trade names) or to the same or similar businesses licensed to others by [FIRST PARTY NAME].

10.6  Each of the Licensee and the Guarantor covenants and agrees that he shall not at any time during the term of this Agreement and for a period of [NUMBER] years thereafter communicate or divulge to anyone or use for the benefit of any other person, any information or knowledge concerning the method and nature of [FIRST PARTY NAME]s operation or policy, or the methods of manufacturing, preparation, promotion, sale or distribution in a [SPECIFY] operation, or used for or employed by [FIRST PARTY NAME] in and about its business and which may be communicated to the Licensee or the Guarantor or of which the Licensee may be apprised by virtue of his operation under the terms of this Agreement, nor will the Licensee or the Guarantor do any acts prejudicial or injurious to the goodwill of [FIRST PARTY NAME].

NON-ASSIGNMENT

This Agreement or any interest therein, shall not be assigned, transferred, conveyed, pledged, hypothecated, mortgaged, encumbered or otherwise disposed of, either directly or indirectly by the Licensee to any other person or firm or corporation except with the written consent of [FIRST PARTY NAME] which consent may not be arbitrarily withheld, nor shall any transfer or assignment resulting from any act of the Licensee or by operation of [YOUR COUNTRY LAW], be of any force or effect except with the written consent of [FIRST PARTY NAME].

Unless otherwise provided in the written consent of [FIRST PARTY NAME] thereto, no transfer or assignment by the Licensee shall in any way release the Licensee from its obligations to pay all amounts from time to time becoming due to [FIRST PARTY NAME] under this Agreement or from the observance and performance of all of the terms, covenants, conditions, and agreements contained in this Agreement on the part of the Licensee to be observed and performed, and, notwithstanding any such transfer or assignment, the Licensee shall remain jointly and severally liable with any transferee or assignee for the due and faithful performance of all such terms, covenants, conditions and agreements.

In the event that the Licensee is desirous of selling, assigning, transferring or conveying all of his right, title and interest in this Agreement and shall have requested the written approval of [FIRST PARTY NAME] thereto, the Licensee understands and agrees that if [FIRST PARTY NAME] does grant its consent thereto it shall be on condition:

Any other amounts owing to [FIRST PARTY NAME] by the Licensee shall be paid in full;

The purchaser shall covenant directly with [FIRST PARTY NAME] to be personally liable for all terms and provisions of this Agreement. In the event that the purchaser is a corporation, the shareholder or shareholders who either individually or collectively hold more than [PERCENTAGE %] percent interest in all voting shares and securities, however accomplished, shall execute personal guarantees in favor of [FIRST PARTY NAME] to be jointly and severally liable for the payment of all sums due to [FIRST PARTY NAME] hereunder and the due performance of each and every covenant and agreement of the Licensee as contained herein to the same extent as if he or they had been personally named as the Licensee herein;

The costs, expenses and disbursements reasonably incurred by [FIRST PARTY NAME] in connection therewith shall be paid by either the Licensee or the purchaser;

The proposed assignee meets the then current criteria of [FIRST PARTY NAME] applicable to prospective licensees/franchisees including but without limiting the foregoing in any way whatsoever, the financial capacity to complete the proposed transfer or assignment and meet all of the obligations of the assignee thereunder and hereunder. Such criteria shall be as established by [FIRST PARTY NAME] in its absolute discretion from time to time but shall be consistently applied;

That the proposed assignee submits an application to [FIRST PARTY NAME] on its then current form for new licensees and provides such further information and material as [FIRST PARTY NAME] may reasonably require;

That [FIRST PARTY NAME] is provided with a copy of the agreement of purchase and sale between the Licensee and the proposed assignee and all documents referred to therein as relied upon by the parties. If any financial statements are included, [FIRST PARTY NAME] shall be entitled but not obligated to question any figures relating to matters in respect of which the Licensee is required to report to [FIRST PARTY NAME] under this Agreement;

If [FIRST PARTY NAME] approves such assignment, it shall be on the express condition that the assignee is represented by independent legal counsel who presents an opinion to [FIRST PARTY NAME] that the assignee has not relied on any representation or warranty or opinion, of [FIRST PARTY NAME], or anyone from whom [FIRST PARTY NAME] may in [YOUR COUNTRY LAW] be responsible, and that the assignee and any guarantor(s) has/have voluntarily accepted the provisions of this Agreement;

That if [FIRST PARTY NAME] consents to such assignment it shall not be bound to recognize or comply with any provisions of any financing or other arrangements as between the Licensee and any assignee;

Subsequent to the closing of the agreement of purchase and sale between the Licensee and the assignee, [FIRST PARTY NAME] shall be provided with a copy of the documents of transfer and any purchase money financing;

[FIRST PARTY NAME] may require the assignee to refurbish, remodel or redecorate the [SPECIFY] operation as set out in paragraph 4.4(j), notwithstanding the fact that it has not required compliance therewith by the Licensee;

Such further and other matters as determined by [FIRST PARTY NAME] in its discretion.

For all purposes hereof, the term Licensee shall extend and apply to any person, corporation, partnership or other entity to which the interest, rights and obligations of the party of the Second Part herein may have been assigned or further assigned pursuant to the provisions hereof.


SALE OR TRANSFER OF SHARES OF LICENSEE

If the Licensee is at any time a corporation, and shares with voting rights of the Licensee, or of a corporation affiliated or associated with the Licensee, are transferred by sale, assignment, bequest, inheritance, operation of law or otherwise, or are issued or cancelled, or if the Licensee is amalgamated with any other corporation, and the effect or result of any one or more of the foregoing is a change in the effective voting or other control of the Licensee, or if any other events occur or proceedings or actions are taken, which result in a change in the effective voting or other control of the Licensee, such change in control shall be deemed to be an assignment of this Agreement to which Section 11.1 applies and [FIRST PARTY NAME] may terminate this Agreement as provided in Section 13.4.

If the Licensee is at any time a partnership (which term includes a limited partnership), and interests with voting rights in the partnership, or shares of a partner which is a corporation or shares of a corporation affiliated or associated with such a corporate partner, are transferred by sale, assignment, bequest, inheritance, operation of [YOUR COUNTRY LAW] or otherwise, or interests in the partnership are issued or surrendered or cancelled, and the effect or result of any one or more of the foregoing is a change in the effective voting or other control of the Licensee, or if any other events occur or proceedings or actions are taken which result in a change in the effective voting or other control of the Licensee, such change in control shall be deemed to be an assignment of this Agreement to which Section 11.1 applies and [FIRST PARTY NAME] may terminate this Agreement as provided in Section 13.4.

The Licensee shall, upon the request of [FIRST PARTY NAME] make available to [FIRST PARTY NAME] for inspection, or copying, or both, all corporate or partnership books and records of the Licensee, which alone or with other data, show whether [FIRST PARTY NAME] has acquired the right to terminate this Agreement under Section 12.1 or Section 12.2 hereof.  If the Licensee or any shareholder or partner of the Licensee, upon the request of [FIRST PARTY NAME], fails or refuses to furnish any such data to [FIRST PARTY NAME], or to have such data verified by a certificate of the said shareholder, or partner, or some other person having knowledge thereof, then, at the option of [FIRST PARTY NAME], this Agreement may be terminated by it on [NUMBER] days notice to the Licensee.

The Licensee and Guarantor further covenant to produce to [FIRST PARTY NAME], for its prior written approval (which approval may be unreasonably withheld) any document intended to be issued by or used by the Licensee for purposes of raising or attracting funds for the Licensee, whether by way of share issuance or issuance of new partnership interests (or the transfer of existing shares or partnership interests) and whether such document be in the form of a prospectus, offering memorandum or circular, or any other form of document, and the Licensee and Guarantor shall not issue such document, nor take any steps to raise such additional funds, until such time as [FIRST PARTY NAME]s prior written approval has been obtained. It is understood and agreed that the provisions of this paragraph shall apply whether or not the effect of such financing is to change the effective voting or other control of the Licensee.


DEFAULT - FORFEITURE AND TERMINATION

In the event that the Licensee fails within [NUMBER] days after receipt of written notice from [FIRST PARTY NAME] requiring the Licensee to make payment, to pay the invoices and any other costs, charges or expenses relating to the operation of the [SPECIFY] operation including but without limiting the generality of the foregoing, realty and business taxes, insurance, unemployment insurance and Workers Compensation levies, [FIRST PARTY NAME] may pay the same for and on behalf of the Licensee and all such charges, costs and expenses incurred by or paid by [FIRST PARTY NAME] in such manner shall be recoverable from the Licensee and shall be added to the monies otherwise payable to [FIRST PARTY NAME] hereunder.

Unless otherwise specifically stated herein, the Licensee agrees to pay interest on any late payment at an annual rate of [PERCENTAGE %] percent computed on a daily basis on any sums due and owing to [FIRST PARTY NAME] in excess of [NUMBER] days past due until paid by the Licensee to [FIRST PARTY NAME], with like powers of forfeiture and termination as herein set out. In the event of a default or a breach of this Agreement, the Licensee shall pay [FIRST PARTY NAME] all expenses, charges or costs incurred by [FIRST PARTY NAME] in connection therewith including its solicitors fees on a solicitor to own client basis.

The Licensee shall permit [FIRST PARTY NAME] and its agents, with due notice, to enter upon the [SPECIFY] operation without liability for trespass or other tort, for the purpose of ascertaining whether or not the provisions of this Agreement have been and are being complied with. If an inspection reveals that there is/are any breach (es) of this Agreement, the Licensee shall remedy such breach(es) according to written notice from [FIRST PARTY NAME]. If the Licensee should fail to remedy any such breach(es) [FIRST PARTY NAME] at its option may enter the [SPECIFY] operation and itself remove, replace, repair and/or remodel any items which do not conform with [FIRST PARTY NAME]s then current standards and specifications, and make such other modifications or alterations as may be necessary to achieve such conformity, and to bill the Licensee for all costs and expenses reasonably incurred in doing so. [FIRST PARTY NAME] may exercise the rights set forth in this Section only if such non-conformity is in breach of the provisions of this Agreement. In the exercise of its rights under this Section [FIRST PARTY NAME] agrees that it shall act reasonably and the Licensee agrees that it shall co-operate in every respect.

Upon the occurrence of any of the following events of default, this Agreement may be terminated immediately, at the option of [FIRST PARTY NAME], without notice, and [FIRST PARTY NAME] shall be released from all obligations hereunder, namely:

If the Licensee shall sell, transfer, assign, pledge, encumber, mortgage or otherwise deal with any right, title or interest in this Agreement in contravention of the provisions set forth in Articles [NUMBER] and [NUMBER] of this Agreement;

If an order shall be made or an effective resolution passed for the winding-up of the Licensee other than for the purpose of a bona fide re-organization;

(c)  If this Agreement or any of the goods and chattels of the Licensee be at any time seized or taken in execution or in attachment by any creditor of the Licensee, or if the Licensee makes an assignment for the benefit of creditors, or if a petition is filed under the Bankruptcy [ACT/LAW/RULE] of [COUNTYR] against the Licensee, (which is not immediately bona fide contested by the Licensee), or any authorized assignment is made or a receiver appointed under the Bankruptcy [ACT/LAW/RULE] of [COUNTRY] or any other act or pursuant to any agreement, (which is not immediately bona fide contested by the Licensee) or if a proposal is made by the Licensee to its creditors under the Bankruptcy [ACT/LAW/RULE] of [COUNTRY], or if the Licensee commits any act of bankruptcy, or if the Licensee takes the benefit of any [ACT/LAW/RULE] now or hereafter in force for bankrupt or insolvent debtors;

If the Licensee, if a corporation, passes any corporate proceedings to enable it to take proceedings for its dissolution or liquidation or amalgamation other than for the purpose of a bona fide re-organization and in such event the approved shareholders retain control;

If the Licensee, if an individual, should die, or become legally incapacitated which will continue for a period of [NUMBER] months or longer; provided that the legal representatives shall have a period of [NUMBER] months from the date of death or legal incapacity within which to submit an application for consent to assignment to a third party which consent [COMPANY NAME] shall not unreasonably withhold. The provisions in this paragraph shall also apply in the event of the death or legal incapacity of a person holding [PERCENTAGE %] percent or more of the shares or other securities with voting rights in the Licensee if the Licensee is a corporation or partnership;

If the management and control of the [SPECIFY] operation should be transferred to a person or persons other than the Licensee, if an individual, or if the Licensee is a corporation, to other than the person or persons managing and controlling the [SPECIFY] operation at the date of execution of this Agreement.

If, without [FIRST PARTY NAME]s consent, the Licensee ceases to do business at the [SPECIFY] operation for more than [NUMBER] consecutive days or for more than [NUMBER] days or part thereof in any [NUMBER] consecutive day period (except for breakdowns of equipment, or for repairs, renovations or redecoration), or fails to remedy any default within the time limited under any lease or sublease for the [SPECIFY] operation which could lead to its termination, or otherwise forfeits the right to do or transact business in the jurisdiction where the [SPECIFY] operation is located, this Agreement may be terminated at the option of [FIRST PARTY NAME], on [NUMBER] days written notice thereafter, and [FIRST PARTY NAME] shall be released from all obligations hereunder. 

However, if the Licensee fails to do business or loses possession of the [SPECIFY] operation as a result of a situation of force majeure then this Agreement shall not be terminated for that reason if within the [NUMBER] days after the occurrence, the Licensee applies for approval to relocate for the remainder of the term hereof to other premises within the Trading Area, or to rebuild the [SPECIFY] operation, (which approval shall not be unreasonably withheld), but failing all of which this Agreement may be terminated at the option of [FIRST PARTY NAME], on [NUMBER] days written notice thereafter, and [FIRST PARTY NAME] shall be released from all obligations hereunder as aforesaid. In the event that the Licensee elects to rebuild the [SPECIFY] operation, construction thereof must be completed and the [SPECIFY] operation opened for business within [NUMBER] days from the date of occurrence of the event of force majeure, failing which this Agreement may be terminated by [FIRST PARTY NAME] at any time after the expiry of the said [NUMBER] day period and [FIRST PARTY NAME] shall be released from all obligations hereunder.

For the purposes of this Agreement force majeure shall mean any events such as strikes, labor troubles, inability to procure materials or services, power failure, restrictive governmental [YOUR COUNTRY LAW] or regulations, riots, insurrection, sabotage, rebellion, war, acts of God, accident, fire or other casualty, expropriation or the exercise of eminent domain, or any other event or matter of a similar nature beyond the reasonable control of the Licensee, causing a bona fide delay or hindrance in the performance or discharge of an obligation of the Licensee, but excluding events brought about by the financial failure of the Licensee. Force majeure shall not include the situation where any head lease respecting the lands and premises on which the [SPECIFY] operation is located has expired or been terminated by reason of affluxion of time or otherwise.


Except as otherwise expressly provided in this Agreement, in the event the Licensee and/or the Guarantor shall fail to fully and faithfully perform any and all of the terms, conditions and covenants herein contained by the Licensee and/or the Guarantor to be performed, [FIRST PARTY NAME] shall give the Licensee and/or the Guarantor, as the case may be, written notice stating the nature and character of such default, and giving the Licensee and/or the Guarantor, as the case may be, [NUMBER] days from the date of the said written notice to cure such default. If the said default is not cured within the said period of [NUMBER] days [FIRST PARTY NAME] may terminate this Agreement by giving to the Licensee and the Guarantor written notice of such termination. 

The term default shall mean the failure of the Licensee (and/or the Guarantor) to perform any of the Licensees and/or the Guarantors obligations under or established by this Agreement, or failure by the Licensee (and/or the Guarantor) to pay as and when due any sums required to be paid by the Licensee for any equipment, personal property, products, merchandise, food or beverages used or sold in the operation of the [SPECIFY] operation or payable to [FIRST PARTY NAME] hereunder. Provided that notwithstanding any other term or provision of this Agreement, the Licensee shall not be in default or be deemed to be in default with respect to its failure to discharge or perform any obligation on its part to be discharged or performed including the breach or alleged breach of any statute, ordinance, [YOUR COUNTRY LAW], rule, regulation, order or requirement, if it is bona fide contesting the validity of any such statute, ordinance, [YOUR COUNTRY LAW], rule regulation, order or requirement and such contestation does not prejudice adversely the operation of the [SPECIFY] operation. 

Wherever in this Agreement there is a specific period prescribed for the curing of any default and the time period prescribed is insufficient to cure such default, then the period of time within which the Licensee and/or the Guarantor may cure such default shall be extended to such longer period of time as reasonably necessary, provided always that the Licensee and/or the Guarantor has commenced to cure within the notice period and proceeds diligently to cure any such breach or default.

At any time during the term of this License Agreement (including any extension or continuation thereof) [FIRST PARTY NAME] at its sole option and in its sole and unfettered discretion may terminate this License Agreement if the Licensee deliberately and persistently fails to comply with the terms and provisions of this Agreement or deliberately and persistently engages in a course of action in the operation of the [SPECIFY] operation which damages or could damage the business being conducted therein and/or reflect adversely on the goodwill of [FIRST PARTY NAME] connected with the operation of [SPECIFY] OPERATIONS. This option may be exercised even if any prior default(s) have been cured by the Licensee. This option may be exercised only after the Licensee has been given written notice by [FIRST PARTY NAME] that it intends to exercise the same on the occurrence of the next default of a similar or dissimilar nature.

If any Notice of Default is given pursuant to this License Agreement the contents of such Notice of Default and the nature and character of the default therein complained of shall for all intents and purposes be considered to be accurate and complete if given by [FIRST PARTY NAME] consistent with the terms and intent of this License Agreement, but always provided such default actually occurred. In the event of any plea to the contrary by the Licensee in any suit or proceeding this Section may be pleaded as an estoppel against the Licensee.

On the termination of this Agreement:

All rights and privileges granted to the Licensee shall immediately cease and determine;

The Licensee shall immediately cease to operate the operation as a [SPECIFY] operation and, shall not thereafter, directly or indirectly, represent to the public that the operation is a licensed [SPECIFY] operation, or hold itself out as a present or former licensee of [FIRST PARTY NAME];

The Licensee shall not thereafter in any way whatsoever directly or indirectly use any of the products, supplies, plans, specifications, materials, layouts, trade marks, trade names, accounting procedures, or methods of operation, signs, advertising materials, or other materials or things associated with [FIRST PARTY NAME] or a [SPECIFY] operation that were granted to the Licensee or made available to the Licensee by [FIRST PARTY NAME] under this Agreement;

The Licensee shall at its expense make such modifications and alterations, interior and exterior of the [SPECIFY] operation, including removal of all signs and advertising material as necessary to protect the [FIRST PARTY NAME] trade names, trade marks, distinctive building design, layout and related matters as [FIRST PARTY NAME] may reasonably require such that any business to be carried on thereafter does not appear to be a [SPECIFY] operation. Should the Licensee fail to comply with the foregoing requirements, [FIRST PARTY NAME] may enter on the [SPECIFY] operation, and in so doing shall not be guilty of trespass, and itself make or do such of the foregoing not attended to within [NUMBER] days of termination of this Agreement and shall be entitled to recovery of its costs and expenses of so doing from the Licensee forthwith on demand;

The Licensee shall promptly pay all sums owing to [FIRST PARTY NAME]. In the event of termination for any default of the Licensee and provided that such default arose as a result of conditions over which the Licensee had control, such sums shall include all damages, costs and expenses, including reasonable solicitors fees, on a solicitor and own client basis incurred by [FIRST PARTY NAME] as a result of the default, which obligation shall give rise to and remain, until paid in full, a lien in favor of [FIRST PARTY NAME] against any and all of the inventory, supplies, personal property, machinery, fixtures and equipment owned by the Licensee and on the [SPECIFY] operation at the time of default;

The Licensee shall pay to [FIRST PARTY NAME] all damages, costs and expenses, including reasonable solicitors fees, on a solicitor and own client basis, incurred by [FIRST PARTY NAME] subsequent to the termination or expiration of the Agreement in successfully obtaining injunctive or other relief for the enforcement of any continuing restrictive provisions of this Agreement, including collection actions;

The Licensee shall immediately turn over to [FIRST PARTY NAME] all manuals, records, files, instructions, correspondence, and any and all other materials, relating to the operation of the [SPECIFY] operation in the Licensees possession or control, and all copies thereof (all of which are acknowledged to be [FIRST PARTY NAME]s property), and shall retain no copy or record of any of the foregoing, excepting only the Licensees copy of this Agreement and of any correspondence between the parties, and any other documents which the Licensee reasonably needs for compliance with any provision of [YOUR COUNTRY LAW];

[FIRST PARTY NAME] shall have the right (but not the obligation) to be exercised by notice of intent to do so within [NUMBER] days after termination or expiration, to purchase any and/or all advertising material, inventory, and any and all menus or other items bearing [FIRST PARTY NAME]s trade marks or trade names, at the cost price thereof or the fair market value thereof whichever is less. [FIRST PARTY NAME] shall also have the right (but not the obligation) to purchase any pylon or fascia signs required to be removed from the [SPECIFY] operation pursuant to paragraph 13.10(d) at the straight line depreciated cost price thereof or the fair market value thereof whichever is less. 

If the parties cannot agree on fair market value within a reasonable time, the matter shall be determined by arbitration in accordance with commercial arbitration legislation or, failing applicable legislation, commercial arbitration practice in the Province in which the [SPECIFY] operation is located. If [FIRST PARTY NAME] elects to exercise any option to purchase herein provided, it shall have the right to set off all amounts due from the Licensee under this Agreement against any payment therefore;

The Licensee and the Guarantor shall comply with the covenants contained in Sections 10.4 and 10.6 and all other covenants of this Agreement expressed to continue to apply after termination.

In the event that this Agreement is terminated and not extended or replaced by a further License Agreement respecting the [SPECIFY] operation, the Licensee hereby grants to [FIRST PARTY NAME] the right and option to acquire from the Licensee the [SPECIFY] operation, and all right, title and interest of the Licensee therein or in any way associated therewith. If [FIRST PARTY NAME] wishes to exercise the option herein granted it shall within [NUMBER] days of termination of this Agreement serve the Licensee with a Notice of Exercise of Option to Purchase. The purchase price shall be the fair market value of the Licensees entire interest in the [SPECIFY] operation and the lands, (or the Lease, as applicable) buildings, chattels, furniture, fixtures and equipment and other tangible assets therein or used in conjunction therewith. 

The purchase and sale contemplated and effected by the Notice of Exercise of Option to Purchase shall be completed in accordance with the terms and conditions set forth in Schedule D hereto annexed, wherein [FIRST PARTY NAME] is designated Purchaser and the Licensee is designated Vendor. The transaction shall close [NUMBER] days after the purchase price has been agreed to by the parties or finally determined by arbitration. In the event of a dispute as to the fair market value (the purchase price) or as to the interpretation and application of this paragraph the dispute shall be submitted to arbitration in accordance with commercial arbitration legislation or, 

Failing applicable legislation, commercial arbitration practice in the Province in which the [SPECIFY] operation is located; provided however that in view of the terms of this Agreement and the ownership by [FIRST PARTY NAME] of its trade marks and trade names and the goodwill associated therewith no value shall be ascribed to any goodwill or other intangible assets of the [SPECIFY] operation business formerly carried on by the Licensee in the [SPECIFY] operation. Should [FIRST PARTY NAME] exercise the option herein granted it shall be entitled to immediately enter on and take possession of the [SPECIFY] operation and on its own account operate the [SPECIFY] operation business therein without interference from the Licensee. If [FIRST PARTY NAME] should enter on and take possession of the [SPECIFY] operation as aforesaid it shall indemnify and save the Licensee harmless from all losses, costs, damages and expenses resultant there from arising from and after the date on which it enters on and takes possession and all appropriate and necessary adjustments shall be made.

It is acknowledged that [FIRST PARTY NAME] has an interest in establishing as many [SPECIFY] operations as possible in order to increase public awareness and acceptance generally of [SPECIFY] operations and the products sold therein. [FIRST PARTY NAME] also has an interest in preserving the operation of each [SPECIFY] operation once opened such that the public does not perceive rightly or wrongly that a particular operation has not been successful and further so as to retain its reputation and goodwill associated with such operation. Recognizing the foregoing, [FIRST PARTY NAME] has insisted on the provisions contained in Section 3.5 and in Section 13.11.

[FIRST PARTY NAME] agrees that in the enforcement of its rights under this Agreement it will act in a manner consistent with its standards in effect from time to time generally and consistently applied to other licensees of [SPECIFY] operation subject to the provisions of the applicable license agreements.


WAIVER-CUMULATIVE RIGHTS

The failure of [FIRST PARTY NAME] to insist upon a strict performance of any of the agreements, terms, covenants and conditions hereof shall not be deemed a waiver of any rights or remedies that [FIRST PARTY NAME] may have and shall not be deemed a consent, acquiescence or waiver of any subsequent breach or default in respect of any such agreement, terms, covenants and conditions whether of the same or a different character.

No right or remedy conferred upon or reserved to [FIRST PARTY NAME] by this Agreement or the Lease, if any, is intended to be, nor shall be deemed, exclusive of any other right or remedy herein or by [YOUR COUNTRY LAW] or equity provided or permitted, but each shall be cumulative of every other right or remedy. Nothing herein shall bar [FIRST PARTY NAME]s right to obtain injunctive relief against threatened conduct that may cause it loss or damage, under the usual equity rules, including the applicable rules for obtaining restraining orders and preliminary injunctions.

[FIRST PARTY NAME]s consent to a transfer or assignment of this License shall not constitute a waiver of any claims it may have against the transferor Licensee, nor shall it be deemed a waiver of [FIRST PARTY NAME]s right to demand exact compliance with any of the terms of this License by the transferee licensee.


RIGHT OF FIRST REFUSAL TO PURCHASE

It is agreed that if at any time or times during the currency of this Agreement, the Licensee shall receive a bona fide offer to purchase the [SPECIFY] operation, and/or the business conducted therein, which he intends to accept, the Licensee shall first serve [FIRST PARTY NAME] with a copy thereof, and if [FIRST PARTY NAME] within [NUMBER] days of receipt of such copy submits an identical offer to purchase, or an offer of equivalent cash value in the event the original offer to purchase is not entirely composed of cash, the offer submitted by [FIRST PARTY NAME] shall be accepted and a binding Agreement of Purchase and Sale shall be entered into. It is specifically understood and agreed that if [FIRST PARTY NAME] should not submit such an offer the provisions of Article [NUMBER] and Article [NUMBER] continue to apply.


OTHER AGREEMENTS

This License Agreement contains the only agreement between the parties relating to the [SPECIFY] operation and no prior warranties or representations collateral or otherwise, prior stipulations, agreement or understanding, verbal or otherwise, shall be valid or enforceable unless embodied in this License and the same may be modified only in writing executed by the parties hereto.

Should the Licensee, or any associated, affiliated, subsidiary, controlling or controlled company, or its or their controlling shareholder(s) (as hereinafter defined), if the Licensee is a company, or any partnership or joint venture in which the Licensee has a controlling equity interest, be a Licensee pursuant to another License Agreement with [FIRST PARTY NAME] as Licensor respecting a further [SPECIFY] operation, a default under this License Agreement shall constitute a default under such other License Agreement and vice versa, with like remedies available to [FIRST PARTY NAME], and should such other License Agreement cease to be valid, binding and in full force and effect for any reason this License Agreement shall be forthwith surrendered by the Licensee and terminated, and likewise should this License Agreement cease to be valid, binding and in full force and effect for any reason, the other License Agreement shall be forthwith surrendered by the Licensee and terminated.

For the purposes of this Agreement, a corporation shall be deemed to be a subsidiary of another corporation if, (a) it is controlled by (i) that other; or (ii) that other and one or more corporations each of which is controlled by that other, or (iii) two or more corporations each of which is controlled by that other; or (b) it is a subsidiary of a corporation that is that others subsidiary.

For the purposes of this Agreement, a corporation shall be deemed to be anothers holding corporation if that other is its subsidiary.

For the purposes of this Agreement, one corporation shall be deemed to be affiliated with another corporation if one of them is the subsidiary of the other or both are subsidiaries of the same corporation or each of them is controlled by the same person.

For the purposes of this Agreement, a corporation shall be deemed to be controlled by another person or by [NUMBER] or more corporations if, (a) shares of the first-mentioned corporation carrying more than [PERCENTAGE %] of the votes for the election of directors are held, other than by way of security only, by or for the benefit of such other person or by or for the benefit of such other corporation; and (b) the votes carried by such shares are sufficient, if exercised, to elect a majority of the board of directors of the first-mentioned corporation.


NOTICE

Any notice, request or demand herein provided for or given hereunder if given to the Licensee and/or the Guarantor shall be sufficiently given if mailed by prepaid registered mail addressed as follows:

To the Licensee: [COMPANY NAME] .c/o [COMPANY NAME] Operation [FULL ADDRESS], [STATE/PROVINCE] 

To the Guarantor: [NAME] and [NAME]c/o [COMPANY NAME] Operation [FULL ADDRESS], [STATE/PROVINCE]






Any notice herein provided for or given hereunder if given to [FIRST PARTY NAME] shall be sufficiently given if mailed by prepaid registered mail addressed as follows:

[FIRST PARTY NAME] Operations Limited 
[FULL ADDRESS]
[STATE/PROVINCE]
Attention: [DEPARTMENT NAME] 

Any notice shall be conclusively deemed to have been given on the third business day after it was mailed as aforesaid; or in the event of personal service on the date such notice is delivered. Any of [FIRST PARTY NAME], the Licensee or the Guarantor may at any time give notice in writing to the other or others of any change in address of the party giving such notice and from and after the giving of such notice the address therein specified shall be deemed to be the address of such party for the giving of such notices thereafter.


INTERPRETATION AND GENERAL

This Agreement shall be interpreted and construed in accordance with and shall be governed by the [YOUR COUNTRY LAW] of the Province of [STATE/PROVINCE]. All questions of policy, including, but not limited to promotion, advertising, distribution, use, merchandising and sale of the products, not specifically covered by this Agreement or about which there may be difference of opinion or disagreement between the parties shall be resolved and determined by [FIRST PARTY NAME]. This principle is to be recognized in the construction and interpretation of this Agreement and in resolving questions respecting the various matters mentioned in this Section.

If any covenant or other provision of this Agreement is invalid, illegal or incapable of being enforced by reason of any rule of [YOUR COUNTRY LAW] or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect, and no covenant or provision shall be deemed dependent upon any other covenant or provision unless so expressed herein.

Words importing the singular member only shall include the plural and vice versa, and words importing the masculine gender shall include the feminine gender and words importing persons shall include firms and corporations and vice versa, and the provisions hereof shall be read with all grammatical changes thereby rendered necessary and all covenants shall be deemed to be jointly and severally undertaken by all signatories on behalf of the Licensee hereto.

Headings, paragraph and article numbers and marginal notes herein are inserted only for the purpose of convenience and are in no way to be construed as part of this License or as limiting the scope of the Section to which they refer.

Whenever in this Agreement there is a cross reference to a paragraph or a section the cross reference shall be to the paragraph or section (and for such purposes the words paragraph and section shall be synonymous) bearing the number specified.


Time is of the essence of this License Agreement.

It is agreed by and between the parties that this License shall not be recorded by the Licensee and registration of the License by the Licensee shall constitute a default hereunder.

Unless otherwise specified herein, whenever the approval of [FIRST PARTY NAME] is required or wherever the discretion of [FIRST PARTY NAME] may be exercised, such approval or discretion may not be withheld or exercised arbitrarily.

Any obligation or covenant of the Guarantor hereunder shall be deemed to be a joint and several obligation or covenant of all of the persons comprising the Guarantor.


GUARANTEE

The Guarantor, in consideration of the granting of the rights and privileges herein contained to the Licensee, and the execution of this License Agreement by [FIRST PARTY NAME], hereby unconditionally and irrevocably guarantees jointly and severally the payment of all sums due to [FIRST PARTY NAME] hereunder and the due performance of each and every covenant and agreement of the Licensee as contained herein, to the same extent as if he were personally named as Licensee herein. 

The Guarantor agrees that he may be sued directly hereunder and waives any rights he may have to require [FIRST PARTY NAME] to proceed against the Licensee or to exhaust any remedy whatsoever which may be available to [FIRST PARTY NAME] before requiring payment from, or proceeding against, the Guarantor, and further that [FIRST PARTY NAME] may allow the Licensee to be in default hereunder, may extend the time for payment, or for correcting of any default, or otherwise deal with the Licensee in such a manner as [FIRST PARTY NAME] shall see fit without the Guarantor being released from his covenants hereunder and without notice to him. The Guarantor covenants and agrees that his obligations set out in this Section shall not be impaired, restricted, released, waived, eliminated, terminated or modified in any respect so as to be unenforceable by reason of the Licensees bankruptcy, insolvency, reorganization or any other legal proceedings by or against the Licensee, or for any other reason whatsoever.


SUCCESSION

This Agreement and everything herein contained shall, subject to the terms of this Agreement, extend to and bind and enure to the benefit of the respective heirs, executors, administrators, successors and assigns (as the case may be) of each and every one of the parties hereto.


IN WITNESS WHEREOF, each party to this agreement has caused it to be executed at [PLACE OF EXECUTION] on the date indicated above.


LICENSOR            LICENSEE

                          
Authorized Signature          Authorized Signature


                          
Print Name and Title          Print Name and Title


GUARANTOR             

              
Authorized Signature  
        
              
Print Name and Title          
CERTIFICATE AS TO OFFICERS, DIRECTORS AND SHAREHOLDERS

The Licensee hereby certifies to COMPANY NAME that the following are the Officers, Directors and Shareholders:

1.  OFFICERS:

President  -  [NAME]
Vice President  -  [NAME]
Secretary  -  [NAME]

2.  DIRECTORS:

[NAME]
[NAME]


3.  SHAREHOLDERS:              Percentage of
Issued Shares:

[NAME]      [PERCENTAGE %]
[NAME]      [PERCENTAGE %]


SCHEDULE A  -  LEGAL DESCRIPTION

SCHEDULE A-1-  TRADEMARK REGISTRATIONS

SCHEDULE B  -  STANDARD COMPANY NAME EQUIPMENT PACKAGE

SCHEDULE C  -  STANDARD COMPANY NAME SMALLWARES PACKAGE

SCHEDULE D  -  TERMS OF PURCHASE OPTION ON TERMINATION

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