HomeMy WebLinkAbout95-01227
2, Defendant Chestnut Enterprises, Inc. is a Pennsylvania corporation wilh
places of business as above set forth, The individual defendants W, John Chestnut, John
Douglas Chestnut and Shirley M. Chestnut are adull individuals mainlaining places of business
as above, All defendants are sometimes referred to hereinafter collectively as "Franchisee" or
"Franchisees, "
3, Dunkin' is engaged in the business of, and has acquired valuable
experience and skill in, developing and operating national franchises involving the production,
merchandising and sale of doughnuts and other related products through the use of specially
designed buildings, equipment, accessories, identification schemes, products, management
programs, standards, specifications and proprietary marks, all known as "The Dunkin' Donuts
System, "
4, Dunkin' owns the mark and related logo "Dunkin' Donuts", which is
registered with the United States Patent and Trademark Office, Dunkin' Donuts and its
franchisees have continuously used and advertised Dunkin' Donuts' trademarks throughout the
United Slates, Dunkin' Donuts' trademarks distinguish its franchises from similar businesses
and are widely known and recognized by customers,
5, On or about August 25, 1992 and April 16, 1993, Dunkin' and
Defendants/Franchisees entered into two (2) Franchise Agreements, by the terms of which
Franchisees were licensed to operate a Dunkin' Donuts Shop at each of the following locations:
1186 Harrisburg Pike, Carlisle, Pennsylvania 17103 and at 930 Walnut Bottom Road, Carlisle,
Pennsylvania 17103, A true and correct copy of said Franr.hise Agreements are attached hereto
and marked collectively as Exhibits" A," The dates and signatories of each of said Franchise
Agreements are as follows:
DUNKIN\CNESTNUT\PLEADING\COHPLAINT
800-2684, 3695
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Location
I!llk
Franchisees
Harrisburg Pike
August 25, 1992
Chestnut Enterprises, Inc"
W, John Chestnut, John Douglas
Chestnut and Shirley M, Chestnut
Walnut Bottom Road
April 16, 1993
Chestnut Enterprises, Inc"
W. John Chestnut and
Shirley M, Chestnut
6, Pursuant to Paragraph 4(E) of each Franchise Agreement, Franchisees
agreed to pay to Dunkin' a sum equal to 4,9% of gross sales at each Dunkin' Donuts Shop as
a license fee,
7, Pursuant to Paragraph 4(F) of each Franchise Agreement, Franchisees
agreed to pay to Dunkin' a sum equal to 5,0% of gross sales at each Dunkin' Donuts Shop as
a contribution to the Dunkin' Donuts Franchise Owners Advertising and Sales Promotion Fund
for the time period that the Franchise Agreement was in effect, plus such additional payments
as a majority of other Dunkin' Donuts Shops in Franchisees' local market support.
8. Pursuant to Paragraphs 5(H)(1) and 9(F)(1) of each Franchise Agreement,
Franchisees were to submit to Dunkin', on each Thursday, a statement of gross sales for the
preceding calendar week at the close of business on the last Saturday and to remit to Dunkin'
all monies due and owing to Dunkin' pursuant to Paragraphs 4(E) and 4(F) of the Franchise
Agreement,
9, Pursuant to Paragraph 9(C)(1) of each Franchise Agreement, Franchisees
agreed that if they failed to remit monies due Dunkin' pursuant to the aforesaid Paragraphs 4(E)
and 4(F) and, if Dunkin' thereafter placed the unpaid amounts in the hands of an attorney for
collection, then Franchisees would pay, in addition to all monies due Dunkin' pursuant to the
provisions of the aforesaid Paragraphs 4(E) and 4(F), all damages, costs and expenses, including
DUNKIN\CHESINUI\PLEADING\COMPLAINI
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collection costs, reasonable auorney's fees, and interest on the unpaid amounts at the 18% per
annum or highest permissible rate, incurred by reason of Franchisees' default,
10, Each Franchise Agreement provides that Franchisees are in default when
the Franchisees:
(a) Fail, refuse or neglect to pay when due to Dunkin' any monies
owing to Dunkin' or to the Dunkin' Donuts Franchise Owners Advertising and Sales Promotion
Fund, Paragmph 9(A)(3); and/or
(b) Fail to comply with any of their obligations under the Franchise
Agreement, or fail to carry out in all respects their obligations under any lease for the Dunkin'
Donuts Shop or under any mortgage, equipment agreement, promissory note, conditional sales
contract materially affecting the Dunkin' Donuts Shop to which the Fmnchisees are a party or
by which the Franchisees are bound whether or not Dunkin' is a party thereto, Pamgraph
9(A)(4),
11. Fmnchisees have sold products from their Dunkin' Donuts Shops but have
not paid to Dunkin' franchise and advertising fees based on gross sales for the weeks ending
from August 4, 1994 through and including February 25, 1995 as set forth on the Dunkin'
Donuts Accounts Receivable Status Reports compiled as of February 23, 1995, attached and
marked collectively as Exhibits "B",
12. Based upon Fmnchisees' actual reported sales and, 10 the extent
Fmnchisees have failed to report sales, based upon historical sales data, as of February 23,
1995, Fmnchisees owe the following sums for franchise fees pursuant to Pamgraph 4(E) of each
Fmnchise Agreement and advertising fees pursuant to Paragraph 4 (F) of each Fmnchise
Agreement:
OUNKIN\CNESTNUT\PlEAOING\COHPlAINT
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as of February 23, 1995, all due as of February 23, 1995, plus such additional amounts as may
be due under the Franchise Agreement dated August 25, 1992, including reasonable attorney's
fees, collection costs and interest, and damages for wrongful use of the Dunkin' Donuts System,
including its trademarks and proprietary marks from termination until de-identification of the
Dunkin' Donuts Shop at 1186 Harrisburg Pike, Carlisle, Pennsylvania, and until enforcement
of the post-termination covenant against competition contained in the said Franchise Agreement,
COUNT III. DECLARATION OF RIGHTS
Dunkin' VS, W, John Chestnut and Shirley M. Chestnut
(Harrisburg Pike Dunkin' Donuts Shop)
24, The allegations contained in preceding paragraphs are incorporated herein
by reference as though set forth fully herein,
25, W, John Chestnut and Shirley M, Chestnut are the owners of the premises
located at 1186 Harrisburg Pike, Carlisle, Pennsylvania and continue in possession of said
premises.
26. As an essential condition of Dunkin' granting its approval of the
development of said premises as a Dunkin' Donuts Shop, defendants W, John Chestnut and
Shirley M, Chestnut and Dunkin' entered into a certain lease option agreement on or about
August 25, 1992 (the "Lease Option Agreement") for the premises as above, A true and correct
copy of said Lease Option Agreement is attached hereto, made a part hereof and marked Exhibit
"EIt.
27, The Lease Option Agreement was given by defendants W, John Chestnut
and Shirley M, Chestnut to Dunkin' as collateral security for the performance and payment of
OUNKIN\CHESTNUT\PLEADING\COMPLAINT
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all obligations set forth in the Lease and in the Franchise Agreement and any of and
indebtedness of Franchisee to Dunkin'.
28, Pursuant to the tenns of the Lease Option Agreement, defendants W, John
Chestnut and Shirley M, Chestnut agreed thai, if the Franchise Agreement was tenninated for
any reason, then Dunkin' would have an option to elect 10 enter into a lease with defendants W,
John Chestnut and Shirley M, Chestnut for said premises in a fonn attached to the Lease Option
Agreement and within five days of written notice of Dunkin's election to enter into the lease,
defendants W. John Chestnut and Shirley M. Cheslnut agreed to execute, acknowledge and
deliver the lease to Dunkin' and, upon it acceptance by Dunkin', deliver possession of the
premises to Dunkin' .
WHEREFORE, Dunkin' Donuts Incorporated demands judgment against all
defendants, declaring the Lease Option Agreement valid and enforceable, declaring that Dunkin'
Donuts Incorporated has the option to elect to enter into a lease with defendants W. John
Chestnut and Shirley M, Chestnut for said premises in the fonn attached to the Lease Option
Agreement and directing defendants W, John Chestnut and Shirley M, Chestnut, within five days
of written notice of Dunkin's election to enter into the lease, to execute, acknowledge and
deliver the lease to Dunkin' and, upon it acceptance by Dunkin', deliver possession of the
premises to Dunkin' and granting Dunkin' damages for wrongful use of the premises after
Dunkin's election until defendants W, John Chestnut and Shirley M, Chestnut deliver the
premises,
COUNT IV - DECLARATION OF RIGHTS AND INJUNCTIVE RELIEF
Dunkin' vs. Defendants Chestnut Enterprises, Inc.,
W. John Chestnut and Shirley M, Chestnut
(Walnut Bottom Road Dunkin' Donuts Shoo)
OUNKIN\CHESTNUT\PLEADING\COMPLAINT
800,2684, 3695
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29, The allegations contained in preceding paragraphs are incorporated herein
by reference as though set forth fully herein.
WHEREFORE, Dunkin' Donuts Incorporated demands judgment against defendants
Chestnut Enterprises, Inc" W, John Chestnut and Shirley M, Chestnut declaring that the
Franchise Agreement dated April 16, 1993 for the Dunkin' Donuts Shop at 930 Walnut Bottom
Road, Carlisle, Pennsylvania is tenninated as of the date of Franchisees' receipt of Notice of
Tennination; a preliminary and pennanent injunction pursuant to 15 U.S,C, ~1116 prohibiting
defendants' continuing wrongful use of the Dunkin' Donuts System, including its trademarks and
proprietary marks, and prohibiting defendants' violation of the post-tennination covenant against
competition contained in their Franchise Agreement; treble damages pursuant to 15 U,S,C
~1l17; attorneys' fees, costs of this action; and such further relief as the Court shall order,
COUNT V - MONEY DUE
Dunkin' vs. Defendants Chestnut Enterprises, Inc.,
W. John Chestnut and Shirley M, Chestnut
(Walnut Bottom Road Dunkin' Donuts Shop)
30, The allegations contained in preceding paragraphs are incorporated herein
by reference as though set forth fully herein,
WHEREFORE, Dunkin' Donuts Incorporated demands judgment against
defendants Chestnut Enterprises, Inc" W. John Chestnut and Shirley M, Chestnut for
$10,736,35 for unpaid franchise and advertising fees, and $300,00 for collection fees billed as
of February 23, 1995, all due as of February 23, 1995, plus such additional amounts as may be
due under the Franchise Agreement dated April 16, 1993, including reasonable attorney's fees,
collection costs and interest, and damages for wrongful use of the Dunkin' Donuts System,
OUNKIN\CHESTNUT\PlEA01NG\COHPlAINT
800,2684, 3695
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including its trademarks and proprietary marks from telmination until de-identification of the
Dunkin' Donuts Shop at 930 Walnut Bollom Road, Carlisle, Pennsylvania and enforcement of
the post-tennination covenant against competition contained in the said Franchise Agreement,
COUNT VI. DECLARATION OF RIGHTS
Dunkin' vs, Defendants Chestnut Enterprises, Ine"
W. John Chestnut and Shirley M, Chestnut
(Walnut Bottom Road Dunkin' Donuts Shop)
31, The allegations contained in preceding paragraphs are incorporated herein
by reference as though set forth fully herein.
32, Defendant Chestnut Enterprises, Inc, took possession of the premises at
930 Walnut Bottom Road, Carlisle, Pennsylvania under a lease dated May 11, 1993 (the
"Lease") with defendants W, John Chestnut and Shirley M, Chestnut and continues in possession
of said premises,
33. As an inducement to and in consideration of Dunkin' granting a franchise
to defendants Chestnut Enterprises, Inc" W, John Chestnut and Shirley M, Chestnut for said
premises, the referenced defendants and Dunkin' entered into a certain lease option agreement
on or about May II, 1993, (the "Lease Option Agreement"), with defendants W. John Chestnut
and Shirley M, Chestnut as grantor and Dunkin' as grantee of an option to lease, for the
premises as above. A true and correct copy of said Lease Option Agreement and Lease are
attached hereto, made a part hereof and marked Exhibit "F".
34. The Lease Option Agreement was given by Franchisee to Dunkin' as
collateral security for the perfonnance and payment of all obligations set forth in the Lease and
in the Franchise Agreement and any of and indebtedness of Franchisee to Dunkin'.
DUNKIN\CHESTNUT\PLEADING\COMPLAINT
800'2684, 3695
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35, Pursuant to the terms of the Lease Option Agreement, defendants W. John
Chestnut and Shirley M, Chestnut agreed that, if the Franchise Agreement for the Dunkin'
Donuts Shop at the premises was terminated for any reason, then Dunkin' would have an option
to elect to enter into a lease with defendants W. John Chestnut and Shirley M. Chestnut for said
premises and after written notice of Dunkin's election 10 enter into the lease, defendants W, John
Chestnut and Shirley M, Chestnut agreed to execute, acknowledge and deliver the lease to
Dunkin' and, upon it acceptance by Dunkin', deliver possession of the premises to Dunkin',
WHEREFORE, Dunkin' Donuts Incorporated demands judgment against all
defendants, declaring the Lease Option Agreement valid and enforceable, declaring that Dunkin'
Donuts Incorporated has the option to elect to enter into a lease with defendants W. John
Chestnut and Shirley M. Chestnut for said premises and directing defendants W, John Chestnut
and Shirley M. Chestnut, after written notice of Dunkin's election to enter into the lease, to
execute, acknowledge and deliver the lease to Dunkin' and, upon it acceptance by Dunkin',
deliver possession of the premises to Dunkin' and granting Dunkin' damages for wrongful use
of the premises after Dunkin's election until defendants W, John Chestnut and Shirley M,
Chestnut deliver the premises,
\ f".. ~ \J.,~ I~r
Arthur L, Pressman
Constantine T. Fournaris
ABRAHAM PRESSMAN & BAUER P.C.
1818 Market Street, 35th Floor
Philadelphia, PA 19103
(215) 569-9798
Attorneys for Plaintiff
Dated:
March 3, 1995
DUNKIN\CHESTNUT\PLEADING\COHPLAINT
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VERIFICATION
I, Carol Bowman, being duly sworn according to law, depose and say that she is
Collections Coordinator for Dunkin' Donuts Incorporated and Third Dunkin' Donuts Realty,
Inc., that she is authorized to take this verification on their behalf, and that all the statements
contained in the foregoing Civil Action Complaint are true and correct to the best of her
knowledge, information and belief, and that this verification is made subject to the penalties of
18 Pa. C,S. ~4904 related to unsworn falsification to authorities.
l~
CAROL BOWMAN
DATED: March 3
.1995
.
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)0
UNITED STATES COURT OF APPEALS
FOR THE Tl11KD CmCUlT ~l I~ _~) _~ n WI.~ r:)
NO.: ~ 5 '. Ii C) 3 5 ~l_ "
, r-E'P, 2 ': I'..... "
u 'v ;:r'j.J
-'
U.S.C.A. 3rd. CIR,
. ......
v..
Rental tlan~ement Inc.
D%SCLOSURB OY CORPORATE APY%LX~TXONS
urn FXNlUfcr~~ XN'rEREBT
punuant to Jrd Cu. LAR 26.1, Rental tlan.:1=ement Inc.
following diaoloaure, (Kam~ of Party)
makee tbe
1.
Is said party a subsidiary or affilia~.l '.r
,ublicly ownsd corporation?
(Check One)
I Yea
{Xl N...
If the anawer ia YES, Uat below the l.denti ':" of t 1.' "arent cortloratlon
or afflUate and the relatlonahip between it' .....~ ; ',.. r...med partYI
2. Ia there a publlcly owned corporatlon, not a party to the appeal. that
haa a f1nanclal intereat in the outcome?
(Check One)
1 Yea
{~ No
If the anewer ia YES, liet below the identlty of such corporatlon and
the nature of the financl.al intereet.
3. If th1e ie a bankruptcy appeal, 3rd cir. LAR, r.quire. that the following
information muat alao be provided I
If the debtor or the bankruptcy eatate is a party to ~he appeal, counael
for the debtor or the truatea of the bankruptcy eatate ehall eubmlt a
liat providlng tha following informatlon,
a. The name of the debtor, if thia informatlon l.s not already provldad
in the caption.
b. The membere of the creditora' cotmltteea or the top 20 uneecu~
credltora.
c. Any entlty not nlllll8d in the caption whlch l.s an actlve partlclpant
in the proceedlnqa.
II' THII: DEBTOR OR TRUSTEE or TIlE BM1tJ\UPTCY ESTATE IS NOT A PPTY, TD
APPELLANT S PROVIDE TII! ABOVE INfORMATION TO THE CLElUt.
CClllnaell
F~lw-t'A", ~ 1. 1995
,J......)
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DUNKIN' DONUTS INCORPORATED
FRANCHISE AGREEMENT
DDFA,,/90
CONVERSION
This Agreement. dated AJ.Go~r ~.r" . 191L- is made by IInd between DUNKIN' OONUTS
INCORPORATED, a aelaware corporation having Its principal place of business In Randolph. Mall.chulln,
(her'lna"" r,fen,,, to as "DUNKIN' DONUTS"), and the fOlIQwing indIviduals Of entity (hereinaher referred to
coIle<:tiYlty .."FRANCHISEE"): CHESTNUT ENTERPRISES. INC.. a Pennsylvania CorDoration;
and II. JOHN CHESTNUT, JOHN DOUGLAS CIIESTNUT, and SIIIRLEY 1\, CHESTNUT
DUNKIN' DONUTS. as the result 01 the Illpendllur. 01 lime. urton and monty, has acquired Ixperience and
IkiU In the development. opening and operating 01 shops and distrIbution D~lets i"YOMno the production,
merChandising and I8le of donuts and other related prOducts utilizing a speCially dlligned building or faQhty with
sptdally developed equipment, eqUIpment layouts, Inlenor and uterior accellorill,ldenllflcatlon Ichemes, products,
management programs, llandardl, dlslribution and delivery melhodl, Ipeclficatlons and praprlelary marks and
Information, all of ,,-hlch are releNed to In thll Agreement al the "CUNKlN' DONUTS SYSTEM,.
DUNKIN' DONUTS has developed and used and continues to use and controt the usage or, In connlCtlon
With Its businesl and the buslnell of III DUNKIN' DONUTS franchls"s, certain proprietary Inler.sll, trademarka,
lllVicl marks and trade names, includIng "DUNKIN' DONUTS", which IS reglllered alII trademark on the Principal
Regilter 01 the United Statel Patent OffiCe (the "PROPRIETARY MARKS.), to Identify lor the publiC the source of goods
and ,ervlctl markeled thereunder and to represent to the publiC high and uniform standards of quality, cleanllneu,
appearance and selVice,
FRANCHISEE, being cognizant 01 the dislLnc1lve and valuable significance to the publiC of all of the foregoing,
desires to make use 01 the tradltmark "DUNKIN' DONUTS., and to enloy the benellts of that mark. the other
PROPRIETARY MARKS and tho DUNKJN' DONUTS SYSTEM,
FRANCHISEE understands the Importance of DUNKIN' DONUTS' high and uniform standards of quality,
cleanlin.... appearance and service to the value of the DUNKIN' DONUTS SYSTEM and the neceSSity 01 openmg and
operallng FRANCHISEE's DUNKIN' DONUTS SHOP In conlormlty WIth the DUNKIN' DONUTS SYSTEM and In
accordance with DUNKIN' DONUTS' standards and specificatlons,
In recognition 01 all the above, the parties agree as follows:
" A. OUNKIN' DONUTS hereby grants to FRANCHISEE during the term hereof and FRANCHISEE aa:epts a
franchise 10 operate a donut shop utlliZlOg the CUNKlN' DONUTS SYSTEM in accordance Wtth the lerms, covenants
and conditions of this Agreement. at one location only, situaled at
1186 HarrlsburR Pike, Carlisle, Pennsv1vania 17013
tHol I~ 1C<fy or l_1 1&\11I.. lloC-.
(the -DUNKIN' DONUTS SHOp. or the .SHOP"I. The lerm of this Agreement shall extend I tRI, tas) ,llrl trim tlllt
d~l. It ! CIISI' a... .~ {~" n, \I . _we al!. ! 81 tI a~ll!I, I 1) alt, IIIl'Flailla nr al~1 Bar a Ill' ~ ," ar until
AURUAt 17. 2012. ,J::l'a~a ,. -a lIia-n, This franchise includes the nght to use, In connection
therewith and at the agreed locatIon. the trademark "DUNKIN' DONUTS., along with other PROPRIETARY MARKS
owned and utilized by DUNKIN' DONUTS in connection with other DUNKIN' DONUTS shOps, and the right to us. the
DUNKIN' DONUTS SYSTEM including confidenlial and valuable information which now exists or may be acquired
hereafter and set forth In DUNKIN' CONUTS' operating manuals or otherwise disclosed to DUNKIN' DONUTS
franchisees,
1. B, For a new DUNKIN' DONUTS SHOP where the location Is to be developed by FRANCHISEE, this lranchlll
is granted to FRANCHISEE subject to (and shall become effective only upon compliance WIth) the terms, covenants,
and conditlons of the DUNKIN' DONUTS FRANCHISE OWNER DEVELOPMENT AGREEMENT ell.eculed concurrently
herewith by DUNKJN' DONUTS and FRANCHISEE.
1. C, This Agreement shall automatically expir. upon the earlier expiration 01 any lease relating to the
FRANCHISEE'. ocC\lpancy 0' tho DUNKIN' DONUTS SHOP.
1. 0, FRANCHISEE and an partners and shareholders of FRANCHISEE represent and warrant to DUNKIN'
DONUTS that each individual Is a United Stales citizen or a lawful resident alien of the United State., that each
corporation ts and shall remaIn duly organiZed and in gOOd standing dunng the term 01 this Agreement, and that all
flnanclat and olher information which FRANCHISEE has prOVlded to DUNKIN' DONUTS in connection with
FRANCHISEE', application lor this DUNKIN' DONUTS franchise is lrue and accurate,
2, DUNKJN' DONUTS ogr...:
reuo s (i) to acquire control 01 the reat estate for the term 01 this Agreement, and (Ii) to ca KIN'
DONUTS SHOP the conslructed, subject to the regulatIons of all governmental Dving JurisdiCtion,
and 10 thereupon lease the D 'NUTS SHOP either dlfectty or thro S1dlary to FRANCHISEE, In the
event DUNKIN' DONUTS is unable to lease KIN' DONU 0 FRANCHISEE, FRANCHISEE shall have
Ih, option 10 terminate this Agreement and obtBln a r INITIAL FRANCHISE FEE paId to DUNKIN' DONUTS
or to accept IIlubstltule location shaul proposed to F ~ DUNKIN' DONUTS;
2, B, For a new ONUTS SHOP where the locatIon IS to be dovelop CHI SEE, to approve
the Iocaf ",ts the standards employed by DUNKIN' DONUTS in selecting other locations e: and to
". '
2. C, To make avaIlable the speclflCBtlons and/or requiremenlS for the equlpmenllo be utilized in the DUNKIN'
DONUTS SHOP:
2, D. To make aV81lable to FRANCHISEE and FRANCHISEE's des1qnated representative. pnor to the opening 01
the DUNKIN' DONUTS SHOP, a training program at Ihe DUNKIN' CONUTS UnIVerslly Corporale Training Center (oDU)
wilh respect to the operation 01 the DUNKIN' DONUTS SYSTEM,
Thll PC~
Related PC'.:
PROD.
SAT.__
EDA
OTHER_
CARLISLE. PA
Partl..
Introduction
Grant o' the
Franchi..
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Inlllll Slrvlc..
Furnlahld by
DUNKIN'
ODNUTS
jJ
2, E. To prOVIde operlllng procedure. 10 IlIl.t FRANCHISEE in comptYlOg wl1h DUNKJN' DONUTS' standard
method. 01 record keeping. contrOl., Illtrlng and !raining requlremenl.., and productlOf1 methOd., and In devetDPInQ
apptOYed IOUrc.. 01 IUPply;
2. F. To ma6le aV&llable to FRANCHISEE alllltance, baled on Ihe e.penence and Judgment of DUNKJN'
DONUTS, in the preopening, opening and Indlal operation 01 the DUNKIN' DONUTS SHOP and In conforming to the
requlllmlntl 0' Ihe DUNKIN' DONUTS SYSTEM; and
2, Q, To prepare and coordlnalelhe Grand OpeOlng Promotional Advertlllng Program (01 such olher .dvertiling
program as DUNKIN' DONUTS may 'PlClly) lor the ,"111m opemng ollhe DUNKIN' DONUTS SHOP.
3. DUNKIN' DONUTS agree.:
3. A. To malnlaln a continuing advISOry relallonship With FRANCHISEE, including consultallon In Ihe ar... 01
markellng, merchandising and goneral businel' operallons;
3. B. To prOVIde operating manuall to FRANCHISEE, which contaln Ihe ltand8ld., lpectflC8tlon., procedur..
and techniques 01 the DUNKIN' DONUTS SYSTEM, and 10 r8Vt,e, from lime 10 time, the conlenl of th, manual. to
lncorporatl new development. regilding standard., speofltalion.. procedures and technique.,
3, C, To '.,)nlinuells etrorts to maintam high and uniform standa,ds of quality, C1eanline.., appearance and seNicI
aI aU DUNKIN' DONUTS ShoPI, thus protecting and enhanQng Ihl reputallon of DUNKJN' DONUTS and Ihe demand
for the productJ 01 the DUNKJN' DONUTS SYSTEM and, to Ihat end, to make reasonable enortl to dllllmlnale Itl
ltandards and IpecillC8tlons to potential supplier. 01 FRANCHISEE upon the wrlnen requ..t of FRANCHISEE:
3. D. To review for Ipproval all proposed advertiSing and promollDnal male nail relaling to FRANCHISEE'.
DUNKJN' DONUTS operations prepared by FRANCHISEE for use In locaJ advertising; and
3. E. To administer The DUNKIN' DONUTS Franchise Owners Advertising and Salll Promo!ion Fund (the-Fund-)
and 10 direct the developmenl of allldvertlslng and promollonal programs. One.lifth of FRANCHISEE's 5% Idvertiling
oonlnbUllon (1 % at Ihe GROSS SALES ollhe SHOP) Will be utilized, allhe discretion 01 DUNKJN' DONUTS, 10 prOVide
'Of Ih, admlnisl1alive e.penses 01 the Fund and ror programs deSigned to Inaease salll and enhancI and further
deviM)p the PUb'IC reputallon and Image of DUNKlN' DONUTS and Ihe DUNKJN' DONUTS SYSTEM. The balance.
Including .ny Intereale8lned by the Fund. 'Mil be used IDr advertising and relaled e.penses. Conlnbutions to Ihe Fund
in IxcelS at 5% 01 GROSS SALES shall be used in accordance With the programs 10 which they relale, The conlenl
01 aU advertising, as well as Ihe media in which the adve".sing IS to be placed and Ihe advertising .,ea, shall be.1 the
dilcrelion of DUNKIN' DONUTS. Upon requesl, DUNKIN' DONUTS will proVIde FRANCHISEE a statement of receipts
and dlsbullements ot the Fund, prepared by an independent certJlled pUbliC accountanl, 'or each fiscal year of the
Fund,
4. FRANCHISEE Igre..:
Continuing
S.rvk..
Fumlehed by
DUNKIN'
DONUTS
PAYMENTS:
InlUal Franchi..
FH
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Retund. I'j;
~:.,
refundabl.lner arend Opening
the OUNKJ' NUTS SHOP commencel operallon, fOf a Grand Opening Promotlonal AdvertiSing am (or such
other I sing program as DUNKJN' DONUTS may specify). Payment shall be made in full prtOf to an I by
F HISEE or FRANCHISEE's designalecl re~resenlallVe It the DUNKIN' DONUTS training course Of thirty ( ~
4. E. FRANCHISEE shall pay 10 DUNKIN' DONUTS al Posl OtllCe Box 294, RandOlph, Massachusens 02388 (01 Continuing
such Olher addrll18!l DUNKIN' DONUTS shatt from Ilmelo lime gIVe 10 FRANCHISEE In writlng), on or be'or. ThumSay Frenchl.. F...
01 tach week, a lum equal 10 lour and nln,lenth. percenl (4.9%) ollhe GROSS SALES ollhe DUNKIN' DONUTS SHOP
lew the seven m day period ending allhe dose 01 buainess on the precedIng Salurdav. Thelerm -OROSS SALES-
In UU. Agreement shall Include all sales made by FRANCHISEE pUlluanllo thll Agreemenl. but shall not Induds the
sals of dgarenes. sales lues or sinular taxes,
4. F. FRANCHISEe shall pay 10 Ihe Fund althe same time,laf Ihe same seven m day periOd. In the same mannlf Advertlllng
BI, and In addttlon la, the paymenls proyIdtd lor under Paragraph 4.E. ollhls Agreemenl, 5% of the GROSS SALES
ot tne DUNKIN' DONUTS SHOP (exCluding wholesafe U1etlo accounts approved in wntlng. in advance, by DUNKJN'
DONUTS) , In addrtion, FRANCHISEE shall particlpateln and make additional paymentllo the Fund with relped to
an actvertil!ng. marketing and Olher DUNKJN' DONUTS programs whiCh from lime 10 lIme are supported by I map;ty
01 produdllQ DUNKIN' DONUTS SHOPS In 'he ma'kelln wtllch 'he DUNKIN' DONUTS SHOP I. _'ed Wllh ,,,peel
10 IocaJ prooram., and in the Conlinenlal Uniled Stales, WIth respecllo nallonal programs. DUNKIN' DONUTS reNrve.
the right In It I sole and eblolule discrellon to deslg",le or Change the compoSition a' lhop. lnduded In the ball tot
purposelol delefmtntng an\8lOllty. FRANCHISEE shall have complete discrebon as lolhe pncll he charge. tor product
sold in Ihe DUNKIN' DONUTS SHOP. Nothing herein shall be conllrued to require FRANCHISEE to eatablish prices
In eccordance 'Mth program. suppor1td by the majonty 01 shOQI.
...
2
5, FRANCHISEE understands and ~JPowIe'ooelthat every detall of the DUNK!N' DO. SYSTEM i'important
to DUNKIN' DONUTS, 10 FRANCHISEE and to other DUNKIN' DONUTS Iranehlseelln order to develop and mAIntain
high ana uniform stand8ldlof quality, eleanlmess, appearance, teNlee, laellllles, products and lechniqueslo increase
thl demand lor DUNkiN' DONUTS prOduct. and to protect and ,nhance the reputatIon and Ooodwill 01 DUNKIN'
DONUTS. Accordmgly, FRANCHISEE Bo,eello: devote lull lime, energy Bnd enort to the managemanland operalion
01 Ihl DUNKIN' DONUTS SHOP; obtain Irom DUNKIN' DONUTS pilar wrtnen approval 01 all wholesale accountl; UI8
beat efforta 10 m8)llmizelalea 01 the DUNKIN' DONUTS SHOP; ensure accurate reporting of GROSS SALES 10 DUNKIN'
DONUTS; and implement all procedure. recommended by OUNKIN' DONUTS 10 minimize employee theft.
FRANCHISEE lurther agreea that employee theft shall not relieve FRANCHISEE of the obligatIon to make all payments
to DUNKIN' DONUTS based on OROSS SALES pUfluant to Paragraph... ollhl, Agreement and that accurate reportmg
of GROSS SALES Includes rmglng all sale.ln the cash regl.ter allhe lime the product Is delivered 10 the purchaler
includinO wlthOUllimilatlon rotlll, wholesale, bulk discount SalOl and lalel tor which payment may be delerred,
FRANCHISEE also agre8l:
5. A. To use all materials, ingredients, supplies, paper goodl, unllorms, lixture., furnishmgs. Slgnl, equipment,
methods of elttenor and intenor deSign and construction and methods 01 product preparallon and delivery prl1Cribed
by or which conform With DUNKIN' DONUTS' standards and specifications and to carry out the business covered by
Ihis Agreemenl in accordance With the operatIonal standards and specifications established by DUNKJN' DONUTS and
lit forth in DUNKIN' DONUTS' operating manuals and other document. as they presently eltlst or shallexial in the future
or u may be otherwlse disclosed to DUNKIN' DONUTS' Iranchl..es from time 10 time,
5, B, To refrain from using or selling any products, malerials, ingredients, supplies, paper goods, unifOlm..
ftxtuf8a, furnishings, signs, equlpmenl and methods 01 product preparatlon, merchandlsmg, and delivery which do not
meet DUNKIN' DONUTS' standards and SpeCifications.
5, C, To offer for sale only such products as shall be ellpressly apprOVed for sale al the DUNKIN DONUTS SHOP
In v.ntino In advance by DUNKIN' DONUTS and 10 oHer for sale all products that have been designated IS approved
by DUNKIN' DONUTS.
5, D, To mamtain at all limes a suffIcient supply of approved products.
5, E, To purchase alllOOd prOducts. supplies, equipmenl Bnd malerials required for the operation or the DUNKIN'
DONUTS SHOP from suppliers who demonstrale, 10 the reasonable sahslaction of DUNKIN' DONUTS, the ability to
mee. all of DI JNKlN' DONUTS' standards and speCifIcations lor such Ilems: who po.sess adequate capacity and
facilities to supply FRANCHISEE'S needs in the quanhties. at the times and With the reliability requlllte to an elfiCIenl
operation and who have been approved, in wrIting, bv DUNKIN' DONUTS. Prior to purChaSing any items from any
supplier not previous!y approved by DUNKIN' DONUTS, FRANCHISEE shall submit 10 DUNKIN' DONUTS a wnnen
reque.t tor approvat of the supplIer. DUNKIN' DONUTS may require thalsampres from the supplier be delivered 10
DUNKIN' DONUTS or to a deSignated Independenltesting laboratory for testing prior 10 apprOVal and UI8, A charge
not to eltceed the actual COli 01 the test shall be made by DUNKIN' DONUTS and shall be paid by FRANCHISEE;
prcMded, however, the cost of thelirst test requested by FRANCHISEE in any calendar year shall be borne by DUNKIN'
DONUTS.
5, F. To maintain. at FRANCHISEE's expense. at all times, the interior and eltterior 01 the DUNKIN' DONUTS SHOP
and all fbdures, fumishings,signs and equipment In Ihe highest degree of deanliness, orderliness, sanitation and repair,
u reasonably required by DUNKIN' DONUTS, and 10 make no material alteration, addition. replacement or
improvemenlln. or to, the inlenor or elttenor (induding the pBlking lot and landscaped areas) of the DUNKIN' DONUTS
SHOP wilhout the prior wrlnen consenl of DUNKIN' DONUTS.
5. G, To manage the DUNKIN' DONUTS SHOP at all times With at least two (2) individuals. one of whom must
be Ihe FRANCHISEE or partner or sharehOlder 01 FRANCHISEE. Both Individuals must have successfully completed
the DUNKIN' DONUTS training program at DDU. Both Individuals must have literacy and nuency In the English language
suffident. in the good 'lith opmion 01 DUNtoN' DONUTS, to satislactorily complete training at DDU and to communicate
with employees, cuslomers, and suppliers of DUNKIN' DONUTS. In the event FRANCHISEE applies for and recINes
approval to develop or purchase an addillonal DUNKIN' DONUTS Shop, DUNKIN' DONUTS requires thai the addiliOnal
Shop be managed by at leasl one DDU trained Individual approved by DUNKIN' DONUTS,
5. G,l. To enaure that all employees are trained in accordance With DUNKIN' DONUTS in.shop training
procedures. Also. FRANCHISEE shall ensure that the manager and all employees whose duties Include customer
service have sufficient fluency In the EngliSh language to adequately meetlhe public In the DUNKIN' DONUTS SHOP,
5. G,2, To anend and to require those employed in the DUNKIN' DONUTS SHOP to anend such funher Irainlng
as DUNKIN' DONUTS ahall from time to time reasonably require.
5. G.3. To pay the cost 01 training malenals. lalaries. accommOdations and travel eltpenses. if any, at FRAN.
CHISEE or any other lndrvidual employed in the DUNKIN' DONUTS SHOP. FRANCHISEE will also bear the cost 01 In.
shop training programs. The cost of presenting the OOU training program Will be borne by DUNKIN' DONUTS.
5, H, To keep lull. complele and accurate books and accounts in accordance with generally accepted accounting
principles and In the form and manner prescnbed below or as may be further prescribed by DUNKIN' DONUTS from
time to time,
5. H.1, To submit 10 DUNKIN' DONUTS. on or belore Thursday of lach week. on. an approved form, a signed
IlItement of GROSS SALES tor the seven (7) day period ending at the dose of business on the preceding Saturday
along With all monies required to be paid under Paragraphs 4.E, and ".F. ollhi. Agreement.
5. H.2, To submit to DUNKIN' DONUTS. on or before the twentieth (20th) day of each month, on an approved
fonn. a profit and loss statement of the DUNKIN' DONUTS SHOP for the preceding calendar 01 fiscal month prepared
In accordance With generally accepted accounllng principles.
5. H.3. To SUbmit to DUNKIN' DONUTS, Within thirty (JOI days alter the close 01 each six (6) month penod,
commendng With the opening of the DUNKIN' DONUTS SHOP, on an approved form, a profit and loss statemenl for
the silt (61 month penod and a balance sheet (Including a stalement of retained IBlning. or pannership account) as
of the end 01 the penOd, AnnuallinanOal stalements must b~ by an independent certified publiC accountanl
or such olher Independenl public accountant 8' may be acceptable 10 DUNKIN' DONUTS.
S. H.4. To subtnlt to DUNKIN' DONUTS such other periodic 'arms and reports as may be prescrIbed and al the
limit prescribed by DUNKIN' DONUTS.
COVENANTS
OF THE
FRANCHISEE:
Shop
Mllnt.nlnc.
Sllmng Ind
Training
Trllnlng
Co."
Book.. Rlcordl
Ind R.portl
*prepared
rtEJ
~
J t_
'\
5. H.!5. To plllervelor a period 01 nat lei' than three (3) yea,. dUllng the 181m or thl, Agreement and fo, not ,...
thin thr.. (3) yeB" following lhelerm ollhll Agreement, in the English lanQu8gl. aU accounting record. and supportinG
documents relaung 10 the FRANCHISEE', operallons under thIs Agreement. or any lea'8 With DUNKIN' DONUTS or
ill SUbSidiary, including but nollllT1lled to:
e. dally cash reports;
b. cash receipts journal and goneralledger;
c. cash dlSbutlemenlllournal and weekly payroll roglller:
d. monthly bank Italemants. and dally depOSit slip. and cancelod checks;
e. all tax leturns;
f. luppher'llOvOIces (paid and unpaldl:
g. dated cash loglller lapes (detailed and summary):
h. IIml.annua! balance sheots and monthl.., prollt and loss stalements;
l. dally produclion, throwaway and hnishmg records and weekly inventOlles;
I. rucordl of promotion and coupon ,edemptlons;
k, records ot all wholelale accounts (prior Wllnen approval 01 wholesale accounts by DUNKIN' DONUTS il
,equlred); and
I. such other records as OUNKlN' DONUTS may trom lime 10 lime requelt,
" I. FRANCHISEE IhaII record alllalel on a cash 'OQilte" the make, model and lenal number of which haS been
Indlvidualty approved In wntlng by DUNKIN' DONUTS; suchcaah regllter shaU contain a dBVlC8that Will reGQfd accumulated
aaIn and cannot b. lurned back Of feset. and a bock.up power Iystem tor memory ltorag. in tn. event at power Ion.
S. J, FRANCHISEE Ihall procure, beloh! the commencement of bUlln.ss. and mainlain in fulllorce and eftect
during the enllr.lerm 01 this Agreement. at FRANCHISEE's sole elpens.. an Insurance policy or poIiclel prOleding
the FRANCHISEE and DUNKIN' DONUTS, and thoir dlruclors and employeel. against any lOIS, liability or elp.nle
whatsoever from, Wlthoutlimltallon. lire, peraonallnlury,theft, death. property damage or OtherwIse, ansing or occur"no
upon or in connedlon With the DUNKIN' DONUTS SHOP or by realon 01 FRANCHISEE's operation or occupancy of
the DUNKIN' DONUTS SHOP. Such policy or policies shall include comprehenSIVe generalliabihty insurance, including
but nollimited to, prOduct, contractual. and owned and non.owned vehlclellabihty coverlges, With a lingl. limit alone
mIllion dollars 1$' ,000,0001 lor such hIgher IImll as DUNKIN' DONUTS, in Its lole and a.blolute discretIon, may from
time to lime require, and as may be reqUired under Ihe terms of any lease for :he DUNKIN' DONUTS SHOP) tor bOdily
injury and property damage combined, -All Rilk- property damage Insurance, ....;I_J II nil ~_tl , U _" II.\.!; 4""
_.l.,lt1~_al I .. 1\l8tl ,lor the lull replacemenl cost valulot the DUNKIN' DONUTS SHOP and the contents Ihereof,
plate glaSllnluranc. .."d b_l~ !_ a 1I,If applicable, and such ltalulory insurance as may be required in thellale
In which the DUNKIN' DONUTS SHOP Is located. All insurance afforded by the policies required under the terms ot
this Paragraph shall:
1. Be wrinen In the names 01 FRANCHISEE, DUNKIN' DONUTS, and any other parties as direded by DUNKiN'
DONUTS, as their respecll\le interest may appelr:
2, Be wonen by insurance companies acceptable to DUNKIN' DONUTS;
3, Contain prO\l1sions denying to the Insurer acquisition by subrOQation of righls ot recovery agamst any party
named;
4. Contain the provision that cancellation or aUerallon cannot be made without at least Ihirty (30) days INl'lnen
notice to any party named; and
5, Not he limited in any way by reason 01 any insurance whIch may be maintained by DUNKIN' DONUTS or
any pany named.
During the term of this Agreement, FRANCHISEE shall promptly (but In no eventlaler than len (10) days after any
luch policy becomes etfedive or such payment is duel furnilh DUNKIN' DONUTS 'WIth duplicate originals 01 all
Inluran<:e poIioes, Indudlng renewal and replacement polices, together wilh evidence that the premiums therefor hav.
bun paid. Uat any time FRANCHISEE falls to comply 'WIth the prCMslons at this Paragraph 5.J.. DUNKIN' DONUTS.
In addiUon to all other remedies available, shall have the option (but shall not be requlled) to obtam such insurance
with ,elpect to the DUNKIN' DONUTS SHOP. and keep the lame in effect. FRANCHISEE shall thereupon pay DUNKIN'
DONUTS when and al billed tor the costs at the premiums theretor, Maintenance of insurance and the performance
by FRANCHISEE at the obligations under this Paragraph shalt not relieve FRANCHISEE of Ilabihty under thelndomMlty
provisions Iflt forth In thiS Agreement.
5, K. If all condItions precedenl to tho openmg of tho DUNKIN' DONUTS SHOP hay. been satilfied, FRANCHISEE
shall promptly open the DUNKIN' DONUTS SHOP to the general publiC as soon as construction and equipping the
DUNKIN' DONUTS SHOP are substantially complete. FRANCHISEE Shall thereafter keep the DUNKIN' DONUTS SHOP
open and in normal operation 24 hours a day on all days elcept Christmal Bnd ThanksgIving unless prior wnnen
approval Is obtained tram DUNKIN' DONUTS or unless DUNKIN' DONUTS otherwise directl in wflling. FRANCHISEE
shall operate the DUNKIN' DONUTS SHOP so as to maximize GROSS SALES and mamtaln all standards at the DUNKIN'
DONUTS SYSTEM.
5. L FRANCHISEE shall submll 0.11 advertiSIng and promotional malerlals prepared for use in local areu 10
DUNKIN' DONUTS pnor 10 ule. In Ihe event wnnen dlsapptoval 01 the advertiSing and promotional malerial is nol
received by FRANCHISEE tram DUNKIN' DONUTS Within fllleen (15) days from the date duch material is received by
DUNKIN' DONUTS, said materials shall be deemed opproved unless and until sublequenlly dIsapproved.
5, M, tn the 8\lent DUNKIN' DONUTS develops a new ShOP and leases the DUNKIN' DONUTS SHOP to
FRANCHISEE. FRANCHISEE ag,... 10 .nl., Inlo. LEASE OF DUNKIN' DONUTS SHOP Wllh,.' DUNKIN' DONUTS'
optiOn. DUNKIN' DONUTS or its rentallubtiidiary. FRANCHISEE recognizes thai. in the event DUNKIN' DONUTS or
it. subsidiary leases the DUNKIN' DONUTS SHOP 10 FRANCHISEE, renl payable under the lease wllllndude additional
compensation 10 DUNKIN' DONUTS or its subsidiary tor the acquiSillon. by purchase or lease, or otherwise, of the
DUNKIN' DONUTS SHOP. In the evenl. during the term 01 this Agreemenl or any eltension thereof, FRANCHISEE
directty or Indirectly acquires ownership or control 01 the property, FRANCHISEE also agrees to granl to DUNKIN'
DONUTS, under its standard LEASE OPTION AGREEMENT. the option 10 acquire the locatIon in the event at detault
by FRANCHISEE under this Agreement or in the event of FRANCHISEE'S default under any lease or mortgage relating
10 the premISes,
.
RIglatar.
Inlurance
*new or used
uliJ
ConUnuoul
Oparltlon
Adv'r1lllng
Approval
Company.
Oaveloped
R..I Eltate
5. N. For a new DUNKIN' DONUTS SHOP where Ihe location Isto be developed by FfV..... ~HISEE, FRANCHISEE
8grell 10 develop the DUNKIN' DONUTS SHOP in accordance Wllh plan., specificatIons. documentation 8nd
procedlJre. approved In willing by DUNKIN' DONUTS; 10 purchase and In.t3111n the DUNKJN' DONUTS SHOP f1xturll.
~urnllhlOgs, equipment. ..gns and matenals from suppliers whIch have been approved by DUNKIN' DONUTS; 10 caUSI
the DUNKIN' DONUTS SHOP to open to the public within fifteen t IS) months Irom the dale 01 this Agreement, and 10
grant to DUNKIN' DONUTS Ihe oplion to aCQUIre the location In the event of default by FRANCHISEE under this
Agr..ment or in the event of FRANCHISEE'S delault under any lease or mortgag. relating to the premises.
FRANCHISEE also agrees to executo, concurrentty With Ihe execution 01 this Agreement, but b.lore permitting
construction 10 begin on the DUNKIN' DONUTS SHOP, DUNKIN' DONUTS' FRANCHISE OWNER DEVELOPMENT
AGREEMENT and OUNKIN' DONUTS' lEASE OPTION AGREEMENT (Wllh anachmenlS) duly executed In recordable
lorm by FRANCHISEE and Ihe landowner of the premises.
5. O. FRANCHISEE aareesto renovale and remodel the interior and exterior of the DUNKIN' DONUTS SHOP
(lnauding but nollimlted to 'Ixtures, furMlShlngs, signs and equlpmentl no late' than the tenth (IOthlannlversary oftha
. to the then currenl deSign for shops 01 comparable eoe and
condition. The nature and scope 01 ronova:lon and rem oling shall be as then generally required by DUNKIN' DONUTS
for shops 01 comparable ago and condlllon. i:late of this Agreement
5. P. In the event FRANCHISEE, or any partner or shareholder thereol, holds any mterest in R DUNKIN' DONUTS
franChise other than the DUNKIN' CONUTS SHOP. FRANCHISEE and Ihe parlners and shareholders of FRANCHISEE
who own an inlereslln any other franChlss(s, agree to execute concurrenlly With thIS Agreement DUNKIN' CONUTS'
AGREEMENT OF CROSS.GUARANTEE to DUNKIN' CONUTS for the payment of tees, 'ents and other Obligations tor
each franchise in which FRANCHISEE or any partner or shareholder thereof holds or acquires any interest.
5. a. FRANCHISEE agrees to comply promptly with all applicablelawl, rules. regulations, ordlOances and orde...
of public authorittes including, but nollirruted to.. Government AgenCIes. Board 01 Fire Underwriter. and other similar
organizations. The term ~Government AgenCies~ shall indude Without limitation all governmental units, however
deslgnaled, which address health, safety,' samlalion, environmental or other issues aHecting operations 01 the DUNKIN'
DONUTS SHOP.
5. R FRANCHISEE agrees 10 submit to CUNKlN' CONUTS promplly upon receipt thereof, copies 01 all customer
comptaints and notices and communications from Government Agencies and hereby authonzes GovernmentAgencies
to prOVide directly to DUNKIN' DONUTS copIes 01 all such notices and communIcations.
5, S. FRANCHISEE agrees 10 enter into this Agreement and the vallous other agreements with DUNKIN' DONUTS
as an Individual, individuals, general Partnership or corporation prOVIded thalal! individuals, general partnetl, officers,
sharehQ(ders and directors (I' a corporatIon) Will be reqUired 10 personally guarantee lull paymenl and performance
01 FRANCHISEE'S money and other obligallons under Ihis Agreement and any lease for Ihe premises with DUNKIN'
DONUTS or its subSidiary.
5, S, I. "FRANCHISEE is a corporation, said corporalion musl be in compliance with tho requirements applicable
to corporationsllll 'orth In paragraph 10.C. hareol;
5. S.2. FRANCHISEE may not be 8 limited partnership, trust or other entity not specifically authonzed herein.
8. A. In order to preserve the validity and integrity of the PROPRIETARY MARKS and to assure that the standards
and speCIfications of Ihe DUNKIN' DONUTS SYSTEM are properly employed in Ihe operation 01 the DUNKIN' DONUTS
SHOP, DUNKIN' DONUTS. or ils agents, shall have the nght, at allUmes, to enter and inspect the DUNKIN' DONUTS
SHOP and the nght to select matenals, ingredients, products, supplies, paper goods, uniforms, fixtures. furnishings,
signs and equipment for evaluation purposes to assure that these items conform to the standards and speciflC8tions
01 the DUNKIN' DONUTS SYSTEM. DUNKIN' DONUTS may require FRANCHISEE to remova any Item which does not
conform With applicable standards and specifications. DUNKIN' DOl4UTS may remove or deslroy at FRANCHISEE's
expense any Item which does nOI conform to applicable standards and specdications.
a, B. If, Wilhln twenty.four (24) hours following written notice by DUNKIN' DONUTS requesting the correction of
an unheallhy, unsaMltary or unclean condition. or Within thirty (30) days follOWing wntten notice by DUNKIN' DONUTS
requesting flpairs, alterations or painting of the DUNKIN' DONUTS SHOP, FRANCHISEE has not corrected the
condition or completed the repairs, alleralions or painting, DUNKIN' DONUTS may. wlthoul being guilty of, or liable
for, trespass OJ tort and WIthout Prejudice to any other rights or remedies, enter the DUNKIN' DONUTS SHOP and cause
the repairs, alterations or paintlng to be completed, or the condItion 10 be corrected, althe expense of FRANCHISEE.
e. C, DUNKIN' DONUTS' representalNes shall have the nght to examtne FRANCHISEE's onginal books, records
and supporting documents at reasonable times and to perform such lests and analyses as it deems appropriate to verify
GROSS SALES. If an examinallon reveals tMt the GROSS SALES reported by FRANCHISEE to DUNKIN' DONUTS are
lell than the GROSS SALES ascertatned by the examln.1tion. Ihen FRANCHISEE shall immechatety pay to DUNKIN'
DONUTS any amounls OWing to DUNKIN' DONUTS and the Fund and DUNKIN' DONUTS' flntalsubsidlary based upon
thecorreCled GROSS SALES. All examinetions shall be at the expenseof DUNKIN' DONUTS; however. if 8n examination
results from FRANCHISEE's failure to prepare, dahver or preserve statements or records requifld by Paragraph 5.H.
of this Agreement. or results in the discovery of a discrepancy in the GROSS SALES reported by FRANCHISEE,
FRANCHISEE shall pay, or reimburse OUNKIN' DONUTS lor any and all expenses connected wilh Ihe examination.
lnduding, but nOI limited to, reasonable accounting and tegallees, the unp81d amounts owed 10 DUNKIN' DONUTS,
lis rental subSidiary and the Fund, and interest thereon Itom the date payment was due at t e% per annum orthe highest
permiSSible rate. Such payments Will be Without prejudice to any other remedies DUNKIN' DONUTS may have under
tnis Agreement, Includmg the nghl to terminate, Without opportUMlty to cute. In the case 01 intentional underreporting
01 GROSS SALES.
e. D. FRANCHISEE and all partners and shareholders of FRANCHISEE shall, upon the request of DUNKIN'
DONUTS In connectJon With the examination 01 FRANCHISEE's books and records under Paragraph a.C, of this
Agreemenl, prOVide DUNKIN' DONUTS' representatIVos With personal lederal and stale tax returns. bank statements
(Induding depoSit slips and cancelled cheCkS) and such othor documents and inlormation as DUNKIN' DONUTS may
In its sole diwellon request In COnnection WIth DUNKIN' DONUTS' efforts to Vlflfy GROSS SALES reported to DUNKIN'
DONUTS under this Agreement or any LEASE OF DUNKIN' DONUTS SHOP. Porsonallax relurns and financlal data
unrelaled to the franchise busme" need not be prOvided by any partner or shareholder of FRANCHISEE who has not
been active in the bUSiness and, 1M addition, has not directly or Indlroct1v owned or conlrQ(led at least a majority Interest
In the franChise or any LEASE OF DUNKIN' DONUTS SHOP. alone or In conjunction Wllh any olher famity member or
relaled entity.
e. E. FRANCHISEE hereby granlS DUNKIN' DONUTS Iho irrevocable rIght to inspect the records of aUsupptlef1,
distributors, group purchasing programs, distributIon centers. nnd other third partlos Supplying load products,lupplies,
equipment and malenals to FRANCHISEE and horeby irrovocablV authOrlZQs such parties to release such records 10
DUNKIN' DONUTS,
Franchi....
D.v,loped
R'II Ellltl
R.model
INITIAL
IP
CompUlnc. with
Regulltlona
Perlonal
QUI,.nt...
C.rtaln Rlghtl
01 DUNKIN'
OONUTS
5
7. A. FRANCHiSeE acknO\'/ledgel that "DUNKIN' DONUTS. is a reglllered trademark, that Hid mark hal been
and II being ulld by DUNKIN' DONUTS and bV ils Iranchilles and licensees, that laid mark, together WIth the ather
PROPRICTARY MARKS, prellnllV owned by DUNKIN' DONUTS or which may be acquired In the Mura. eonltltutel
~ oltha DUNKIN' DONUTS SYSTEM and thai valuable gOodWill IS aSloclated with and anached to laid mark and
Ihl oth.r PROPRIETARY MARKS. FRANCHISEE agreel to use laid mark and the olher PROPRIETARY MARKS only
in the manner and to the elltenl IPeClflcallv hcensed by this Agreement. FRANCHiSeE funher agrees that any
unauthorized UII or eonllnued ule after the lermlMallon ollhil Agreement Ihall conltltu1e irreparable harm lubjectlo
Injunctive relief.
7, A.1. FRANCHISEE underslands that FRANCHISEE's license to use any or all 01 the PROPRIETARY MARKS
Is non...clusive and relalel loIely 10 the locallon setlor1h in Paragraph 1.A. of thia Agreement. FRANCHISEE further
acknowledges that DUNKIN' DONUTS. in Its ,ola discretion, has tha right to operata or Iranchlll other DUNKJN'
DONUTS SHOPS and sales oullets under, and to grant other licensosln, and to. any or all 01 the PROPRIETARY MARKS.
in each casl at luch locations and on Such terms and condllions as DUNKIN' DONUTS deems accoptable.
7. A.2. FRANCHISEE agrees that, during the term of this Agreement and after the ellplratlon or termination thereol.
FRANCHISEE shall not directly or indirectly contest or aid in contesting the validity or ownership of the PROPRIETARY
MARKS.
7. A.3. FRANCHISEE agrees to nOllly DUNKIN' DONUTS promplly 01 any Iitigatiot1 Instituted by FRANCHISEE.
arby any person, firm or corporation against FRANCHISEE. relating 10 the PROPRIETARY MARKS. In the Ivent DUNKIN'
DONUTS undertak.. the defense or prosecution 01 any such IillgatiOn, FRANCHISEE agreel to ellecute any and 811
documents and do luch actl and things as may, in the opinion of counsel for DUNKIN' DONUTS, be necessary to catTY
out IUch delense or prosecullon.
7. B. 1111 e.prellly recognized that any and all goodwill associated WIth the PROPRIETARY MARKS, InchJdlng
any goodwill whIch might be deemed to have ansen Ihrough FRANCHISEE's actlvitl.., Inurel directty and e.c1ullvely
to Ihl benefll 01 DUNKIN' DONUTS.
7. C, FRANCHISEE shall operate, advertise and promote the DUNKIN' DONUTS SHOP under the name .DUNKJN'
DONUTS., with no accompanYlRg words or symbols 01 any nalura, except al may be otherwise required by law.
FRANCHISEE shall not use, as part 01 its corporate or olher bUliness name, any PROPRIETARY MARKS Uled by
DUNKIN' DONUTS, including, but not limited to, ~DUNKIN DONUTS., .CUNKIN-, .OUNK- or any lorm or varlallonl
thereol which, In the judgment 01 DUNKIN' DONUTS, Is likely to cause third parties to be confused or mistaken with
respect to the separate idenllties of DUNKIN' DONUTS and FRANCHISEE.
8. A. During the term of Ihis Agreement or any elllension thereof, and lor 8 penod of two (2) years thereafter.
regardlesl 01 the cause ollermination, neIther FRANCHISEE, nor any par1ner, II FRANCHISEE II 8 partnership, nor
any shareholder, it FRANCHISEE Is a corporallon, shall, ellcept With respect to the ownership or operation by thl
FRANCHISEE of addillonal licensed DUNKIN' DONUTS shops:
8. A.1. Divert or altempt to divert any business or custom.r of the DUNKJN' CONUTS SHOP to any competitOr,
bydlrect or indIrect Inducement or otherwtse, or do or perform, directly or Indirectly, any other act Injurious or prejudicial
10 the goodwill ..soci.'.d with DUNKIN' DONUTS' PROPRIETARY MARKS end the DUNKIN' DONUTS SYSTEM;
8. A.2. Employ or seek to employ any ptl'lOn who is at that lime employed by OUNKJN' DONUTS or by any other
DUNKIN' DONUTS franchisee, or otherwise directty or Indirectly IndUCe such person to leav. such employment:
8, A.3, Own, maintain, engage in, be employed by, or have any Interest In any other business which sells or offers
to sell any product 01 a type offered by a DUNKIN' DONUTS shop; provided that, during the two (21 year period lollowing
e.~rallon or termination 01 this Agreement only. the provisions 01 this subparagraph 3. shatl not apply to Mothlr
bullnl" located more than live (51 miles from the DUNKIN' DONUTS SHOP or Irom any other DUNKIN' DONUTS shop.
Either patty to this Agreement, upon notice in writing to the other, shall have the right to have determined whether saki
five (5) mde radius Is a reasonable restriction on FRANCHISEE's activities during said two (2) yell periOd by requesting
lhat thl matler be submined to arbitration in accordance With the rules 01 the American Arbitration AssoclaUon then
applicable lor commercial disputes. In such event. each party shatlselect one arbitratot' and th.1WO shall select I third
and the deciskJn of the arbitra10rsshall be linal and bInding upon the per1ies. FRANCHISEE lurther agrees that, In the
event IIbltrallon Is requested. FRANCHISEE will engage in no compellliYe activilJes pending resolution of the dispute;
or
Proprll.lry
Mlrk,
Restriction,
on thl
FRANCHISEE'S
ActtvlUes
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8. A.4. Communicate or divulge to. or use lor the benefit of, any other person, persons, partnership, association
or corporation any Informalion or knowledge concerning the melhods 01 constructing, equipping or operating a
DUNKIN' DONUTS shop and a1t other Inlormatlon or knowledge which DUNKIN' DONUTS deems confidential which
may be communlcaled to FRANCHISEE, or 01 which FRANCHISEE may be apprised by vir1ue of FRANCHISEE'I
operation under the tprms of this Agreement. FRANCHISEE shall dtvulge such conlidential inlormation only 10 luch
of III employees as must have eCcess to illn order to operate the licensed busineSS, Any and alllnlonnation, knowfedg.
and know."ow Induding. wilhout limitation, drawings. materials, specifiCations, techniques, and oth.r data, which
DUNKIN' DONUTS designates as canfidenllalshall be deemed confidential for purposes ollhis Agreement. DUNKJN'
DONUTS lhatl have the non-exclusive righl to use and incorporate in the DUNKIN' DONUTS SYSTEM, for the benefit
of itselt and other franchisees of Ihe DUNKIN' DONUTS SYSTEM. any modifications. changes, and improvemenll
developed or discovered by FRANCHISEE or FRANCHISEE's employees or agents in connection With the licensed
business, without any liability or obligation to the developer thereot.
8. a. The covenants contained in thIS Paragraph 8 shall be construed as severable and Independent and shall
be interpreted and applied conslsl8ntly Wllh the requirements 01 reasonableness and eqUIty. If all or any portion of a
covenant In this Paragraph 8 Is held unreasonable or unenforceable by a court or agency having valid Jurisdiction In
a decision 10 which DUNKIN' DONUTS is a party, FRANCHISEE expressly agrees to be bound by any lesser covenant
induded Within the terms of such greater covenant lhat imposes the mll.limum duty permitted by law, as if thl18ls.,
covenant were aeparately atatad In, and made a pan of, this Paragraph.
8. C. FRANCHISEE understands and BcknOW1edges tha1 CUNKIN' DONUTS shall have the right, In its lOll
discretion. to reduce the scope of anycovenantaollonh in 1his Paragraph 8, or 01 any portion or portions thereof, Without
FRANCHISEE's conSent. and FRANCHISEE agrees 10 comply 10r1hwith With any covenant as modified, which shall be
tully enforceable. the provisions of ParagraphS 14.A. and/or 15 of this Agreement nOlWlthstanding.
8. D. FRANCHISEE agrees that the ellistencs 01 any claims egalnst DUNKIN' DONUTS, whether Of not arising
from this Agreement. shall not conslltule a delensD to the enloreement by DUNKIN' DONUTS of the covenant. In this
Paragraph B.
8. E. FRANCHISEE acknowledges that FRANCHISEE's violation of the terms at lhis Paragraph 8. would rllult
In Irreparable inlury 10 DUNKIN' DONUTS for which no adequate remedy at law may be avadabl., and FRANCHISEE
accordingty cons~nls to the issuance 01 an injunctIon prOhibiting any conducl by FRANCHiSeE In ViolatIOn olthllenns
01 this Paragraph 8.
9. A. FRANCHISEE shall be In default undor thIS Agreement: De'.uh
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9. A.1. If FRANCHISEE shall become Insolvent at make an assignment tor thl bene'll ~edllor.. or" a petlllon
In bankruptcy is flIed by FRANCHISEE. or such. petItion lallled 8g81"II and consented 10 by FRANCHISEE. or is not
dilmilltd wIthin thirty (301 days. or It FRANCHISEE I, adjUdicated 8 bankrupt, or I' I bill in eqUlIy or olher proceltding
tor Ihlappomtment of a receIve, of FRANCHISEE or olha, custodian for FRANCHISEE', busme.. or Bssels is filed
and il consented 10 by FRANCHISEE or is nol dismissed wlthl" thirty (30) days. or a receiver or other custodian i.
appointed, or it proceedings tor compoSition WIth creditors unde, any Ilale or led.rallaw should be inslltuted by or
againlt FRANCHiSeE or If Ihe real 01 personal property 01 FRANCHISEE lhall be 100d aileV)' thereupon by any Ih.rin.
marshal or con.lable.
9. A.2. 'f FRANCHISEE fails to comply wllh any law, regulation, order or DUNKIN' DONUTS standard relating to
health, san.tallon or safety; or If FRANCHISEE ceases 10 operate, but does nol abandon, Ihe DUNKIN' DONUTS SHOP
tor a penod of fony eight (46) hours wllhoullhe prior wllnen consenl at DUNKIN' DONUTS.
9. A.3. If FRANCHISEE lalls, refuses, or neglects to pay when due 10 DUNKIN' DONUTS any monies owing 10
DUNKIN' DONUTS or to the Fund.
9, A.4. If FRANCHISEE lails to COmply with any 01 FRANCHISEE's obligatIons under Ihis Agreement not otherwise
set fonh In Paragraph 9 at this Agreement; or II FRANCHISEE falls to carry out in all respects ils obligallons under any
leul tor the DUNKIN' DONUTS SHOP, or under any mortgage, equipment agreement, promiSSOry nole, cond.tIonal
tal" contract or other contract materially affecting the DUNKIN' DONUTS SHOP to which the FRANCHISEE II. paIIy
or by which FRANCHISEE is bound, whether or not CUNKlN' DONUTS is a party thereto.
9. A.S. II FRANCHISEE abandonslhe DUNKIN' DONUTS SHOP; or il FRANCHiSeE lntenllonally underreports
GROSS SALES OJ fallllies tinancial data; or II FRANCHISEE's lease for the DUNKIN' DONUTS SHOP With DUNKIN'
DONUTS or a subsidiary 01 CUNKlN' CONUTS Is terminaled or expires,
9. B. Except 8S otherwise provided In Patagraph 9 at this Agreement, FRANCHISEE shall haye the right 10 cure Cure penoct
FRANCHISEE's default under this Agreemenl wllhin the appllcabfe penod set forth below, following wrinen notice of
default from DUNKIN' DONUTS. In the BYent thai 8 statute In Ihe Ilate wher.in thl DUNKIN' DONUTS SHOP 1,localed
require, a cur. period lor the applicable delault which Is long.r Ihan Ihe cure period specdled below, lhe stalutory cure
ponad .haJllpply.
9. 9,1. A twenly four (24) hour cure penod shall apply 10 Ihe 'itolation of any taw, regulation, order or DUNKIN'
DONUTS standard relating to health, sanltallon or safely; or if Ihe FRANCHISEE ceBSes to operate, but doe, not
abandon, the DUNKIN' DONUTS SHOP lor a period 01 lorty eight (461 hours WIthout the prior wnnen consent 01 DUNKIN'
DONUTS.
9. 9.2. A SBYen (7) day cure penod shall apply if FRANCHISEE fails, refusII, or neglects to pay when due to
DUNKIN' DONUTS any monies OWIng 10 DUNKIN' DONUTS or to Ihe Fund, or il FRANCHISEE lails to maintain the
Insurance coverage lit fonh in Paragraph !5.J. 01 this Agreement.
9, 9.3. A thirty (30) day cure period shall apply I' FRANCHISEE lails 10 comply Wllh any 01 FRANCHISEE's
obligations under this Agreement, unless otherwise specified in Paragraph 9 of this Agreement, or if FRANCHISEE lall,
to carry out in all respects its obligations under any lease lor the DUNKIN' DONUTS SHOP, or under any mortgage,
equipment agreement, promissory nOle, condillonal sales contrad or other contract malerially arlecting the DUNKIN'
DONUTS SHOP to whiCh FRANCHISEE IS a party or by which the FRANCHISEE Is bound, whether or not DUNKIN'
DONUTS is a party thereto,
9. B.4. No cure period shall be ayallable .1 FRANCHISEE abandons the DUNKIN' DONUTS SHOP; or it No Cur. Period
FRANCHISEE intenlionally Underrepons GROSS SALES or falsdies linanClal dala; or if FRANCHISEE's leaS8 lor the
DUNKIN' DONUTS SHOP WIth DUNKIN' DONUTS or a subsidiary of DUNKIN' DONUTS is lerminated or expires.
9. C,1 If FRANCHISEE fails to remit when due any payments required under this Agreement, FRANCHISEE Int.,... Ind
agrees to pay all collection cosll, reasonabfe enorney's fees and interest on the unpaid amounls at 18% per annum COlli
or Ihe highest permiSSible rale, in addItion 10 Ihe unpaid amounts.
9. C.2 II FRANCHISEE latll to cure a delaull, following nollce, WIthin Ihe applicable lime period lit forth In
lubparagraph 9.B., or if Ihis Agreemenlls terminated, FRANCHISEE shall pay to DUNKIN' DONUTS all damages, cosll
and expenses, indud;ng Wllhout limitalion inlerest at 16% per annum, or Ihe highest permitsable rale, and reasonable
attorneys' le8l, incurred by DUNKIN' DONUTS as a resull 01 any sucn delault or termination; and said inlerest and all
damages, costland expenses, induding reasonable anorneys' fees, may bo induded In and form a pan 01 the Judgment
awarded to DUNKIN' DONUTS In any proceedings brought by DUNKIN' DONUTS against FRANCHISEE. Continued
use by FRANCHISEE 01 DUNKIN' DONUTS'lrademarks, trade names, PROPRIETARY MARKS, and IIMce marlts after
termination 01 lhis Agreement shall constllute WlHlul trademark inlringement by FRANCHISEE. Nothing In thIs
Agreement shaJl preclude DUNKIN' DONUTS from seeking any remedy under federal or slate law for willful trademark
infringement, indudlng WIthout limitation treble damages and injunctive relief.
9. D, Except as set lonh in Paragraph 9.e" if FRANCHISEE lails to cure 10 DUNKIN' DONUTS satisfaction wilhln Termlnltlon
the applk:able periOd fOllOWIng nollce Irom DUNKIN' DONUTS, DUNKIN' DONUTS may, In addition to all other remedies
at law or In equity or as Olhel'W1se aet lorth in lhts Agreement, immedIately lerminale Ihis Agroement. Except as let
forth In Patagraph 9.E., auch termination shall be errocllVe Immediately upon receIpt 01 a wrlnon nottce 01 termination
'rom DUNKIN' DONUTS.
9. E. This Agreement shall immedialely lerminale upon Ihe occurrence 01 any event aetlOr1h in Paragraph 9.A.l"
without opportunily to cure or notice olterminallon.
9. F, Upon any lermination or e.piralion 01 this Agreement:
9. F.l. FRANCHISEE shall promptly pay 10 DUNKIN' DONUTS all sums OWing or accrued priOrlO such lermin_l/On
or expiration lrom FRANCHISEE to DUNKIN' DONUTS, the Fund, and DUNKIN' DONUTS' renlalsubsidiary. Said sums
shall also Include inlerest 01 16% per annum or Ihe highest permIssible rate and any damages, costs and I..pensel,
induding reasonable anomey's fees, incurred by DUNKIN' DONUTS by reason of defaull on the part 01 FRANCHISEE.
9. F.2, FRANCHISEE shall immediately coase to use, by adyer1lsing or in any other manner whatsoever, any
methods associated with Ihe name .CUNKIN' DONUTS.. any or all 01 the PROPRIETARY MARKS and any other ttlde
sectltl, confidential inlormatlon, operallng manuals, Slogans, signs, symbols or devices lorming part of the DUNKIN'
DONUTS SYSTEM or otherwise used in connectIon Wllh the operatIon 01 the DUNKIN' DONUTS SHOP. FRANCHISEE
agrlel that Iny unauthorized usa or continued use after lhe terminatIon 01 Ihis Agreement shall conslltute Irreparable
harm subject 10 inJunctlye relief.
9. F.3. FRANCHISEE shalllmmed.ately return 10 DUNKIN' DONUTS all operating manuals, plans, SpecificatiOns
and other malenals containing Informallon prepared by DUNKIN' DONUTS and relallYlt to the operation of a DUNKJN'
DONUTS SHOP. and
9.F.4. FRANCHISEE shall continue to comply Wtlh.lor tho POlled SPoclfied therein, Paragraph 6_ ollhll Agreement.
7
9. Q. No rIght 0' remedy herem conhmed upon or releNed 10 DUNKIN' DONUTS II ellCluI1V8 of InV Olhlr nght
or IImldy herein, or bV law at equllV provided or permlned, bul elch shall be cumulalivl of every othet nght at remedy
given herounder,
10. A. This Agreement shall Inure to Ihe benefit ollhe successors and aSllQna of DUNKIN' DONUTS. DUNKIN'
DONUTS shall have 'he nghllO asSIgn Ita righlS under this Agreemefilto any po~, persons, pat1nerahlp. BllOCl8tlOn or
corpotalion, Provided thalUlolranaferee agrees in wrltmg toallumeall abllgabons under1aken by DUNKIN' DONUTS het8l11
and FRANCHISEE recerves a slatement from both CUNKlN' DONUTS and Itstranslereetothalettect. Upon such ulIQnmenl
and auumpllon. DUNKIN' CONUTS shall be under no further obilgallan hereunder, except for 8CClUed lIabllltles. II any.
10. B. Except as her81nafter prOVIded, neither FRANCHISEE, nor any partnor, II FRANCHISEE is. panneMlp, nOt
any Ihautnalder.11 FRANCHISEE is a corporallOn. WIthOut DUNKIN' DONUTS' pnor wllnen conlenl, shall, bV operation of
law or otherWIse. sell, aSSIgn, transle,. convey, give away, pledge, mortgago or olhefWlse encumbet' 10any person, persons,
pamerlhip, auoaallon or corporallOn, any Inlerest in thiS Agreement, or any mlernt In Ihe franchlse granted hereby, or
any Interest In any propnotDr1hlp, partnership or corporatIOn which OWOIanv Inlerestln the franchise, nor offer, permt 01'
suller the 18me. MV purported assignment or Iransl8+' not having the ptlOt wrltlen consent 01 DUNKIN' DONUTS shall be
nul and VOid and shall consblule delault hereunder. MV proposed Itansler musl meot all the reqUlroments ot DUNKIN'
DONUTS Induding, but not Ilmlled to Ihose sel forth in Paragraph to.C. and the follOWIng:
10. B.l, FRANCHISEE shall have operated the DUNKIN' DONUTS SHOP 10' a periOd o'lil( (51 months pnOl to the
ptOpOI8d lransler.
10. B.2. Theslles poee ollhe Interest 10 be conveyed shall nol be so hlQh. in the good faith ludgment ot DUNKIN'
DONUTS. as 10 jeopardiZe Ihe abllily ollhe translete, to maintain, operate and promole the DUNKIN' DONUTS SHOP
property and meet his finanClal obligations 10 DUNKIN' DONUTS, Ihird party suppliers and creditors. This provision shall
not Cl'eall any 11Bbility on the pan at DUNKIN' DONUTS 10 !he transleree In the event that DUNKIN' DONUTS approves !he
transfe, and the transferee ellpenences finanoal difficulties.
10. B.3. The Iransferee may not be a limited partnership, trust or othet entity nOlspeotically authorized heteln:
10. 8.4. AJleccruod money obl;gations of FRANCHISEE 10 DUNKIN' DONUTS, the Fund. DUNKIN' DONUTS' rental
subsidiary, and obligations of FRANCHISEE which DUNKIN' DONUTS has guaranteed, liens, deferred rent and aD olhlt'
obligations under the lEASE OF DUNKIN' DOI'-4UTS SHOP. it any, shall have been sallsfied prior to auignment or lransflt,
10. B.S. The DUNKIN' DONUTS SHOP, including eqUIpment, Signs. building, imprO\lements. interiOtandell1erior, shall
be in good operabng Condlllon and repair and in compliance With DUNKIN' DONUTS then-currenl standards, including
without Umilalion rep4aCements and additions.
10. B.6. FRANCHISEE and any transferee hereby agree nollo assert any s8CUnly interest. lien, claim or nght now or
hereaftef in this franchise, the lranchise granled lathe Iranateree, Oflease lOt the DUNKIN' DONUTS SHOP and further agree
thai any security inlemt, lien, claim or tight asserted With respect 10 any personal property at the above location shall not
Indude any after-acquired property and shall be subject, junior and subOtdln81e to any aecunty interest. lien, claim or rlQht
now 01 hereafter asser1ed by DUNKIN' DONUTS, Its SUCC8SIOfS or assigns.
10. B.7. In the event the lransferee, Ot any partner or shateholder lhereof. holds any Interest in a DUNKIN' DONUTS
franchise other than the DUNKIN' DONUTS SHOP, the transferee and the partners and shareholderllhereol who own an
'ntltl'nlln other DUNKIN' DONUTS franchise(slshall execule DUNKIN' DONUTS' AGREEMENT OF CROSS-GUARANTEE
to DUNKIN' DONUTS for the payment 01 fees, rents and other obligations for eacn DUNKIN' DONUTS franchise{s) In which
the transteree or any partner or shareholder thereof holds or ecquires anv inlerest
10. C. DUNKIN' DONUTS shall not unreasonablV withhold ils consent to any Iransler referred to in Paragraph 10.B,
of thi, Agreement when requested, prcMded, however:
10. C,1. I( FRANCHISEE Is an mdlVidual or partnership and desires 10 aSsign and transler this Agreement to a
_on:
Tranll., 01
Intere.t
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a. Said In1nsferee corporation shaU be newly organized and Its charter shall prOVIde that Its activities are
confined exduSively 10 operallng DUNKIN' DONUTS shops as licensed under this Agreement.
b. FRANCHISEE or, If FRANCHISEE is a partnership, Iho partners licensed herein to operate the franchise
shall be the owner or owners of the ma,onty slock interest of Ihe transleree corporabon.
c. FRANCHISEE or, II FRANCHISEE Is 4 partnership, one ollhe partners licensed herein to operate the
lranc:hise shall be the pnnCipal ellocullve officer of tho corporatIOn.
d. The transleree corporalion and all sharehOldef1 of transleree corporalion shall enter into a wnnen
assignment, under seal, In a form SBllslactory 10 DUNKIN' DONUTS, W11h the transferee corpot8bOn assuming all of the
FRANCHISEE's obligations under this Agreement.
e. All shareholders of the transleree corporallon shall enler into a wnnen agreement. in a form I8Illfac:lory
to DUNKIN' OCNUTS, jointty and severalty guaranteeing the fult payment and performance of the l1ansferee corporation'.
obligetions 10 DUNKIN' DONUTS,
r. Each stock certlflCale of the transferee corporatIOn shall have conSPiCUOUSly endorsed upon iI a statement
that iI is held subject to, and that further aSSIgnment or transfer thereol is sublect 10, all restncbons imposed upon 1t8nlf8f1
by this Agfeemenl: and
g. No new shares of common or preferred voting stock In the transferee corporation shaH be Issued to any
person. persons, pannershlp, asSOCUlbon or corporation WllhOut oblairung DUNKIN' DONUTS' priorwnnen consent, which
shaU not unreasonably be WIthheld.
10. C.2. If a transfer, alone or together WIth othe, pr8'llOUS, Simultaneous 0' proposed translefl. whethet related or Tranlfer of
unreialed. would have the effect of transfernng an Inlerest 01 fifty petcent (50%) at more In the franchise licensed herein. Control
or the enllty holding such franchise, to someone olher than an orIginal signalory at this Agreement:
a. The transferee and each partner and shareholder 01 trlUlsferee must be 8 United States Cililen or lawful
reaidenl8llen of Ihe Uniled Slates and shall be 01 good moral character IlOd reputation and shalf have 8 good credit rating
and business qualrficatiOns reasonably acceptable 10 DUNKIN' DONUTS. Such qualifICations include. withoUt Iimdatlon.
ldlrlCy and Iluency in the EngliSh language luffiCiont.lR the gOOd '81th opmiOn 01 DUNKIN' DONUTS, 10 communk:ale with
employees, customers, and lupplletl of DUNKIN' DONUTS and 10 sallstactonly complete training at DDU. FRANCHISEE
shal pnMde DUNKIN' DONUTS with such information as DUNKIN' DONUTS may teqUlre 10 make such determnatlon
concerning each such proposed transleroe;
b. The transler" musl deSig0418lWo managefllor tho DUNKIN' DONUTS SHOP, one 01 whom mUI' be
8lransferee Ot 8 partner Ot lhatehotder 01 the transleree. Pnor to the lransfer, bolh managers must succeutu!tv compltt.
the DUNKIN' DONUTS ttalnlng course then lR effect for franchisees;
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c. Thetranlletee. Including aUlhareholdera and partners ollhe Iransle,ee. lhalI)Ol and leverally 811llCUte,
on DUNKIN' DONUTS'then currenllorms, a Franchtse Agreement and Bny other standard 8llClUary agreement, IncludlOQ
without llrT\llauon a priOnty DBvment acpeement. II applicable, with DUNKIN' DONUTS. The pnonty in paynmnt agreement
WIll ptOvlde. among other ItllngS. lhal ,I the transferee IS unable al any lime to make payments to the 'ransleror for the
purchase of the DUNKIN' DONUTS SHOP and 10 DUNKIN' DONUTS and/or liS rental subSIdiary under thl ffanchlae
Agreement and Lean, thai payments to DUNKIN' DONUTS. the fund. and DUNKIN' DONUTS' rental lubsldLaty WID have
prIOrtIy. With respect 10 the then current Franchisee Agreement. 00 greater percentaQ8I of the GROSS SALES than thOle
required by P81Bgrapttl 4.E. and 4.F. sholl be required.
d. Thelrans'eror. and a~ individuals propoSIng 10 Iransler an inlerest in the franChISe. aha1lalllCUte a general
rete... under lOaI of all claims agalnsl DUNKIN' DONUTS and a pnorlty In payment agre8menl, it applicable,
e, Unless a longer penod 11 agreed upon bV DUNKIN' DONUTS and Ihelransleree,lhelerm of the FranchiH
Agreement required PuraUBntltllllubParagraph shall be for Ihe unelplred term 01 this Agreement. Except In the Instance
that. Period longer lhan the unelplred torm 01 thIS Agreement is agreed upon by DUNKIN' DONUTS, lIansfer" shall pay
no INmAl. FRANCHISE FEE as prOVIded In Paragraph 4. of thIS Agreement.
f, II transler.e is a corporation:
(1) Each slock certrf1Cate of Ihe Itansleree COIpotatlon shall have conspicuously endorsed upon it.
statemenl that it is held subted 10, and that further asslIJnment or Iransfer thereof Issubjoct to, all restrk:lions imposed upon
Iransre,. bV lhis Agreement:
(2) No new ,hares of common or preferred voting stock In the transleree corporatton shall be issued 10 any
person, persons, parlnerahip, association or COfpOraliOn wIthOut obtaining DUNKIN' DONUTS' prior written cannot; and
(3) All shareholders olChe transferee corporation Shall enter Into a wntten agreement, in a Ionn satiSfactory
to DUNKIN' DONUTS, tointly and severally guarant881ng the fuU payment and performance of the transferee corponttion'.
obllga/lont to DUNKIN' DONUTS,
g. FRANCHISEE shall hsvelully pwd and satlsfied all of FRANCHISEE's obligations 10 DUNKIN' DONUTS,
the Fund, and DUNKIN' DONUTS' renUd SubsidlOly and DUNKIN' DONUTS shall have been pald a Transler Fee equal to
Che oreaterof Four Thousand Dollars 1$4,OO(>.OOI,lMCteased by S%compounded annuallydunng the term of this Agreement
and any renewm pehod, or:
(I) 5% 01 the AdJusled Sales Price 01 the DUNKIN' DONUTS SHOP if Ihe sale takes place wtlhln Ihree (3)
yellS after the date on which FRANCHISEE opened the SHOP 10 thO PUbliC (as a new shOp), or the date on whiCh
FRANCHISEE acqUired Ihe SHOP (as a prOVlOUSIy operated shop); or
(2) 3% of the Adjusted Sales Pnce of the DUNKIN' DONUTS SHOP illhe sale takes place after three (3)
velll from the date on which FRANCHISEE opened the SHOP to the PUbliC (as a new shOp), or Che date on which
FRANCHISEE acquired the SHOP (as a previously operated shop),
The AdJuSled Sales Price shall include, Wilhout Iimilabon, cash, assumpllon of debt, equiptnentlease
. obligations, and deferred finllnClng and amounlS allocated to property 01 every kind, nature and descnption: fumilure,
fixtures, signs, equipment, IUPPUes and invenlory: elduding onty amounts reasonably a11Oca1ed to land and building If
owned by FRANCHISEE, It is Inlended that all conSideralion to be p8ld 10 FRANCHISEE, or for the benefit of FRANCHISEE.
however deSignated and whether or not induded in the Conlract 01 Sale shall be deemed part of the Adlusted Sales Pnce
lnduding, but not bV way of limitation, omounls allocaled 10 a covenant not 10 compete or personal seMce agreement
The Ad/usled Sales Price shall be tho Sales PrICe to be receIVed bV FRANCHISEE upon Uansler 01 the
DUNKIN' DONUTS SHOP less the amounl paid by FRANCHISEE lor the DUNKtN' DONUTS SHOPifpurchasod from another
franchisee or from DUNKIN' DONUTS as a prevIOusly operated lhop, No adjuslmenlshall be made lor amounts paid in
connection WiCh the developmenl 01 a new DUNKIN' DONUTS Ihop.
DUNKIN' DONUTS WlU waive the fIVe percent 15%) or Ihree percent (3%) fee but not the filed fee of $4,000
(subject 10 Increase) In connecllon With Iransfer of Ihe DUNKIN' DONUTS SHOP 10 FRANCHISEE'S spouse or one or R'lOfe
of FRANCHISEE'S children prOVIded that. in DUNKtN' DONUTS' good faith opinion, FRANCHISEE has been in full
comptiance with the lerml of all agreements WIth DUNKtN' DONUTS and ils rental subsidiary, However. the Francnlse
Agreemenlissued to the lpouse and/or children will be on Ihe Ihen curren1 form In use at the time 01 transfer inctuding the
Chen current Transfer Fee prCMSlon.
For purposes at determming the cOl'red Transfer Fee, DUNKIN' DONUTS reserves the right to reaUocate
amounts which FRANCHISEE and the transleree hoveallOC8led to land, bUIlding, equipmenl, covenan18g8lnstcompetitlOn,
personal S8fVice agreement, or othel'Wlse II. in the good f8lth opinIOn of DUNKtN' DONUTS, the aJlocallon of the partin ,.
unreasonable in relatiOn to the value of Ihe Iranchlsed bUSiness. If DUNKIN' DONUTS purChaSes the DUNKtN' DONUTS
SHOP from FRANCHISEE by elerose of Its nght 01 first refusal under subparagraph 10.F, hereof, the Tranlfer Fee IhaII
be P8VJlb'e bv FRANCHiSeE 10 DUNKtN' DONUTS as It FRANCHISEE had sold the franchiled business to 8 third party,
h, Upon compliance With Ihe alofes8ld COnditionS and DUNKIN' DONUTS' approval of the transfer.
FRANCHISEE and anvlharehotders or partners partiopalLng In IBId transler shall, to the enenl of the Interest sotransf.ned,
thereupon be relieved 01 further Obligations under Iho lerms ollhls Agreement. elcept thai FRANCHISEE and any Iormet'
shareholders or partners of FRANCHISEE shaU rem8ln Obligaled lor FRANCHISEE's money obligations undet' Paragraph
4" through the dale of sale, and under thO restnctrve covenants contained in Paragtaph 8.. ~fter the dale of sale,
10, C.3, If a transfer woutd hove the effect of transfemng an Intetesl of 10rty,nIMe percent (49%) or less in the franchIIe
licensed herein. or the enhly hOlding sUCh franChISe, to someone other than an origna! signalory of this Agreement:
a. The transferee and each penner and shareholder of transferee must be a Uniled States cillzen or lawful
reaident alien olChe Uruted Stales and lhaIl be of good moral charnctor and reputation and IhaII have a good credit rating
and business qualifications reasonalJtv acceptable to DUNKIN' DONUTS. FRANCHISEE shall provide DUNKIN' DONUTS
wrth luch information as DUNKIN' DONUTS may requlro 10 make such detOfmlnalion concemlng each such propoud
transferee;
b. The transferee must deSlgnal81Wo managers lor the DUNKtN' DONUTS SHOP, one 01 whom mlilt be
a lIansferee or a partner or lharehQ/(2or of Ihelransferee. Pnor to the transler, bolh managers must successfully complete
the DUNKIN' DONUTS traiMlng course then in elled tor franchlS08S:
c, The Iranlleree,lnctudlng an Sharehu6d8fl and partners of IhelrenS'er", shalljoinUy and levltfalty executl
INs Agreement and any other standard anoIla1y agreement, inctuding Wlthoutlllnlalion a priOnty payment agreement, tf
applicable, WIth DUNKIN' DONUTS. The PnonlV In payment agreement WIll prOVIde, among otherthmgl, that ,Ithetransferee
is unable 81 any time to make payments to the transferor for the purchase ollhe DUNKIN' DONUTS SHOP and to DUNKIN'
DONUTS andIOl' Itl rentallubsldiory under Ihe Franchise Aqroemont and loaso, thai paymenlsto DUNKIN' DONUTS, the
Fund, and DUNKIN' DONUTS' rental lubll(Mry will have pnonty.
d. The transleror and alllndMduals propollng 10 tronslet on Inlerest In Ihe Iranchlse. shallelecute a g8f'l8fal
release under leal of all ckams against DUNKIN' DONUTS and a pnor.ty 1M payment agreemenl, II appltcable.
e. IllranslereelS a corporation.
Transfer Fn
S.. Addendum
lO.C.2.g.
Jij
Trani'" of IAn
TIw1 ConIrOl
,
I
,
i
i
L
9
(1) Each Ilock certlflCale ollhe transleree eotporallon Ihall haye COfllplCUOUtIy endofaed upon It 8
1l8ltment UW II il held lubttCIlO. and thai fur1her .llIgnment or transler thereol ilsubfect to, all ntslncllOtll imPOled upon
tranllet'1 by Ihll Agreemenl;
(2) No new lhatea a' common or prelenod voting Ilock In It,e Irans'er.. corporallon shall be issued to any
person, persons, partn.rlhlp, aslOCiatlon or Cf\l'porallon wllhoU1 obtOlnlllg DUNKIN' DONUTS' pnor written conlent; and
131 AUlhateOOlderl at Ihe transf.r.. corporallon shallent.r Inlo. written agreem.nt, in a lorm 1811lfactDl'Y
10 DUNKIN' DONUTS, jomuy and leyerally guatanl881ng the full payment and pertonnance 01 the transferee COIJJOf8tlOn',
obllglllon. '0 DUNKIN' DONUTS,
I. Upon compbaoce Wllh the alorel8ld conditionS and DUNKIN' DONUTS' apprO\lal of the transler,
FRANCHISEE and any shereholdersor paMIII partlClpatlng In laid transler shall, to Ih. .xtent of thelnlerBlt sot~ansl'''ed,
lh8f.upon b. relieved 01 further obllgallOns under Ihe lenn, of Ihls Agreement, except thai FRANCHISEE and any fomlet'
Ihar.hoId.... or partners of FRANCHISEE shall :emBIn obligated for FRANCHISEE', money obhgatlons under Paragraph
4., ttvough the date ollale, and under Ihe restrICtIve covenanll conlalned in Paragraph B., after the dale at sat..
10. D. In the evenl of the death 01 FRANCHISEE, or any partner or shareholder Ih8reolal any time dUring Ihelerm
at lhis Agreement, thelegaf represenlatrve 01 FRANCHISEE, pattner or sherehdder, together With allsul'VMng partners Of
shar.hoIders, If any, joinUV, shall, Wllhin Ihree(3) months 01 sUCh event apply, in wrllIng, tor Ihe "Oht lotransl.r 'he franchise,
Of theioter"1 at the deceased partner or shar.hoIder In sUCh franchis.,10 such person or persons as th.legaI repreaantallva
may lpacrIy. Such transfer shall be apprO\led by DUNKIN' DONUTS upon th.lulllllment of a" ollh. condrtiOnlsetlorth In
P8IlQfIPh 10.C.2. or 1 O.C.3. (as applicable) 01 this Agreement, excePllhat no transfer lee ,hall be required Illhe transferee
i, . beneltdary or heir of FRANCHISEE.
10. E, II Ihe legal repreaenlabve and allsurvivlng partners or shOleholders, If any, do not comply Wllh the alore~
provIsionlof Paragraph 10. Of do not propose a lransferee acceptabla 10 DUNKIN' DONUTS under the standards let forth
In PlIlQraph 10.C.2. and 10.C.3., all righll licensed to FRANCHISEE under thil Agreement shalt l.rminale forthwilh and
automa1icalty revert to DUNKIN' DONUTS. DUNKIN' DONUTS shall have Ihe right and optiOn, exerCisable upon luch
tannlnatlon, 10 purchase aIllumilure, flldures, Signs, .quipment and olherchattels at a prlC8to be agreed upon bylhe parti..
or, If no agreemenl as 10 pric. is reached by lhe partres, al such: pnc:e as may be delermined by a qualified appraiser,
apPJOYed by both parties, such approval nol 10 be u('ireBlOnably WIthheld. DUNKIN' DONUTS shall give nollce of ilsintenl
to exerelte Slid option no later than twenty-one (21) days prior to lerminatlon.
la, F. II FRANCHISEE, or any shareholder or panner therecl. has fuceived and dustres 10 accept e Signed, bona tide
written oller from a third pany to purchase FRANCHISEE's Iranchlse or sharehOlder's or partner'slnlerellln Ihelranchise,
FRANCHISEE or such shareholder or partner Shall notify and provide DUNKIN' DONUTS W1tn a copy 01 such o"er, and
DUNKIN' DONUTS shall have the right and option, exerCIsable Within 10ny,llVe (45) days after lis receipt of . copy of the
offet to purchase FRANCHISEE'S lranctuse, or sUCh shareholder's or partner's inllfest in the franchise, on the same tlfml
and conditions as offered by I8ld third p8lty'. DUNKIN' DONUTS' ell.erCll8 of its righl to purchase FRANCHISEE's franchise
hereunder shall not reli..... FRANCHISEE of ill transfer f.e obligation 10 DUNKIN DONUTS under Paragraph 10.C.2.g.
Should DUNKIN' DONUTS not .xercisa this option and the terms of the unaccepted offer be aIlered, DUNKIN' DONUTS
shall, in each Instance, be notified of the changed offer and shall again have forty,live (45) days 10 purchas. on Ihe altered
tenn.. Should DUNKIN' DONUTS not exerCise Ihis option, the lerms 01 Paragraph 10.C.2, and 10.C.3. (as applicable) shaD
appty 10 any transfer which may be conlemplated.
11. A. This Agreement does nol conslltute FRANCHISEE an agenl, legal representative, joinl venlurer, partner,
employee or servanl of DUNKIN' DONUTS Of its subsidiary lor any purpose whatsoever; and it Is deemed understood
belWf'en the parties hereto that FRANCHISEE shall be an Independent contradQt and is in no way authOnzod 10 make any
conltaCt, agreement, warranty or representatIOn on behall of DUNKIN' DONUTS or its subsidiary or 10 create any obligation,
'xPJess or implied, on bahal! 01 DUNKIN' DONUTS or lis subsidiary. The parttes agree thai this Agreement does not creata
a fldudary relationship between DUNKIN' DONUTS or Its subsidiary and FRANCHISEE.
11. e. Under no Circumstances shall DUNKIN' DONUTS or FRANCHISEE be liable for any ad, omission, debt or any
other obligation of Ihe other. Each party sha/! indemnify and ssv.lhe other harmleu against any.uch ctalm and the COlt
of defending againslsuch c1aima ansing directly or Indirectly from, or as a result aI, or in connection with, FRANCHISEE's
_ralion 01100 DUNKIN' DONUTS SHOP.
12. No failure 01 DUNKIN' DONUTS 10 ellerelSe any power reserved 10 il hereunder, or to insiSl upon strict compliance
by FRANCHISEE WIth any obligation or COndition hereunder, and no custom or practice ollh. parties in varianCe with the
lerms hereof, shaI1 constitute a waiver of DUNKIN' DONUTS' righlto demand strict compliance With the lerms h.reof, Waiver
by DUNKIN' DONUTS 01 any pllltlCUlar delaull by FRANCHISEE shall not affect or Impair DL;NKlN' DONUTS' right in respect
toanysubS8quent defaultolthe same orof a dlllerent naluro; nor shall any delay. waiver, torbearanceoromisllOn of DUNKIN'
DONUTS 10 exeros. any powor or nghts anSlng oul of any broach or default by FRANCHISEE 01 any of the terms. pfCMllons
or covenants hereof affect or impair DUNKIN' DONUTS' rights, nor shaU sucn constitute a waiver by DUNKIN' DONUTS at
any right hereunder or of the right to declar. any subsequenl breach or delault. Subsequent acceptance by DUNKIN'
DONUTS of the payments due 10 It hareunder shall nol be deemed 10 be a waiver by DUNKIN' DONUTS of any preceding
breech by FRANCHISEE 01 any lerms, covenanls or condlllons of Ihls Agreement. Acceptance by DUNKIN' DONUTS of
payments due it hereuncterfrom any person or entity other than FRANCHISEE shall be deemed to b. ICC8PIBnce Irom such
person or entJty as an agent of FRANCHISEE IInd not as recognition of such person or entity as an assignee or SUCCIUOl'
10 FRANCHISEE.
13. An notices hereunder by DUNKIN' DONUTS 10 FRANCHISEE shall al DUNKIN' DONUTS' option be personally
deliYered or..nt bylefecoplt1, or prepaid private couner, or certified maJI to:he FRANCHISEE at the address lellorthbelow
or al sUCh other address as FRANCHISEE may from time to tIme give notice at to DUNKIN' DONUTS. All noticeI hereunder
by FRANCHISEE 10 DUNKIN' DONUTS shol' be .onl by co""oed ,"",1'0 DUNKIN' DONUTS INCORPORATED, Po., Dfflco
eo. 317, Randolph, Massachusetts 02368, Attn: Sonior VICe Presidenl and General Counsel or at such olher addr811 as
DUNKIN' DONUTS may from lime to bme give notice of to FRANCHISEE.
To FRANCHISEE; w. John Chestnut. clo Dunkin' Donuts. 1186 HarrisburR Pike.
Carlisle. Pennsylvania 17013
14. A. This Agreement, and the documents relerred 10 hefe.n shall be the enbre, fun and complete aoreement between
DUNKIN' DONUTS and FRANCHISEE concerMlng thesubl8ct matter hereof, and supersedesa. prior agreements, no other
representallon having induced FRANCHISEE to execute this Agreemenl; and Iher. ate no representatIOns, inducements.
promises or agreements, oral or otherwise. between the parties not embodied herein. whICh 818 ot any force or eIItd with
reterence10lhisAgreamentoroltlerwise. No amendment, change or Variance IromlhilAgr.ement shall be bindingonerther
party unlesl .xecuted in wntrng,
14, e, The success at lhe buSiness venlure contemplated to be undertaken by FRANCHISEE by vb1ue at this
Agreemenlis Speculatrveand d.pends, to a large eldant, upon theabl~ly of FRANCHISEE as anlf1dependenl businessman,
as well 81 oth8f' radors. DUNKIN' DONUTS does not make any represenlations Of wananty III to the potentialllJCC8ll of
the bUSiness venlure contemplated hereby. FRANCHISEE acknowledgeSlhat It has .nlered Into this Agreement after
making an independonllovesbgabOn of DUNKIN" DONUTS' operlltlOns, and nol upon Bny representation al to protltswhlch
FRANCHISEE in parbCUlar mlgh1 be expected to roallze, nor has anyone mado any olher representation which IS not
oXPJelSty set forth h8f"81n. 10 Indueo FRANCHISEE 10 accePtlht, fronchlSO and ollcculo Ihls Agreement.
10
Tranll" on
Oooth
Right of Flllt
R,tuNI
Rllltlonlhlp 01
Plrtl..
Non-Walvlr
Notlcn
Entlre
Aa-'
IlDFA"'19O
.. .
DUNKIN' DONUTS INCORPORATED
FRANCHISE AGREEMENT
CONVl!RSION
This Agreement, dated AJ.Go~'" ~~ . 19.1L- is made by Bnd between DUNKIN' DONUTS
INCORPORATED, a Delaware corporation having liS pnnCipal place 01 bUSiness In Randolph, Malllchulln,
(hereinafter r,'erred to 8' .OUNKIN' DONUTS-), and the following mdlVldual1 or entity (hereinafter r",rr'd to
collectively 8S -FRANCHISEE-): CflESTNUT ENTERPRISES. tNC.. a Pennsylvania CorDorationa
and W, JOHN CHESTNUT' JOHN DOUGLAS CHESTNUT: and SHIRLEY H. CHESTNUT
DUNKIN' DONUTS. as the re.ult 01 the expenditure of time. effQr1 and money, has acquired experience and
skill in the development, opening and operaling 01 shops and distribution outlets invoMng the prOduction.
merchandising and sale 01 donuts and other felaled product. utiliZing a specially designed building or lacdity with
spedallydeveloped equipmenl, equipment layouts, inlenor and extenor accessories. Identification schemes, products,
manag.m.nt proorams, standards, distribution and d.II....ry methods, Specllications and proprietary marks and
InfarmaUon, all of which ar. ref.rred to In this Agreem.nt 81 the .CUNKlN' CONUTS SYSTEM:
CUNKIN' ~ONUTS has d.....loped and used and continues to use and control the usage of, In connection
with its bUliness and the business 01 its DUNKJN' OONUTS franchise.., c.rtain proprietary interelts, trademarks,
seMee marks and trade nam.s, including .OUNKIN' DONUTS., which is registered as a Itademark on the Principal
Register or the United Stales Patent Onic. (the .PROPRIETARY MARKS-), to identlfy lor the public the sourc. 01 goods
and servlc.s mark.ted ther.under and to r.presentlo Ihe public high and unllorm standards of qUality, cleanUnen,
appearance and SSMC.,
FRANCHISEE, being cognIzant of the distinctIve and valuable Significance to the public 01 all 01 the foregOing,
desires to make use 01 the trademark .OUNKIN' DONUTS., and 10 enloV the benefIts ollhat mark, the other
PROPRIETARY MARKS and tha DUNKIN' DONUTS SYSTEM.
FRANCHISEE undentands the importance 01 DUNKJN' DONUTS' high and umform standards of quality,
deanlinen, appearance and saMce 10 Ih. valu. 01 the DUNKIN' DONUTS SYSTEM and the necessity 01 opening and
op.raUng FRANCHISEE's CUNKIN' DONUTS SHOP In conlormlty with the DUNKIN' DONUTS SYSTEM and In
accordance with DUNKIN' DONUTS' standards and speCifications,
In recognition of all the above, Ihe parties agree as follows:
1. A. DUNKJN' DONUTS hereby grants to FRANCHISEE during the lerm hereof and FRANCHISEE accepts I
franchise to operate a donut shop ulllizing the OUNKJN' DONUTS SYSTEM in accordanc. with the terms, covenants
and conditions of this Agreement, at one location onlv, sItuated at
1186 HorrisburR Pike. Carlisle. Pennsylvania 17013
lNOI ~SlttM) ICtwor 'DoIt"1 ISUl'1 It.pCocltl
(the -DUNKIN' OONUTS SHOp. or the .SHOp.). The lerm of this Agreemenl shall eldend t I~;t. (ilIg) , I~~I 'ra,m 1~1
8a:U. II - Sllap ~~.!!. _ (_,,, II! __88 sl a s AI !J She" at II all, 81UlBi)Ii Ii i ll::ia !I_ON'" Ihl8, 1,8, until
AURUBt: 17. 2012. ,t:I'l'-l I '1 BHHlr, ThiS franchise includes the nghlto use, m connection
th.rewrth and at the agreed location, Ihe trademark .DUNKIN' DONUTS., along wllh other PROPRIETARY MARKS
owned and ulllized bV DUNKJN' DONUTS In connection WIth other DUNKIN' DONUTS shops, and the right to us. the
DUNKIN' DONUTS SYSTEM Includmg confidential and valuable inlormatlon which now eXist. or may be acquired
h.reafter and set forth in DUNKIN' DONUTS' operating manuals or otherwise disclosed to DUNKIN' DONUTS
'ranch/sees,
1, a, For a new DUNKIN' DONUTS SHOP where the location is to be developed by FRANCHISEE, this franchise
is granted to FRANCHISEE sublect 10 land shall become enectlVe only upon compliance With) the terms, covenants,
and conditions of the DUNKIN' DONUTS FRANCHISE OWNER DEVELOPMENT AGREEMENT executed concurrenUv
h.,ewith by DUNKIN' DONUTS and FRANCHISEE.
1, C, This Agreement shall aUlomaticallv expire upon the earlier expiration 01 any leas. relating 10 the
FRANCHISEE'. occupancy 01 the DUNKIN' DONUTS SHOP.
1. 0, FRANCHISEE and all partners and shareholders 01 FRANCHISEE represent and warrant to DUNKJN'
DONUTS that each Individual is a United Slatea citizen or a lawful resIdent alien of Ihe United Stales, Ihat each
corporation is and shall remain duly organized and in good sian ding dunng the term 01 this Agreement, and that all
financial and other information which FRANCHISEE has provided to DUNKIN' DONUTS in connection with
FRANCHISEE', application lor this DUNKiN DONUTS Iranchise is true and accurate,
2. DUNKIN' DONUTS ag,...:
reuo s (il to acquire control ot the real estate lor the lenn of this Agreement, and (ii) to ca KIN'
DONUTS SHOP the constructed, Subject to the regulalions of all governmental aYing Jurisdiction,
and to thereupon le8le the 0 'NUTS SHOP either dlrectlV or thro Sldiary to FRANCHISEE, In the
....ent DUNKIN' OONUTS i. unable 10 lease KIN' DONU 0 FRANCHISEE, FRANCHISEE .hall h.....
the opUon to terminate this Agr.ement and oblain a r INITIAL FRANCHISE FEE paid 10 DUNKIN' DONUTS
or to accept a substitute kJeabon shoul roposed 10 FR b DUNKIN' DONUTS:
2, B. For a new ONUTS SHOP where the tocatlon is 10 be develope CHISEE, to approve
the Ioca . ets Ihe standards emploved by DUNKIN' CONUTS In selecting other lOca~ons .: and to
2. C, To make avallabl.the speCl'ications and/or requiremenls for the equipment to be utiliZed in the DUNKIN'
DONUTS SHOP:
2, 0, To make avaIlable to FRANCHISEE and FRANCHISEE's deslgnatod represenlatl"'o, prior to tho opening of
Ihe DUNKIN' DONUTS SHOP, a training program at the DUNKIN' DONUTS Unl...ersltv Corporale Training Center tDDU)
tMth respect to the operation 0' the DUNKIN' DONUTS SYSTEM;
Thl. PC ..1H.L
Related PC',:
PROD.
SAT.
EDA
OTHER_
CARLISLE, PA
Plnlll
Introduction
Grlnt o' the
Franchi..
ur
,,:l}
I"
F'
iD
Inltlll SeNlc..
Fumlshed by
DUNKIN'
DONUTS
jO
2, E. To proVide operating procedurel to aslilt FRANCHISEE in complying With DUNKIN' DONUTS' ltandard
m.thOdI 01 record keeping, coni roll, staffing and IUlInlng reqUltement., and production methods, and in develOping
approved lource. 01 supply;
2, F, To make available 10 FRANCHISEE alllltance, based on the experience and judgmenl 01 DUNKIN'
DONUTS, in the preopentng, opening and initial operation 01 the DUNKIN' DONUTS SHOP and 'n conforming to lhe
requirements at the DUNKIN' DONUTS SYSTEM; and
2, G. To prepare and coordinalethe Grand Opening Promotional Advertlling Program lor luch olher advertlsing
program al DUNKIN' DONUTS may specify) for the iOllJaI open.ng 01 the DUNKIN' DONUTS SHOP.
3. DUNKIN' DONUTS ogree.:
3, A. To maintain a continuing adViSOry relationship With FRANCHISEE, including consultation In the arlal 01
marketing, m.rchandising and general business operallons;
3. B. To provide operating manuals 10 FRANCHISEE, which contain the standards, specllications, procedures
and teChniques of the OUNKlN' DDNUTS SYSTEM, and to revise, from time to lime, the content 01 the manuals to
incorporate new developmentl regarding standards, speciflCDtions, procedures and techniques.
3, C. To continue.ts efforts to malntalO high and Uniform standards of quality, cleanliness, appearance and selVlce
at all DUNKIN' DONUTS ShOps, thus protecting and enhanCing (he reputatIon of DUNKIN' DONUTS and the demand
for the products 01 the DUNKIN' DONUTS SYSTEM and, to that end, to make re..onable efforts to disseminate III
standards and Ipeclllcations to potential suppliers 01 FRANCHISEE upon the wrinen request of FRANCHISEE;
3. D, To review for approval all proposed advertising and promotJonal materials relating to FRANCHISEE's
OUNKlN' DONUTS operations prepared by FRANCHISEE for use in tocal advertising; and
3. E, To administer The DUNKIN' DONUTS Franchise Owners Advertising and Sales Promotion Fund (the "Fund")
and to direct the development of all advertIsing and promotional programs. Onl.fifth of FRANCHISEE', 5% advertising
contribution (1% 01 the GROSS SALES of 1he SHOP) will be utilized, at the discretion 0' DUNKIN' DONUTS, to prcMdl
for the administrative expenses 01 the Fund and lor programs designed 10 increase sales and enhance and further
develop the pUblic reputation and image of DUNKIN' DONUTS and the DUNKIN' DONUTS SYSTEM. The balance,
including any interesteamed by the Fund, will be used for advertising and related expenses. Conlributions to the Fund
in e.cess 01 5% of GROSS SALES shall be used in accordance WIth the programs to which thev relate. The content
of all advertiSing, as well as the media in which the advertising is to be placed and the advertising area, shall be at the
discretion of DUNKIN' DONUTS. Upon request, DUNKIN' DONUTS Will prOVide FRANCHiSEE 8 statemenl of receipts
and disbursements of the Fund, prepared by an independent certified public accountant, for each fiscal year of thl
Fund.
4. FRANCHISEE ogre..:
Continuing
Slrvlc..
Furnlahtd by
OUNKIN'
DONUTS
,
to DUNKIN' DONUTS Dollars IS
represe thelNITtALFRANCHISE FEE, payable 8S follows: Five Thousand Dollars (55,000.001 upon th &Culion
of this Agree t; Ten Thousand Dollars IS 10,000,001 upon execution of the LEASE OF DUNKIN' 00 SHOP and
the remaining un balance pnor to anendance by FRANCHISEE or FRANCHISEE's designa representative at
the DUNKIN' DON aining course or thirty 130) days prior to the scheduled opening e DUNKlN' DONUTS
SHOP. whichever dale IS ler.
4. B. For a new DUNKIN' D
pay to DUNKIN' DONUTS
senting the INITIAL FRANCHISE FEE, pa e as follOWl: Four Thou
this Agra.men1; and the remaining unpaid ba e upon wnnen
IQCllUon tor the DUNKIN' DONUTS SHOP. IlIho DU ' DON
fifteen (15) months from the date 01 lhis Agreement, the
INITlAL FRANCHISE FEE, which shall be payable 10 D
10 terminate this Agreement.
4. C, At any time prior to the time I e second payment r&quI under the terms of Paragraphs4A or 4.B
of this Agreement becomes due, FRA ISEE mav. by written nolice, termin hilAgteemen1.ln that event, DUNKIN'
DONUTS will return the initial inst ent paid upon execution of Ihis Agreement, I
(52,000.001 to compensate KIN' DONUTS for assistance rendered to FRANC
Franchise fees are not rwise refundable.
4. D. FRA SEE shall pay to the Fund Three Thousand Dollars ($3,000.00), which shall
thl DUNKI' NUTS SHOP commences operation, tor a Grand Opening Promotional Advertising
othlr a i1islng program as DUNKIN' DONUTS may specify). Payment shall be made in lull prior to 8n
F HISEE or FRANCHISEE's designated re~resentatlv8 at the DUNKIN' DONU~S training course or thirty (
4, E, FRANCHISEE shall pay to DUNKIN' DONUTS al Post Oltiee Bo. 294, Randolph, Masllchusens 02368 (or Continuing
such olher addre.. as DUNKIN' DONUTS shall from time to time glvelo FRANCHISEE In wnling), on or before Thursday Fl'llnchl.. F...
01 each week, a .um equal to four and nIne tenths percent (4.9%) 01 the GROSS SALES oltha DUNKIN' DONUTS SHOP
IOf the seven (7) day periOd ending at the close of bu.iness on the preCeding Salurday, The term "GROSS SALES"
In this Agreement shalllnctude all sales made by FRANCHiSeE pursuanlto this Agreement, but ahall notlnc!ude the
lIIe at cigarettes. sales taxes or similar taxll.
4. F, FRANCHISEE shall pay to the Fund at the same lime, for the same seven (7) day period, In the aame manner Advertising
as, and In addition to, the payments provided for under Paragraph 4.E. ollhis Agreement. 5% of the GROSS SALES
01 the DUNKIN' DONUTS SHOP (exc!uding wholesale sales to accounts approved in writing, in advance, by DUNKIN'
DONUTS) . In addition, FRANCHISEE shall participate In and make addlllonal payments to the Fund With respect to
all advertising, marketing and other DUNKIN' DONUTS prOQrams which from lime to time ar. suPPOrted by. majority
of producing DUNKIN' DONUTS SHOPS In the market in which the DUNKIN' DONUTS SHOP Is located with respect
to local programs. and in the Continental United States, With respect to national programs. DUNKIN' DONUTS res.,...tI
the right In tis SOle and absolute discretion to designate or change the composl1ion of shop, 'nduded In thl bue for
purposesofdeterminmg a ma,ooty. FRANCHISEE shall have complete discretIOn as tothe prices he charOIl forproduct
saki In the DUNKIN' DONUTS SHOP. NOlhing herein shall be construed to require FRANCHISEE to estat)ti,h pnces
in accordance wllh programs supported by the malOrity of shops.
PAYMENTS:
Initial Franchls,
FH
~
r:;'
,.
R,fundl r{1"
Orand Opening
2
5. FRANCHISEE undefll8nds and ~CIw1e~geSlh8t every del all 01 the DUNKIN' DO. SYSTEM i, importanl
10 DUNKIN' DONUTS. to FRANCHISEE and to othe, DUNKIN' DONUTS franchllees In orde' to develop and malntatn
high ana unllorm 'tandardl 01 quahty. cleanliness. appe.rance, leNlce, leclllllel, products and technlC~ue'lo incre...
the demand fo, DUNKIN' DONUTS products and 10 prolecl and enhance Ihe reputetlon and goodwill 01 DUNKIN'
DONUTS. Accordmgly, FRANCHISEE aorllS 10: devole lull tIme, energy and eHortlo the management and operation
ofthl DUNKIN' DONUTS SHOP; obtain Irom DUNKIN' DONUTS prior wrlnen approval 01 aU wholesal. accounls; un
belt '''orb to maJum'18salea of the DUNKIN' DONUTS SHOP; ensure accurale reponing of GROSS SALES 10 DUNKIN'
DONUTS; and Implemenl all procedure' recommended by DUNKIN' DONUTS to mmlmlze employee theft
FRANCHISEE lunher agrellthot emplovee theflshaU not reheve FRANCHISEE 01 the obligation 10 make all payments
10 DUNKIN' DONUTS baled on GROSS SALES pursuant 10 Paragraph 4. 01 thIs Agreement and that accurate reporting
0' GROSS SALES Includes Mgmg all sales 10 the cash register 81lhe time th, prOduct is delivered to th, purChaser
Including wlthoullimllaUon retail, wholesale, bulk discount I8les and salll lor whIch payment may be d.lerred,
FRANCHISEE also agree.:
5, A. To use all mat, rials, lOgredients, supplies, paper gOOds, unllorms. lixlures. furnishings, sIgn., equipment.
methods of exterior and i"I.,.o' design and constrUCllon and methOds 01 prOduct preparation and delivery pr'lCnbed
by or which conlorm With DUNKIN' DONUTS' slandard. and speclllcations and to carry outlhe busineaa covered bV
this Agreement I" accordance With the operatIonal .tandardaand .pecdicalfons eatablished by DUNKIN' DONUTS and
III forth in DUNKIN' DONUTS' operating manuals and olhe, documents as they presently exist or shall exist in the future
or as may bl othetwlse disclosed to DUNKIN' DONUTS' Iranchisees Irom Ume to lime,
5, B. To refrain from uSIMg or selling any products, materials, ingredients, supplies, pap,r gOOds, unIforms,
f1xtur.., furnishing.. Signs, equipmenl and methods of p,oducl preparation, merchandiSing, and delivery which do not
meet DUNKIN' DONUTS' standards and sp8Clficalionl.
5. C. To offer lor Sale only such prOduct. ai shall be e.pressly approved far Sale at the DUNKIN DONUTS SHOP
In wrttlng In advance by DUNKIN' DONUTS and to otler lor sal. all prOducts thai have been designated ..apP'OVed
bV DUNKIN' DONUTS.
5, O. To maintain al all times a sufficient supply of approved prOducts.
5. E, To purchase all food producls, supphel, equIpment and malenals required for the operation of th, DUNKIN'
DONUTS SHOP from suppliers who demonstrale, to the reasonable lahstactlon 01 DUNKIN' DONUTS. the abUity to
milt all of DUNKIN' DONUTS' slandards and specdlcahons for such Ilems; who polless adequale capaetty and
facilities to suppty FRANCHISEE'S needs in the quantities. at the times and With the ,ehablhty requislle to an effident
operaUon and who have b.en app'oved, In wrIting, by DUNKIN' DONUTS. Prior to purchasing any items from any
supplier not preYtOully approved by DUNKIN' DONUTS. FRANCHISEE shall Submit to DUNKJN' DONUTS a won,n
requ..t fa, approval of th, supplier. DUNKIN' DONUTS may require Ihat lampl8llrom th, suppiler b, dellvlred 10
DUNKIN' DONUTS or to a deslgna:ed Independent tesllng laboralory fo' tesllng pnor to approval and use. A chalgl
not to Ixce~ the actual cosl of Ihe test shall be made by DUNKIN' DONUTS and shall be paid by FRANCHISEE:
provided, however. the cost of the Ilral tesl requelled by FRANCHISEE In any calendar yea, shall be borne by DUNKIN'
DONUTS.
5. F. To maintam, at FRANCHISEE', .xpense, at all times,lhe Interior and e.terior 01 the DUNKIN' DONUTS SHOP
and all fixtures, lurnllhlngl,slgns and equipment in the highest degree of cleanhne... orderliness, sanitation and repair,
81 reasonably ,equired by DUNKIN' DONUTS, and to make no malerlal alteration, addition. replacement Of
Improvement In, or to, the Interior or eldenOl (including the parking 101 and landscaped areas) 01 the DUNKIN' DONUTS
SHOP without the prior wnnen consent of DUNKIN' DONUTS.
5. G. To manage the DUNKIN' DONUTS SHOP at all lIme. with at least two (2) Individuals. one of whom must
be the FRANCHISEE or partner or shareholder ot FRANCHISEE. Both Individuals must have succ.lIfuUy completed
the DUNKIN' DONUTS training program at DOU. Both Individuals mUlt havelileracy and fluency In the English language
.umcienl, In thl good faith opinion of DUNKIN' DONUTS, to salisfactonly complete training at DOU and 10 communlClte
with employees. customer.. and suppliers 01 DUNKIN' DONUTS. In the event FRANCHISEE apPUII for and r&Catv..
approvaJ to develOp or purcha.e an additional DUNKJN' DONUTS shop, DUNKIN' DONUTS ,equires that the additional
shop be managed by at lealt one DDU trained Individual approved by DUNKIN' DONUTS.
5. O. t. To ensure that all employee. are trained in acco,dance with DUNKIN' DONUTS In-shop tral"'ng
p,ocedure.. Also, FRANCHISEE shall ensure that the manager and all employees whose dutle. Include customer
I8Mce hav,sufficlent fluency In the English Janguage to adequalely meet the public In the DUNKJN' DONUTS SHOP.
5. 0.2. To anenet and to require those employed in the DUNKIN' DONUTS SHOP to anend suCh further It&tnlng
as DUNKIN' DONUTS shall Irom time to time reasonably require,
5. 0.3, To pay the cosl of training materials. salaries, accommodations and lravel exp.n.... if any. of FRAN-
CHiSee or any olhor individual omployed in 'ho DUNKIN' DONUTS SHOP. FRANCHiSee wHl also beor 'ho COil olin-
shop training p'ograms, The cosl of p,esenting the OOU training program Will be borne by DUNKIN' DONUTS.
5, H. To keep full, complele and accurale books Bnd accounlsln accordance with generally accepled accounting
principles and In the form and manner preSCribed below or as may be further p,escribed by DUNKIN' DONUTS from
time 10 time.
5. H.1. To lubmll to DUNKIN' DONUTS. on or before Thurlday of each week. on an approved rorm. a signed
statemenl 0' GROSS SALES lor the seven (7) day pined ending at the close of bUllneil on the preceding Saturday
along With all moniel required to be paId under ParagraphS 4.E. and 4.F. of this Agreement.
5, H,2. To submil to DUNKIN' DONUTS. on 0' b,fore the twentIeth (20th) day of eaCh month, on an apProved
form, a profit and loll statement of Ihe DUNKIN' DONUTS SHOP lor the preceding cal,ndar 0' fiscal month prepared
In accordance With generally accepted accounting principles.
5, H.3. To submil to DUNKIN' DONUTS. Within thlfty (30) days aftlr the dose of each sbe (8) momh period.
commencmg With the opening of the DUNKIN' DONUTS SHOP, on an approved Iorm. a prof.. and Iou ltattment lor
the Ii. (6) month pened and a balance sheet (including a statement of retained earnings or partnlt1hlp account) u
of the end of the penOd. AnnUal finanClalS18lemenl. must b~ by an Independent certified pubfic Iccountant
or suCh other Indep,ndent public accountant as may be acceptable to DUNKIN' DONUTS.
5. H.4. To submit to DUNKIN' DONUTS such other penodlC lorms and reports u may be prescnbtd and at th,
Um" ",o.ehbed by DUNKIN' DONUTS.
COVENANTS
OF THE
FRANCHISEE:
Shop
M,lntenanc,
Stamng Ind
Trllnlng
TrainIng
ealt'
Rooul Record.
Ind Rlporto
.prepared
~
3
~. H.e. To preserve tor a period 01 noll.llthaR three (3) ye.,. dunng Ihe term of this Agreement and lor not I".
than three (31 ve.r,'ollowing the term ollhll A;188menl, in the English language. aU accounting records and supporting
documents r,lallng to the FRANCHISEE', operallons under Ihl' Agreement. or any lea'8 WIth OUNKlN' DONUTS or
It, subsidiary, includmg but nollimlled 10:
a. daily cash reports;
b. cash receipts jOurnal and generalledoer;
c, cash disburaemenls journal and weekly payroll register;
d. monthly bank .tatemenls, and dally depoSit slips and canceled checks;
e. all tu relurns;
f. supplier', inVOices (paid and unpaid);
g. dated cash reg'lte, tapes (detailed and summary);
h. semi-annum balance sheell Bnd monthly prohl and 10sI statements:
I. daily production, throwawaV and linishlng records and weeklv inventOries;
j. records 01 promotion and coupon ,edemptlons;
k. records 01 all wholesale accounts (ptlor wlltten approval of wholesale accounts bV DUNKIN' DONUTS Is
required); and
I. such olher records as DUNKIN' DONUTS ",av Irom lime to lime request.
5. I. FRANCHISEE shall record all sales on 8 cash register, the make, model and senal number 01 which has been
lndivIdually approved in Wfl!lng bV DUNKIN' DONUTS; such cash regIster shaD contain a device that WIll record accumulated
salel and cannot be tumed back or reset, and a back.up power syslem tor memory storage in the event of power loss.
5. J. FRANCHISEE shall procure, belore the commencement 01 bUsiness, and maintain in lull lorce and ellect
during the entire term of this Agreement, al FRANCHISEE's sole 'lIpense, an insurance policy or policies protecting
the FRANCHISEE and DUNKIN' DONUTS, and their directors and employees, agalOlt any loss, liability or expenle
whatsoever from, WIthout limitation, lire, personal injury, the", death, property damage or otherwtse, arising or occurring
upon or in connection with the DUNKIN' DONUTS SHOP or by reason of FRANCHISEE's operation or occupancy of
the DUNKIN' DONUTS SHOP. Such policy or pOhCies shall inctude comprehensive generalliabihty Insurance, induding
but not limited to, prOduCt. contractual, and owned and non.owned vehicle liability coverages, with a single limit alone
million dollars ($ 1,OOO,OOO) (or such higher limit as DUNKIN' DONUTS, in lIS lole and absolute discrellon, may from
time to time requile, and as may be reqUIred under the terms of any lease lor the DUNKIN' DONUTS SHOPllor bOdily
injury and property damage combined, ~A11 Risk" property damage insurance. " .J_oJ . 1# " Ii !._Illal!. !lull a !I
.!._ II ...d .. 11111 lA, for the lull replacement cost valulot Ihe DUNKIN' DONUTS SHOP and the conlents thereof,
plate glass Insurance ....d L.vL ! 1 II, if applicable, and such statutory insurance es may be required in the state
in which the DUNKIN' DONUTS SHOP Is located. All insurance afforded by the policies required under the terms at
this Paragraph shall:
1. Be written in Ihe names 01 FRANCHISEE, DUNKIN' DONUTS, and any other parties as directed by DUNKlN'
DONUTS, as their respecuve interest may appear;
2. Be wlltten by Insurance companies acceptable to DUNKIN' DONUTS;
3, Contain prOViSions denying to the insurer acquiSition by subrogation of righls of recovery against any party
named;
4. Contain the provision that cancellation or alteration cannol be made withoutallealt thirty (30) days wntten
notice to any party named; and
5. Not be Iimlled in any way by reason of any insurance which may be maintained by DUNKIN' DONUTS or
any party named.
During the term ot this Agreement, FRANCHISEE shall promptly (but In no event later than ten (10) days after any
such policy becomes effective or such payment is due) lurnish DUNKIN' DONUTS with duplicate originals 01 all
Insurance pollCies,lnduding renewal and replacement policies, together With evidence that the premiums therelorh""e
been paid. If at any time FRANCHISEE lails to comply With the provisions of this Paragraph 5.J., DUNKIN' DONUTS,
In addition to all other remedies available, shall have the option (but shall not be required) to obtain such Insurance
with respect to the DUNKIN' DONUTS SHOP, and keep the same in eflect. FRANCHISEE shall thereupon pay DUNKIN'
DONUTS when and as billed lor the costs 01 the premiums there'or. Maintenance 01 Insurance and the performance
by FRANCHISEE of the obligatiOnS under this Paragraph shall not relieve FRANCHISEE of liability under lhelndemnity
proviSions set forth in thil Agreement.
5. K. It all conditions precedenlto the opening of the DUNKIN' DONUTS SHOP have been satisfied. FRANCHISEE
shall prompdy open the DUNKIN' DONUTS SHOP to the general publiC as soon as constluctlon and equipping the
DUNKIN' DONUTS SHOP are substantially complete. FRANCHISEE shall thereafter keep the DUNKIN' DONUTS SHOP
open and In normal operation 24 hours a day on all days ellcept Christmas and ThanksgIVing unless prior written
approval is obtained Irom DUNKIN' DONUTS or unless DUNKIN' DONUTS othefW1S8 directs in writing. FRANCHISEE
shalloperate the DUNKIN' DONUTS SHOP so 8S to maximiZe GROSS SALES and maintain all standards at the DUNKIN'
DONUTS SYSTEM.
5. L FRANCHISEE shall submit all advertiSing and promotional malerials propared lor use In loc:ai areas 10
DUNKIN' DONUTS pnor to use. In the event wllnen disapproval of the advenlslOg and promotional materiatls not
receiVed by FRANCHISEE from DUNKIN' DONUTS within 'Ifteen 115) days from the date 'uch matarial is received by
DUNKIN' DONUTS, said materials shall be deemed epproved unless and until subsequentlv disapproved.
5. M. In the event DUNKIN' DONUTS develops a new shop and leases the DUNKIN' DONUTS SHOP to
FRANCHISEE, FRANCHISEE agrees to enler into a LEASE OF DUNKIN' DONUTS SHOP with, at DUNKIN' DONUTS'
option, DUNKIN' DONUTS or its rental subSidiary. FRANCHISEE ,ecognizes lhat, in the event DUNKIN' DONUTS or
its subSidiary lesses the DUNKIN' DONUTS SHOP 10 FRANCHISEE, rent payable under the lease Willlnctud. additional
compensation to DUNKIN' DONUTS or ils subsidiary lor the acquisition, by purchase or lease, or otherwise, 01 the
DUNKIN' DONUTS SHOP. In the event, during the term of this Agreement or any extension thereof, FRANCHISEE
directly or indirectly acquires owne"hip or control of Ihe property, FRANCHISEE also agrees to grant to DUNKIN'
DONUTS. under Its ltandard lEASE OPTION AGREEMENT. the option 10 acquire the location In the event of default
by FRANCHISEE under this Agreemenl or In the evenl 01 FRANCHISEE'S delault under any lease or mongage relating
to the premises.
.
R.glsters
Ins urine.
*new or used
uiJ
Conllnuous
Oplflllon
Advertising
ApprovII
Complny"
D_loped
Rill Esllit.
5, N. For. new DUNKIN' DONUTS SHOP ""here tnelocallon II to be developed by FfV. ., ~HISEE, FRANCHISEE
agrees 10 develop Ine DUNKIN' DONUTS SHOP In Decordance wllh planl, IPecllicllIonl, documenlallon and
procedurelapproved In wrlllng bV DUNKIN' DONUTS; to purcnase and Inllallln Ine DUNKIN' DONUTS SHOP lilturlS,
turnilningl, equlpmenl, Ilgns and mul8rlulsfrom supplior' wnlch have been approved by DUNKIN' DONUTS; to cause
Ihe OUNION' DONUTS SHOP 10 open 10 Ihe public Within Meen t t 5) monlhs Irom Ihe dale 01 tnls Agreement, and to
grant 10 DUNKIN' DONUTS Ihe opllon to acquIre Ihe location .n Ihe ev.,nt of default by FRANCHISEE under Ihil
Agreement or In the event 01 FRANCHISEE'S detault under any leaae or mongag. rel.ling to Ihe premise..
FRANCHISEE Illao agre8S 10 execute, concuffenlly With the elocutIon of Ihls Agreement, but betore permltllng
construction 10 begin on Ihe OUNKIN' DONUTS SHOP, DUNKIN' DONUTS' FRANCHISE OWNER DEVELOPMENT
AGREEMENT and DUNKIN' DONUTS' lEASE OPTION AGREEMENT (Wllh anachments) duly elecuted In recordable
lorm by FRANCHISEE and the landowner of lhe premises.
5. O. FRANCHISEE agrees 10 renovale and remodel the Inlenor and elletlor 01 the DUNKIN' DONUTS SHOP
(Including but not Ilmllod to 1.llures, furnlshmgs, signs and equlpmenl) no laler Ihan Ihe lenlh (10th) anniversary ollhe
, 10 Ihe Ihen cunent deSIgn for ShOps of comparable age and
condition. The nalure and scope 01 renovation and rem eling shall be as then generally reqUired by DUNKIN' DONUTS
lor shops 01 comparable age and condlhon. (late of this Agreement
5. P. In the evenl FRANCHISEE. or any partner or sharehOlder Ihereot, holds any Inlerestln a DUNKIN' DONUTS
franchise other Ihan the OUNKIN' DONUTS SHOP, FRANCHISEE and Ihe panners and shareholders 01 FRANCHISEE
who own an Intereslm any other IranChISe!S) agree to execule concurrenlly wlIh thiS Agreement DUNKIN' DONUTS'
AGREEMENT OF CROSS.GUARANTEE to DUNKIN' DONUTS for Ihe paY'Tl8nt of tees, renls and olher Obligations for
each franchise in which FRANCHISEE or any panner or shareholder thereof holds or acquires any inlerest.
5, a. FRANCHISEE agrees 10 comply promplly wllh all applicable laws, rules, reglllations, ordinances and orders
0' public authonlles inCluding, but not limited to. Government AgenCies, Board 01 Fi,e Underwriters and other similar
organizations. The term "Government AgenCies- shall Include Wilhout limitatIon aU governmental units, however
deslgnated, which eddre" heallh, satetyisanllatlon, enVIronmental or other issues affecting operations ollhe DUNKIN'
DONUTS SHOP.
5. R. FRANCHISEE agrees 10 submll to DUNKIN' DONUTS prompUV upon ,ecelpt thereof, copies of all customer
complaints and notices and communications from Government Agencle, and hereby aulhorizes Government Agendes
to prOVide directly to DUNKIN' DONUTS caples 01 all such notices and communicalions.
5. S. FRANCHISEE agrees to enler into Ihls Agreement and Ihe variOUS olher agreements wilh DUNKIN' DONUTS
as an individual, individuals, general pannership or corporation prOVided Ihat all indIViduals, general pannera, officers,
shar.holders and directors (II a corporaliOn) Will be required 10 personally guarantee full payment and performance
01 FRANCHISEE'S money and other obligallons under Ihis Agreement and any lease for the premises wllh DUNKIN'
DONUTS or its subsidiary.
5, S.l. If FRANCHISEE Is a corporation, said corporation must be in compliance wilh Ihe requiremenls applicable
to COfporaticns set tanh in paragraph 10.C. hereof:
5, 5.2. FRANCHISEE may not be a limited pannership, trusl or other enrlty not specifically aulhortzed herein.
8. A. In order to preserve the validity and Integrity of the PROPRIETARY MARKS and to assure that the standards
and speCifications of Ihe DUNKIN' DONUTS SYSTEM 81e property employed in the operation of the DUNKIN' DONUTS
SHOP, DUNKIN' DONUTS, or ils agents, shall have Ihe nght, at aU limes, to enler and Inspect the DUNKIN' DONUTS
SHOP and the right to select malerlals, ingredients, products, supplies, paper gOOds, Uniforms, fixlures, furnishings.
ligns and equipment for evalualion purposes 10 assure thatlhese ilems conlorm to the standards and speciliCations
01 the DUNKIN' DONUTS SYSTEM. DUNKIN' DONUTS may require FRANCHISEE to remove eny Ilem which does not
conform with applicable standards and specllicalions. DUNKIN' DONUTS may remove or destroy at FRANCHISEE's
expense any Ilem which does nol conform to applicable standards and specifications.
8. B. If, within twenty.lour (24) hours following wllnen notice by DUNKIN' DONUTS requesting the correction 01
an unhealthy, unsanitary or unclean condlllon, or Within thirty (30) days following wrinen notice by DUNKIN' DONUTS
requesting repairs, alterations or painling of the DUNKIN' DONUTS SHOP, FRANCHISEE has not corrected the
condition or completed the repairs, alterallons or painting, DUNKIN' DONUTS may. Without being guilty of, or liable
tor. trespass or tort and Without prejudice to any other rights or remedies, enter the DUNKIN' DONUTS SHOP and cause
the repairs, allerations or painting 10 be completed. or lhe condition 10 be corrected, at Ihe elpense of FRANCHISEE,
6, C, DUNKIN' DONUTS' represenlatlves shall have the nght to examine FRANCHISEE's anginal books, records
and supporting documenls at reasonable times and to perlorm such tests and analyses as it deems approprtalelo venfy
GROSS SALES. II an examinalion reveals tnat Ihe GROSS SALES reponed by FRANCHISEE to DUNKIN' DONUTS are
lell than the GROSS SALES ascenained by the examination, Ihen FRANCHISEE Shall immediately pay to DUNKIN'
DONUTS any amounls owing to DUNKIN' DONUTS and Ihe Fund and DUNKIN' DONUTS' renlallubsidlary based upon
the corrected GROSS SALES, All examinations shall be 01 the expense of DUNKIN' CONUTS; however, if an examination
resutts from FRANCHISEE's failure to prepare, deliver or preserve slalemenls or records required by Paragraph S.H.
of Ihis Agreement, or results in the discovery 01 a discrepancy in the GROSS SALES reponed by FRANCHISEE,
FRANCHISEE shall pay, or reimburse DUNKIN' DONUTS lor any and all elpenses connected WIth the exammation.
Induding, but not limited la, reasonable accounting and legal fees, Ihe unpaid amounls owed to OUNKIN' DONUTS.
its rental subsidiary and Ihe Fund, Bnd interest thereon from the dale payment was due at 18% per annum>)r the highesl
permissible rate. Such payments Will be wllhout preludice to any other remedIes CUNKIN' DONUTS may have under
this Agreement. Including the right to terminate. wllhout opponunlty to cure, in the case of intentional underreponing
01 GROSS SALES,
8, D. FRANCHISEE and IllI pannets and shareholders of FRANCHISEE shall, upon the request of DUNKIN'
DONUTS In connection with the examination of FRANCHISEE's books and records under Paragraph 8.C, 01 \his
Agreement, pfOVlde DUNKIN' DONUTS' represenlatlves wilh porsonallederal and state tax relurns, bank statements
(induding deposlI slips and cancelled checks) and such other documenls and information as DUNKIN' DONUTS may
in Its sole discretlon request in connectlon Wllh DUNKIN' DONUTS' effons to ven,.,. GROSS SALES reponed 10 DUNKIN'
DONUTS under this Agreemenl or any lEASE OF DUNKIN' DONUTS SHOP. Personal lax: relurns and finanCial dam
unrelated to Ihe franchise busmess need not be prOVIded by any partner or shareholder 01 FRANCHISEE who has not
been active in Ihe business and, in addition, has not directly or indirectly owned or controlled at least a majority Interesl
In the franchise or any LEASE OF DUNKIN' DONUTS SHOP, alone or In cOnjunction WIth any olher family member or
rellted enllty,
8, E, FRANCHISEE hereby granls DUNKIN' DONUTS Ihe irrevocable rtghllO inspect the records of a1lsuppli'fI,
dlstrtbulors, group purchasmg programs, distribution centers, and other third parties supplYIng fooj products,suppties,
equipMent and mateftalsto FRANCHISEE and hereby Irrevocably authorizes such panles 10 release such records to
DUNKlN' DONUTS,
Fr.nchl....
D,v,loped
R..I Elllt.
R,mod.1
IjJ
CompllJlnc. wllh
Regul.tlon.
Perlon.1
Gu.r.nt..,
C.I1.ln Right.
01 DUNKIN'
DONUTS
.,
5
7. A, FRANCHisee acknowledges that MDUNKlN' DONUTSM iSB feglll'red 'rademark, thai laid mark hal been
and il being used bV DUNKIN' DONUTS and bV ils IranChll881 and licensees, lhal laid mark, togelher wllh the othef
PROPRIcITAAY MARKS, presently ownt'd by DUNKIN' DONUTS or whiCh may be acqUIred In the futur., constllutes
~ 01 the DUNKIN' DONUTS SYSTEM and lhat valuable goodwill is assOClaled wllh and anached 10 aald mark and
the oth.r PROPRIETARY MARKS. FRANCHISEE agrees 10 use SBld mark and lhe ~Ih., PROPRIETARY MARKS only
in the manner and to the exlenl SpecIfically licensed by Ihls Agreement. FRANCHISEE funher agrees that any
unauthOfized use Of continued use alter the termination of this ~r..ment shall constilute irreparable harm lubject 10
InjunctiVe flliel.
7, A.I. FRANCHISEE underslands thai FRANCHISEE's license to use any or all of Ihe PROPRIETARY MARKS
II non.elduslY. and relates solely to the location set forth in Paragraph 1.A. ollhis Agreement FRANCHISEE funher
acknowledges that DUNKIN' OONUTS, in Its sole discretion, has Ihe fight to operate Of franchise other DUNKIN'
DONUTS SHOPS and sales oullets under, and to grant olher hcenses in, and 10, anvor all oUhe PROPRIETARY MARKS,
In each case at such locatlonl and on Such lerms and condItions as DUNKIN' OONUTS deems acceptable,
7, A.2. FRANCHISEE agrees that, during the term ofthisAgreemenland alter the elpiratlon or termination thereo',
FRANCHISEE shall not dl1ectly or indireclly contest or aid in conleStlMg the Validity or ownership of the PROPRIETARY
MARKS.
7. A.3, FRANCHISEE agrees 10 nOhfy DUNKIN' DONUTS promptly 01 any litigation Instituted by FRANCHISEE,
or by anV perlon, firm Of carperahon against FRANCHISEE. relating to Ihe PROPRIETARY MARKS,ln the event DUNKIN'
DONUTS undertakes the delenae or prosecution at any luch hligallan, FRANCHISEE agrees to elecule any and all
documents and do luch actl and thingl as may, in the opinion at counsel for DUNKIN' DONUTS, be necessary to cany
out such delense or prosecution.
7. 8, It II elpressly recognized that any and all gOOdwill associaled With the PROPRIETARY MARKS, Including
any goodwill which might be deemed to have arisen through FRANCHISEE's activities, Inurea directly and ellclusively
to the benefit of DUNKIN' DONUTS,
7. C, FRANCHISEE shall operate, adver1lse and promotelhe DUNKIN' DONUTS SHOP under the name "OUNKlN'
DONUTS", wilh no accompanying words or symbols of any nature, elcept as may be othelWise required by law,
FRANCHISEE shall nOI use, as pan 0' its corporate or other business name, any PROPRIETARY MARKS used by
DUNKIN' DONUTS, Induding, bul not limited to, MOUNKlN DONUTSM, "OUNKlW, MDUNK- or any form or variations
thereo' which, In lhe judgment of DUNKIN' DONUTS, Is likely to cause third panies to be confused or mistaken with
respect to lhe separate identllies of DUNKIN' DONUTS and FRANCHISEE,
8. A. During the leNn 0' this Agreemenl or anV extension thereof, and for a periOd of two (2) years thereafter,
regardless of the cause of termination, neither FRANCHISEE, nor any partner, i' FRANCHISEE Is a pattnership, nor
any lharlhofder, It FRANCHISEE is a corporation, shall. excepl with respect to Ihe ownership or operation by the
FRANCHISEE at additional licensed DUNKIU' DONUTS shops:
8. A.l. Divert or anempt to dlven any business or customer ot the OUNKlN' DONUTS SHOP to anV competitor,
bydireclorlndirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or preJudicIaJ
10 tho gOOdwill a..oclalad WIth DUNKIN' DONUTS' PROPRIETARY MARKS and tho DUNKIN' DONUTS SYSTEM;
8. A.2. Employ or seek 10 emplov any person who is at that time employed by DUNKIN' DONUTS or by any ather
DUNKIN' DONUTS franchISee, or otherwise directly or indirectly Induce such person to leave such employment;
8. A.3. Own, maintain, engage in, be employed by, or have any inlerest in any olher business which sells 01 oilers
to 1..1 any product 0' a type ollered by a DUNKIN' DONUTS shop; prOVided that, during lhe two (2) year period follOWing
elplratlon or terminallon of this Agreement only, the prOVisions of this subparagraph 3. shall not apply to another
busln8S11ocaled more than five (5) miles tram the DUNKIN' DONUTS SHOP orfrom any other DUNKIN' DONUTS shop,
Either party to this Agreement. upon notice in writing to the olher. shall have Ihe right to have determined whather said
five (5) mile radius Is a reasonable restriction on FRANCHISEE's actiVities during said two (2) year period by rlqu8lling
that the maner be submitted 10 arbitration in accordance wilh the rules 0' the American Arbitration Association then
applicable ror commerciaf disputes, In such event, each party shallseled one arbitrator and the two shalll8lect a third
and the decision of the arbitrators shall be final and binding upon the pani". FRANCHISEE runher agrees Ihat,ln the
event arbitration is requested, FRANCHISEE will engage in no competillve activities pending resolution 0' the dispute:
or
8. A.... Communicale or divulge to, or use for the benefit 01. any other person, persons. pannership, association
or corporation any information or knowledge concerning the methods of construCMg, equipping or operating a
OUNKJN' DONUTS ShOp and all other inlormation or knowledge which DUNKIN' DONUTS deems confidenllal which
may be communicated 10 FRANCHISEE, or 01 which FRANCHISEE may be apprised by vinue 01 FRANCHISEE's
operation under the terms of this Agreement. FRANCHISEE shall divulge such conrldentiallnformation only 10 luch
01", employees u musl have access to it In order to operate the licensed buslnesa. Any and all inlormation, knOWledge
and know-how including, wilhout limitation, draWings, maleriall. specifications, techniques, and other data, wtUch
OUNKJN' DONUTS deSignates as confidential shall be deemed confidential 'or purposes of this Agreemenl. DUNKIN'
DONUTS shall have the non.eldusive nght to use and incorporate In the DUNKIN' DONUTS SYSTEM. for the benerlt
0' itself and other rranchisees of the OUNKlN' DONUTS SYSTEM, any modifications, changes. and Improvements
developed or discovered by FRANCHISEE or FRANCHISEE's employees or agents in COnnection With Ihe licensed
buliness, without any liabilily or obligation 10 the developer thereat.
8. B, The covenanls contained in this Paragraph 8 shall be construed as severable and independent and shall
be Interpreted and applied consistently With the requiremenls 01 reasonableness and eqUtly, If all or any ponion of 8
covenant in this Paragraph 8 is held unreasonable or unenforceable by a coun or agency having valid JuriSdiction In
a dlClsion to which DUNKIN' DONUTS Isa party, FRANCHISEE elpressly agrees to be bound by any IlIsercovenant
Induded Within the ferms of such greller covenanllhat imposes the mlOOmum duty permlned bV law, as I' the 1..lIr
covenant were separalety slaled In, and made 8 pan 0', this Paragraph.
B, C. FRANCHISEE undefstands and acknOWledges thai DUNKIN' DONUTS shall have the right, In its IDle
disctetion,to reduce Ihe scope of any covenant set fonh in this Paragraph 8. or 01 any portion orponions thereof, without
FRANCHISEE's consent, and FRANCHISEE agrees to comply fonhWIlh Wllh al1y covenant as modified, which Shall be
fully en'orteable, the prOVisions 01 Paragraphs 14.A. and/or 15 of this Agreement nOtwithstanding,
8, D. FRANCHISEE agrees thai the ellSlence 01 any claims againsl DUNKIN' DONUTS, whether or not aria/ng
from this Agreemenl. shall not constrtule a delense 10 the enforcement by OUNKIN' DONUTS of the covenantaln this
Plllgraph R.
8. E, FRANCHISEE acknowledges Ihal FRANCHISEE's ViolatIon 01 the terms 01 this Paragraph B, would rllult
In irreparable injury 10 DUNKIN' DONUTS for which no adequale remedy at law may be available, and FRANCHISEE
accordingly consents 10 the issuance of an Injunction prohIbiting any conduct bV FRANCHISEE in Violation of the firm,
0' thIs Paragraph 8.
9. A. FRANCHISEE shall be in detaull undor Ihls Agreement:
6
Proprl.lIIry
Mark.
Rlltrlctlon'
on the
FRANCHISEE'S
ActlvIU..
Dolouh
'et. A
9, A.1. If FRANCHISEE shall become inSOlvent Dr make an Bllignment for lhe benefit Zedltors, or 11 a pelltlon
In bankruptcy il f.htd bV FRANCHISEE. or luch. pelllion i,lded agamal and consenled 10 by FRANCHISEE. or II not
disml'.ed WIthin thlrty (30) daVI. or .f FRA.NCHISEE is adjudicated a bankruPt. or., a bill in eQlJlty or olher proceeding
for the appointment of 8 reteivel 01 FRANCHISEE or olher cUlledla" lor FRANCHISEE', bUllness or Bssellll flied
and I. con.ented 10 bV FRANCHISEE or II nol dlsmllsod Within thirty (30) days. or 8 receive, or Din., custodIan is
appointed, or It prOCHdmUI lor compoSItIon wllh creditor. under anV Itala or lede,allaw Should be Inltltuted by or
aglinlt FRANCHISEE or If the real or pellonal propeny of FRANCHISEE shall be lold at levy Ih."upon by any Iha'lff,
marshal Dr constable.
9. A.2, If FRANCHISEE fallllo complV WIth any law, regulatlon. ardor or DUNKIN' DONUTS standard relallng to
health, samlation or lalety; or If FRANCHISEE coases to oporate. bul doos not abandon, Ihe DUNKJN' DONUTS SHOP
for . penod of forty eight (48) houII wllhout the prior wrlngn conSenl 01 DUNKIN' DONUTS.
9. A.3. II FRANCHISEE falll, refusGI. or neglects to pay when due 10 DUNKIN' DONUTS any moni.. owing 10
DUNKIN' DONUTS or to the Fund.
9, A.4. II FRANCHISEE f8illlo comply wllh any 01 FRANCHISEE's obligations under thil Agreement not olherwill
lit forth In Paragraph 9 of thll Agreement; or II FRANCHISEE Ipillto carry out in all respeClllts obligatlonl under any
le..e for the DUNKIN' DONUTS SHOP, or under any mortgage, equipment agreement. promillory note. condlUOnal
Hlel contract or olher conlract materially .Heetlng the DUNKIN' DONUTS SHOP 10 which lh, FRANCHISEE Is. party
or by which FRANCHISEE is bound, whether or nol DUNKIN' DONUTS is a party thereto.
B, A.5. II FRANCHISEE abandonslhe DUNKJN' DONUTS SHOP; or II FRANCHISEE Inlentionally undenepam
GROSS SALES or lalsifies Ilnanclal dala; or I' FRANCHISEE'I lease for the OUNKIN' DONUTS SHOP wilh DUNKIN'
DONUTS or a IUblidl1l'f 01 DUNKIN' DONUTS is terminated or expires.
9. 9. Excepl IS otherwise provided in Paragraph B of thil Agreement, FRANCHISEE Ihall have thl right to cure Cure Period
FRANCHISEE's defaull under this Agf8emenl WIthin the epplicabll periOd lit forth below, follOWing wrinen notice of
default from DUNKIN' DONUTS. In the even' thet a ltalute In Ihe Ilall wherein the DUNKIN' DONUTS SHOP is localed
requlrel a cure period for Ihe applicable default which Islonglr than the curl period Ipeclfied below, Ihe Ilatulory cure
period ahan apply.
9. 9,1. A twenty four 124) hour cure perlocl shall apply to the violation 01 any law, regulalion, order or DUNKIN'
DONUTS standard relating to hoalth, 1I00tallon or salety: or if Ihe FRANCHISEE ceaSII 10 operale, but doel not
abandon, the DUNKIN' DONUTS SHOP lor a period of 10rtV elghl (48) hours without Ihe priorwnftan consent of DUNKIN'
DONUTS.
9. 9.2, A seysn (7) day cure period shaJi apply if FRANCHiSEE fails, refuses, or neglect. to pay when due 10
DUNKIN' DONUTS any monies owing 10 DUNKIN' DONUTS or to Ihe Fund, or if FRANCHiSEE tails 10 malntain thf'
insurance coveregl lit fonh in Paragraph 5.J. of this Agreement.
9. 8.3, A lturty (30) day cure period shall apply If FRANCHISEE fails 10 comply wilh any of FRANCHISEE's
obligations under Ihis Agreement, unless olherwise Ipecified In Paragraph 9 of this Agreement, or if FRANCHISEE falls
to carry out in all raspects Its obligations under any lease for the DUNKIN' DONUTS SHOP, or under any mongaoe,
equlpmenl agreement, promissory nole, conditional sales contraCl or other contrad materially atlecting the DUNKIN'
DONUTS SHOP 10 whiC'h FRANCHISEE Is a party or by which the FRANCHISEE is bound, whether or nol DUNKIN'
DONUTS Is a party thereto.
9, 8.4. No cure periOd shall be ayallable If FRANCHiSEE abandons the DUNKIN' DONUTS SHOP; or if No Cur. P.rlod
FRANCHISEE inlentlOnally undefreports GROSS SALES or Ialslfies finanCIal data; or If FRANCHISEE's lease lor Ihe
DUNKIN' DONUTS SHOP WIth DUNKIN' DONUTS or 8 subsidiary of DUNKIN' DONUTS is terminated or expires.
9. C. t II FRANCHISEE faill 10 remit when due any payments required under Ihis Agreement, FRANCHISEE Intll'lt Ind
agre.. to pay ali colleClion cosls, reasonable anomey'sless and interesl on the unpaid amounls a118% per annum COlli
or the highllt permissible rate, in addItion to Ihe unpaid amounls.
B. C.2 If FRANCHISEE falls 10 cure a delault, following nolice, WIthin Ihe applicable time period sellorth In
subparagraph 9.9.. or if Ihls Agreemenl is lerminaled, FRANCHISEE shall pay 10 DUNKIN' DONUTS all damages, costs
and expenl8s,lnduding without limitation interest at 18% per annum, or Ihe highest permissable rate, and re.sonabl,
anomeys' fees, incurred by DUNKIN' DONUTS a5 a result of any such defaull or termination; and IBid Interest and all
damages, COlli and expenses,mduding reasonable anorneys'lees. may be induded in and forma partollhe judgment
awarded to DUNKIN' DONUTS In any proceedings brought by DUNKIN' DONUTS against FRANCHISEE. Continued
use by FRANCHiSeE of DUNKIN' DONUTS' trademarks. trade names, PROPRIETARY MARKS, and serviCe marks a",'
term/nation of this Agreement shall Constilute wllllul trademark inlringement by FRANCHISEE, Nothing in this
Agreement shall preclude DUNKIN' DONUTS from seeking any remedy under federal or state law lor willful trademar1c
infringement, Including WIthout limitation treble damage. and injunclrve relief.
9. D, Except as sel fanh in Paragraph 9.E., if FRANCHISEE fodllO cure to DUNKIN' DONUTS salls'actlon Wilhin Termlnallon
the applicable penod fOllOwing nollce Irom DUNKIN' DONUTS, DUNKIN' DONUTS may, in addillon to all other remedies
at law or in eqUIty or as olherwise set fonh in this Agreemenl, immedIately terminate Ihls Agreement. Excepl as set
fonh In Paragraph 9.E., such termination shall be eHective Immedialoly upon receipt of a Wrlnen notIce of lermnation
from DUNKIN' DONUTS,
9, E. This Agreement shall immediately lelmlnate upon the occurrence of any event set forth in Paragraph BA.l.,
without opportunity to cure or notice of lerminahon.
9. F. Upon any lerminatlon or expiration of this Agreemenl:
B. F,l. FRANCHISEE shall promplly pay to DUNKIN' DONUTS all sums owing or accrued prior 10 such I.rmination
orexplratlon from FRANCHISEE 10 DUNKIN' DONUTS, the r~nd, and DUNKIN' DONUTS' rental subSidIary. Said sums
shaJlalso indude interest 0118% per annum or the highesl permiSSible rate and any damage,. costs and expen,es,
Induding reasonable anomey', fees, incurred by DUNKIN' DONUTS by reason 01 default on Ihe pan 0' FRANCHISEE.
9, F.2. FRANCHiSEE shall immedlalely cease 10 use, by advertISing or in any olher manner whalsoever, any
melhods associated wilh the namo .DUNKiN' DONUTS., any or all of Ihe PROPRIETARY MARKS and any other trade
sectets, conhdonllal information. operalmg manuals, slogans. ligns. symbols or devices Imming part of Ihe DUNKIN'
DONUTS SYSTEM or otherwise used in connection With Ihe operation of the DUNKIN' DONUTS SHOP, FRANCHiSEE
agrees that any unauthorized use or conllnued use after the termination 01 this Agreement shall consblulelrreparlble
harm lubJecllO inlunctive relief.
9. F.3. FRANCHiSeE shall immediately relurn to DUNKIN' DONUTS all operaliMO manuals. plans,lpeoficationl
and other materials contaming mlormatlon prepared by DUNKIN' DONUTS and relalIVe to the operation of a DUNKIN'
DONUTS SHOP, and
9.F.4, FRANCHISEE shall contlOueto comply Wllh.lor the P8Mod Specllred thoroin. Paragraph 8. orthl, Agreement.
7
9. G. No rlQht or remedy he,e.n conleued upon or reSINed 10 DUNKIN' DONUTS il exdullve of any olher ngh1
or r.medy herein, or by law Of equity provided or permlned, but each shall be cumulallve of IVltfY olher rIght Of r.medv
Ol\len herounder.
to, A, This NJreemln1 shallmure to the bonelll of the IUCCllSOfI and 8SSHJns 01 DUNKIN' DONUTS. DUNKIN' Trlnaf" 01
DONUTS Ihall have Ihe ~h110 alSlgn III flghla unde, Ihls Agreement 10 anV pefWO. porlOOS, partnerlhlp, aSSOClalKln or Inllre.t
corpor8bon, ptcMded lhat Ihe tranlferee llJfo.sm Wfltlng 10 assume all ObkgabonS und.rtaken by DUNKIN' DONUTS herllln
and FRANCHISEE rOC8fV81 I stalement ITom both DUNKIN' DONUTS and IlIlranlloreelolhallnect. Upon.uch BllIQnment
and ..Sumptlon, DUNKIN' DONUTS .hall be unCIor no further obllglthon hereunder, except for accrued liabilities, II any.
10. 8. Except as herllnanlr prOVIded. nOllhlr FRANCHISEE, nor anv partner, d FRANCHISEE i.. pannerShlp, nor
any 1h.,8f'lOIder, If FRANCHISEE i, it cOl'po'allon, without DUNKIN' DONUTS' pflor wflnen con,enf, shall, by operallon of
tawar olherwtle, leY, aSllOn, transfer, convey, give away, pledoe, mortgage or olherwlse encumber to any person, PltlOfll,
paMerstvp, auooatlon or corPC)l'llllOn, any Inletllt In Ihls Agreement or any Inlerest In the franc"'se grant.d hereby, Of
anv Interell in any propneto"h.p, pat1nerlhlp or corPOrahon whICh owns anv Inlerest in Iholranehlse, nor offer, permrt or
autler the urne. My pUrpor1ed aSllgnment or Irllnlfe, nol havll'lO Ih. prlO( wrlnen conaent of DUNKIN' DONUTS ahall be
null and \IOId and ,hall constltule delault hereunder. Any proposed Iransfer must moel alllhe fequuementl 01 DUNKIN'
DONUTS Inducting, but not hmted 10 lhoso set torlh In Paragrapn 10,C. and the toIlowmg:
10, 8.1, FRANCHISEE IhaIl have operated Iho DUNKIN' DONUTS SHOP lot 8 perIOd 01 alx (6) months pnor to the
proposed transfer,
10. 8.2, The ntel prICe of lhe Inlerest to be conveyed shaI! not be 10 hlQh, in the good farth judgmenl of DUNKIN'
DONUTS, u to JeopardIZe Ihe ability ollhe trllflsleree to tT\4lIf1laln, operate and promote the DUNKIN' DONUTS SHOP
property and meet hea financial obIigabonllO DUNtoN' DONUTS, third party suppli8l1 and credItors. Thil provllk>n shall
noI or.... 811Y I_IV on lI18 p8I1 01 DUNKIN' DONUTS 10 lhe 1t"".I"," in lhooy.nl th8t DUNKIN' DONUTS ep_lI18
lrantfer and Ihe tranlfer. exptnences flNlnClal difficulties.
10, B.3. The transflfee may not be a Iimrted partnership, lrust or other enllly notSpeclfiCally authoriZed herein;
10. 0,4, A1ll1CCrued montl'/ obl;oation. 01 FRANCHISEE 10 DUNKIN' DONUTS,lh. Fund, DUNKIN' DONUTS' r.n181
aublldlaty, and obligallonl of FRANCHISEE which DUNKIN' DONUTS has guaranleed. Iienl. deferred rent and aU other
obllgationl under the LEASE OF DUNKIN' DONUTS SHOP. il any, shall have been satJsfied pnor' 10 BSllOrvnent Of Iranlfer,
10. B.S. The DUNKIN' DONUTS SHOP. indudlngequipmenl, SlQns, budding, improvements, inlenor and eldel1Or. shall
be in good operating condlllon and ,epalr and In compliance wIln DUNKIN' DONUTS then-currenlltandards. IndUdmg
Without hmlatlon replacements and addlllons.
10, 8.8, FRANCHISEE and any lransferee hereby agree not to assert any SecUllty interest. lien, claim or noht now Of
hereafter In Inll franchise, thetranchil8 granted lothetransleree. orleaseforthe DUNKIN' DONUTS SHOP and furtner agree
thai any security inlerelt, hen, claim or nghl enelled 'WIth lespect to any personal property 811he abOve location shall not
Inctude any after-acquiled property and IhaU be subject. juniOf' and subOfdlna18 to any aecunty intlfesl. lien, ctaim or right
now or hereaftet aSl811ed by DUNKIN' DONUTS, il5 lucceSsors ur asSigns,
10, 8.7, In lhe eve", the lranller... or any partner or shareholder thereof, holds any IOterelt in a DUNKIN' DONUTS
franchise olhetlhan the DUNKIN' DONUTS SHOP. the transferee and the partners and shareholders thereof who own an
Interlllln other CUNKlN' DONUTS franct'IlSe(s)lhallelllCUto DUt~KlN' DONUTS' AGREEMENT OF CROSS.GUARANTEE
to DUNKIN' DONUTS for lhe payment 01 fees, renls and olher obligallOnl for each DUNKIN' OONUTS franchise(s) In which
the tlansfefee or any partner Of 'harehotdor Ihereof holds or acquires any Inlerel1.
10. C, DUNKIN' DONUTS Ihall not unreasonably 'WIlhhold il5 consent to any transler referred 10 in Paragraph 10,e,
ot lhis Agreement when requested, prOVIded, however:
10, C,1. II FRANCHISEE is an IndMdual Of partnerShip and deSIres to aniOn and transfer thls Agreemenl to a
COlllOfIltion:
,
a. Said transferee corporatIOn ahall be newly organized and its chaner Ihall pKMda thai 115 activities are
confined exduaively 10 operating DUNKIN' DONUTS shops as IIClnsed under Ihls Agreement.
b. FRANCHISEE or, If FRANCHISEE is a partnership, the partners Iiconsed herein 10 operate the franchlse
shall be the owner or owne" 01 the majonty slock inleresl ollha uanslere. corporation.
c. FRANCHISEE or. if FRANCHISEE is a partnership, one of the panners licensed herliM to operate the
franchise shall be the priMOpaI ellocubve officer of the corporatIOn.
d, The Iransleree corporation and aU shareholders of Iransferee corporation shall enler into a wntten
8S11gnmenf. under seal, in B larm satlsfactory to DUNKIN' DONUTS, Wllh the transleree corporalion assumng all of the
FRANCHISEE's obligations under Ihis Agreement.
e. All shareholde" of the transferee corporation shall enter mlo a wnnen agreement, in a lorm satistaclory
to DUNKIN' DONUTS, pntty and severally guaranleeing the lull paymenl and per10rmance of Ihe transferee corporatJon',
oblogetions 10 DUNKIN' DONUTS,
f. Each slock cartlliCale of tho transferee corporatIOn shall have conSpiCUously ondorsed upon it a stal.ment
th8t ills hekj subject: to, and thallurther aSSignment or transler theteol is subject to. all restnc:bons imposed upon transfers
by this Agreement; and
g. No new shares of convnon or preferred voting stock in the transferee corporallon shall be issued to any
person. persons, partnership, ISlOCJalion or corporation WIthOut obtairllng DUNKIN' DONUTS' prior WllIIen consent, whd1
5haII nol umeaaonabty be 'WIthheld.
10. C.2, It a lransfer, aIon. or lagelher Wllh other pr8\llQUs, SimUnaneous or proPOSed trBMfers. whether rlriated or Tlansfer 01
UNelated, would have the effect of lransfemng an Inlerelt of filly percent 150%) Of mote In the IranchlSe liCensed herein, Control
or the entity holding such franchise. 10 aomeone other than an origtnal Signalory of Uus Agreement:
a. Thetransfere. and each partner and sharehOk;ler ollransleree musl be a Unrted Slates dtizen or lawful
fesident alien of the Unrted SIalIS and shall be of good moral characler and ntputabOn and shau have a good credit raIlng
and busintls qualifiCatiOns reasonably acceptable 10 OUNKlN' DONUTS. Such Qualifications include. WIthout limitatiOn,
literacy and fluency in the Engh$h language sulfiClent,ln the good faith OpiOlOO of DUNKIN' DONUTS, 10 communiCate WIth
emptoyees, customers, and suppliers 01 DUNKIN' DONUTS and to I8IISfactonty complete trairing at DDU, FRANCHISEE
thaIl ptOVlde DUNKIN' DONUTS WlIh luch lI1formalion as DUNKlN' DONUTS may requite to make such determnation
concerning each such proposed transferee;
b. The trans'eree musl dOSigNle two managers for tho DUNKIN' DONUTS SHOP. one of whom musl be
. transferee Of. partner or shal8holder 01 the transferee. PrIor to thelren"er, both manage,.. must successfulty complete
the DUNKIN' DONUTS Iraanll'lg course !hen in ettect tor franchisees;
8
f), ..
c. Thllran,"''', Including alIlhatlholder, and panne" ollhl b'analerH. Ihd~ and levltfaJly..KUtI.
on DUNKIN' DONUTS' then CUffen! forms. I Franchl.. Agreemenl and any other standard ancdla1y 8grl8menl. Inctudlng
wrthout Itmllton a Pflonty PAyment 8Qfeemenl. I' applicable. with DUNKIN' DONUTS. The pnonty In payfNH11 agreement
WIll prcMdt, among othtf lhmos, lhall' Ihe transfrr.. II unable al any I,me 10 malte payments 10 the transferor lor Ihe
purchue at the DuNKIN' DONUTS SHOP and 10 OUNKlN' DONUTS and/or III tenlal lubSldaaty uno" Ihe Franchi..
Agflllfnenl and lIase, lhat Pliymentl'O DUNKIN' DONUTS. the Fund. and DUNKIN' DONUTS' 'lnlallubaIdiIry WI. have
pnorcy. WFlh respect 10 thllhe" current Franchi... Agfeement. no o,eatl' percentage. 011"1 GROSS SALES than thOle
requwld by Paragraph,,, E. and 4F. IhaII be required
d. The l,an,I"OI, and alllndlVlduall PropoIInQ to lran,fer an mlet"lln Ihe ffanchlll.lhaJI'ltlCUll. general
,,1'11I under .eal of all claims agalnsl DUNKIN' DONUTS and a pnonty In paVmenl aoreement.1f appbcabl..
e. UnIeu I longe' penod 'I agreed upon by DUNKIN' DONUTS and lhelransfet...lhe lerm of the FrancRH
Agrltmenl rlqwed PUfluanllhls sutJpatagraph Iha1l be for the uneJlJ)lutd lerm of this Agreement. Except In the In.tance
that. Penod longer lhan lhe une.plred lorm ollhls Agreement II agreed upon trl DUNKIN' DONUTS, trenaferee,ha11 pay
no INITIAL FRANCHISE FEE as prOVIded In Paragraph ... of this Agreement.
1. If lransleree II a corporabon:
(1) Each stock cendale 01 the Iransleree corporation s~ have conspicuouSly endoruct upon it .
atatemenl IhII It II held 'ubt8Ct to, and tnat further aSSlQrvnent or 118tl1lGf Ihereof iSSUb!ect to, all rntncbOnllmpoaed upon
_ by """ Agrtemont
(2) No new shates 01 common or preltfTed voIIng stock in thelransf,r" COfpOf'abon IhaII be issued 10 any
perIOft. personl. p&MeMP, ..1OCI8bOn or corpoqllon wrthouI obtalntng OUNJ<JN' DONUTS' prior wnIIen COl1Hf1t; and
(3) AII'harehokt"s ollhe UllI1Ileree corporation shallenllt into a 'MtIt8n agreement, in alann HlIafactory
to DUNKIN' DONUTS, jointly and .....eraUy guaranl"lng the full payment and pertonnance of the transferee corporetlon',
~ to DUNI(lN' DONUTS
g. FRANCHISEE ahall hav,'ully p8ld and sallsfied all 01 FRANCHISEE's obligatIOns to DUNKlN' DONUTS,
the Fund. and DUNKIN' DONUTS' rentallubsidWy and DUNKIN' DONUTS shall have betn paid a rrBnlflf Fee equal 10
the gUlf ofFcut Thouaand DoUars ($4,OOO.OO),lOaeased by 5% compounded annually dunng the lermolthilAgreement
and any renewal perIOd, or:
I1J 5% of the Adjultod Sales Pnco of the DUNKIN' DONUTS SHOP II thel8le takes place wrthin three (3)
yean after the dale on which FRANCHISEE opened the SHOP to the putJbC (as 8 new shop), or the dale on whch
FRANCHISEE 8Cquared Ihe SHOP (as a pr8YlOUsly operaled shOp); or
(2) 3% of the AdjuSled Sales Price of the DUNKIN' DONUTS SHOP if th,w takes .e after thfH (3)
ye8tllrom the date on which FRANCHISEE opened the SHOP to the publiC (as a new shop). or the dale on which
FRANCHISEE acqUll"ed the SHOP las a pr8Viou1ty operated lhop),
The Adjusted Sales Price shall Include, without limilabon, cash, assa.mpllon of debl. IQulpmenlleue
obItgations. and delened IInanong and amounts allOcated 10 property 01 every kuld, natute and descnpbon: lumrture,
fixturn, signs. eQUIpment. supplies and Inventory; exdudtng amy amounts reasonably allocaled to land and buddang If
owned by FRANCHISEE. II is intended that all conSlderalion 10 be paid 10 FRANCHISEE, or lot the benel,t 01 FRANCHISEE,
however desigtWed and whether or nol included In the Contract 01 Sale shall be deemed pan of (he Adjusted Sales Price
indudlng, but not by way of limrtabOn, amounts alloca!ed 10 8 covenant not 10 compet, Of petJOnalseMCe agreement.
The Ad,uSled Sales Poce shall be Ihe Sales Pnce to be reclf\ted by FRANCHISEE upon Uans'er of the
DUNKIN' DONUTS SHOP Ie" theamounl p8ld byFRANCHISEEfOfthe DUNKIN' DONUTS SHOP II purchased from another
francMee or lrom DUNKIN' DONUTS as 8 prlMOUSly operated shop. No adlUstment shall be made tor amounts p8Id in
connedion WIth the c1lV81Opment of a new DUNKIN' DONUTS shop.
DUNKIN' DONUTS will Wl/Ve lhe live percent (5%) or Ihree percent (3%) lee but not the fixed fee of $4,000
(subttdto increase' in connection 'Mth transfer of the DUNKIN' DONUTS SHOP 10 FRANCHISEE'S spause or one or more
of FRANCHISEE'S chddren ptCMded that, In DUNKIN' DONUTS' gOOd farth opinion, FRANCHISEE has been In tua
compliance WIth th, terms of all agreements wrth DUNKIN' DONUTS and Its rental subsidiary. However, the Franchise
AQrHmlnt issued 10 the spouse andlOl Children WIll be on lhelhen CUltentlorm in use at the time of transler induding th,
!hen current Translll Fee PfCMIk:ln.
For purposes 01 determining the correct Transler Fee, DUNKIN' DONUTS reservlltho nghtlO reallocate
amounls wl'liCh FRANCHISEE and lhe lIansferee ha.... allocated toland, budding, equipment. covenantagatnltcompebtlon.
personal seMCe agreement, Of Othet'MSe ii, in the good Ialth Oplf'llOl'l of DUNKIN' DONUTS, the a1locabQn 01 the partin IS
urweuonable in reiabOn to the value 01 the Iranchlsed bUSiness. If DUNKIN' DONUTS purchasel the DUNKIN' DONUTS
SHOP lrom FRANCHISEE by exerciSe of lis nght 01 flrsl retuaal uncler subparagraph 1 a.F. hereof. the Transfer Fee shall
be payIble by FRANCHISEE to DUNI(lN' DONUTS II ,I FRANCHISEE had _ the lnonchised b....n... to e third _.
h. Upon compll8nCe W1lh the aforesatd condrtionS and DUNKIN' DONUTS' approval of the Iransfer,
FRANCHISEE and anyshatehOlders or partners patIlClpallng in S81d l1ansfer shall, to Ihe ,xtent 01 theinlernt so transferred.
thereupon b, relieved of rurther obllgabons uncler lhe terms 01 U'lIS Agreement. eJlcePlthat FRANCHISEE and any former
lhartt'dders or partnltl of FRANCHISEE shall rltfT\8ln obIiga!ed lor FRANCHISEE's money ObIigabonS under Paragraph
4.. through the dale 01 sale, and under the restnctlY, covenants contained In Paragraph 8.. ~ner the date of tale,
10. C,3, II a transfer would have the effect of transremno an inlerest of forty.nlne percent (49%) or less In the franchise
IiCenIId h,rein. or the enbly hotdmg sUCh franchise, to someone other lhan an DOgInaI signatory of this Agreement:
a. The transferee and each partner and shateh0k2er of transf'r.. must b, a Untted Stales ClllZen or lawful
rllident alien 01 the Ur'llted State, and Shall be of gOOd moral chatDcler and reputatIOn and shall t\ave a good Clltdrt rating
and business quaJahcabOns reasonabfy acceptable to DUNKIN' DONUTS. FRANCHISEE shall provtde DUNKIN' DONUTS
WIth 'loCh information as DUNKJN' DONUTS may r8QUlre to make such detetminallon concetnlng each luch proposed
transferee;
b. The ItanSfefee must d8SlQnate two managers lor the DUNKIN' DONUTS SHOP. one of whom must be
a transferee or a panner or shareholder of thellansleree. Pnor 10 the transhtr. both managers mUSISuccessfully complete
the DUNKIN' DONUTS Ir&lntoo course then in effec1lor franchisees;
c. The transferee, Induding an shatehdders and partners 01 the transfer", thai jointty and severally execute
this Agreement and any other standarCS anoGaty agreement, indudlng WIthOut limltabQn . pnonty payment agreement. if
appticabIe. WIth DUNKIN' DONUTS. The pnonty in payment agreemenl WIn ptOVlde, amono other Ihings,lhal ifth'tranlleree
Is unable at any bme to make payments 10 !he transf8l'0I for tho purchase oflhe DUNKIN' DONUTS SHOP and 10 DUNKIN'
DONUTS and/or ItS rlnlal IUblM:baty under' the Franchise Agreement end Lease, that payments to DUNKIN' DONUTS. the
Fund. and DUNKIN' DONUTS' rentalsubsldl8l'Y WIll have pnonty.
d. The transferor and a11lndMduals PropQSIng to transfer." Intmeslln tho lranchIse, shall eJlltClJlo a generaa
reteuI under seal of II claims agDlnst DUNKIN' DONUTS and a pnonfy In payment agreement, I' applicable.
e. II transferee IS a corpotallOr.:
Tran,'er 'H
See Addendum
lO.C.2.g.
JiJ
Transfer 01 UU
TIw1 Control
9
"
111 Each 11oc:k cltftlhcale of the tranll,re, COfpollbon shill have compICUDUIty ,ndorHd upon It a
l1atement thai illl hlld lub)8d 10, and that further alllQnmen1 or tranller Ihereof il IUblecl to, an rntnctlOnl mpostel upon
trans"" by thll ,\greement;
121 No new shal'lI of common or preler'ed voting stock. In Ii'll transltr" COfpolallOn shall be IIsued to any
person, persons, partnershlp, IInooabon or corporallon WIlhouI obtalr\lng DUNKIN' DONUTS' pnor wnnen ConHnt; IIlCI
(3) ,\II IlwehOlders 01 theuansleree corporatlon shalIenler Into 8 written agreement. in a form ,atIstactory
to DUNKIN' DONUTS, pntty and leveralty guarante8lng the fuU paymenland perlormance 01 the transleree corporation',
obIigabonIlO DUNKIN' DONUTS,
,. Upon compliance WIth the afOfeS81d condlliOnl and DUNKIN' DONUTS' apPfcwal ollhe 'ranller,
FRANCHISEE and any lhateholdel' Of panners partlopallng In IBId transfer .hall,lothe exlenl olthelnlerllt 10 lranltlffed,
thefeupon be relillY8d of further ObllQ4bonS under the lennl 01 this Agreemenl. excepl thai FRANCHISEE and any former
shaIehokIers or partn8f1 or FRANCHISEE shall remau1 otitQ8ted lot FRANCHISEE', money ob6igIbOnl under Par8gt8Ph
4., thrOugh the date 01 saI., and under Ihe reslncllV' covenantl contamud In Paragraph 8., after the dati of HIe.
10. D. In the event of thl death 01 FRANCHISEE, or any partner or shareholder thereof at any lime dunng the lerm Tranl'er on
01 this Agreement, tne legal repntsent.a!lVfI 01 FRANCHISEE, partner or lhareholder, looether wrth all surviVIng pann.... or Death
sharehoIders,l' any. potty, shall, Wllhan three (31 months 01 such event apply, In wnbnQ.lorthl nght to transfer the IranchiH,
Of th.lnlerest ollhe deceased pattnef or shar.hoIder in 'uch frand\tS8 ,10 sUCh person or pel'1OO1 u the leoaI flprnenIatIve
may speoty, Such transfer .hall be appfoved by DUNKIN' DONUTS upon Ihe fulflllmenl of all of the conditione Ht forth In
PlI8Qraph lQ,C.2. or 10.C.3. (IS appIiCDbtel or this Agreement, except that no transfer feelhd be fequil'ed If the uansterw
Is I beneficiary or hetr of FRANCHISEE.
10, E. If Ihel. flpt1tHntatrv. and an surviving partners or thar.hOlders, II any, do not comply with thlllontMid
provisions of Paragraph 10. or do not propose a trMsferee acceptable to DUNKIN' DONUTS under Ihe llandardll" forth
In Paregraptt 10.C.2. and 10.C.3., aIJ nghts liCenled 10 FRANCHISEE under Ihis AQreemenl lhaIll.nninatl torIhwith and
automIbCaIty revert 10 DUNKIN' DONUTS. DUNKIN' DONUTS ,hall have the right and optiOn, ..erdl8b&e upon luch
lerminalIon, topurchaseal fumiture, fixtures, SIQr:I, eqUlpmenl andother ch8nelsat. prK:e to be agreed upon by the patti..
or,lt no agreement as to pflce IS reached by lhe pBrtJel, at such priCe as may be delennined by a qua'died appnu.....
approved by both parties, such approval not to be u{'lreasonably Withheld. DUNKIN' DONUTS thall give notice ollIS lnlenl
to exlfCiH S8ld optiOn no l81er than twenty-one (21) days prior to tennlnatlon.
10. F, If FRANCHISEE, or any shareholder or partner thereof. has receIVed and desires 10 accept a SlQned, bonalide Right ot FIrat
wntlen olter lrom a thlrd patty to purchase FRANCHISEE's Iranchlse or shar.hold.r'. or partner'slOterest In th.ltanchiH, Relulll
FRANCHISEE or such shareholder or partner shall nDllty and prOVIde DUNKIN' DONUTS With a copy olluch oll.r, and
DUNKIN' DONUTS IhaU have the nghl and OpllOn, e.efosabl. Wlthtn forty.flV8 (451 days aftef ItS reC8fpt 01 a copy of the
offer 10 purchase FRANCHISEE'S franchlse, or such ahar.toder's Of partner's interest in tne franchise, on lhe aame lennt
and conditionS as olflfed by IBId third party_ DUNKIN' DONUTS' e.eros. 01 its right to purchase FRANCHISEE'. franchise
hereunder shall not relieve FRANCHISEE of its transl" lee obligation to DUNKIN' DONUTS under Paragraph 10.C.2.g.
ShoukI DUNKIN' DONUTS nol .xercise IhlS optiOn and the terms of Ih. unaccepted offer be all.red, DUNKIN' DONUTS
shall, In each instance, be nollfled of the changed offer and shall again have fOr1y-fMt (45) days 10 purchase on the altered
lerms, Should OIJNKlN' DONUTS nolexeraS8 ttllS optlon, Ih.l.rms 01 Paragraph 10.C.2. and 10.C.3. las apptieabll) shal
apply to any treMfer which may be contemplated,
11, A. This "oreement does nol constitute FRANCHISEE an agent, legal representative, joint venturer, partner, R.IaUanshlp 0'
employee or servant of DUNKIN' DONUTS or lIS subsldl4fY for any purpose whatsoever. and It is deemed understood Partin
between the parties hereto thai FRANCHISEE shall be an independ.nl contractOf and is in no wav authonzed to make Itrf
contract. agreement, warranty Of representatlon on behalf ot DUNKIN' DONUTS Of Its subsidiary or to create any obligation,
expt811 or Implied, on behalf or DUNKIN' DONUTS or Its subsIdiary. The parties agree thalltus Agreement does noI create
a fiduaary felabon5hlp between DUNKIN' DONUTS or its subSldaary and FRANCHISEE.
11, B, Under no Circumstances shaU DUNKIN' DONUTS or FRANCHISEE be lIablelOf any act, omission, debt Of any
other obligation of the other. Each party shall indelMlty and save the other hannless ag8lnst any such d8m1 and Ihe cost
of defendino against such ctaims ansing difectly or indIrectly Itom, or as a r8lull of, Of in connectlon with, FRANCHISEE's
_ 01"0 DUNKIN' DONUTS SHOP,
12. No ladure of DUNKiN' DONUTS to exerCise any powef rnerved 10 II hereunder, Of' 10 inSilt upon strict compliance Nan-WalYer
by FRANCHISEE with any obligation or COndItion hereunder, and no custom or practICe 01 the parties in variance wrth the
terms h.reof, shall constitute. W8/V8l' 01 DUNKIN' DONUTS' right to demand stnct com~ wrth the t.rms hereof. WIivIt
byOUNKlN' DONUTS 01 any PartJcutar default by FRANCHISEE shall not ailed or ImpaJr DUNKIN' DONUTS' noht in reaped
10 any subseQuenl default of th. same Of of a dlller.nt nature: nor snaJI any delay, warver, forbearance or omiSSIOn or DUNKIN'
DONUTS 10 ..erase any power or nghts anslng oul of any br.ar..h or d.fault by FRANCHISEE of any oftheterml, prOYtllOns
or covenants hereof atlect or Impair DUNKIN' DONUTS' rights, nor shall such conslltute a waiver by DUNKIN' DONUTS 01
any right hereunder Of of the nght to dedare any subSequenl breach or defd, Subsequent acceptance by DUNKIN'
DONUTS of the paymenlS due to II hereunder Ihall not be deemed 10 be a warver by DUNKIN' DONUTS of any preceding
breach by FRANCHISEE of any lerms. cov.nants or condlllons of lhis Agreem.nt. Acceptance by DUNKIN' DONUTS 01
paym.nts due" hereunder from any person or entityotherlhan FRANCHISEE shall be deemed 10 be accePlance Itom such
person or enllly AS an agent 01 FRANCHISEE and not as recognitIOn of such person or entity as an assignee or SUCC81S01'
10 FRANCHISEE.
13. An noIICes hereundlf by DUNKIN' DONUTS 10 FRANCHISEE shall al DUNKIN' DONUTS' optIOn be peflOMllv NoUc..
detiYered or sent by Ie{ecopier, or prepaid prival. cauner, or cel1lfied mad to the FRANCHISEE al the addrllllet forth below
Of It such other address 81 FRANCHISEE n.av Itom lime to lime gIVe notlCl of to DUNKIN' DONUTS, AI notiCeS hereunder
by FRANCHISEE 10 DUNKIN' DONUTS .hall oe urn by .o""oed .....,0 DUNKIN' DONUTS INCORPORATED, Post 0lIi0e
Bole 317, Randolph, Massachusens 02368, Ann: Senter VIC. President and General Counset Of at sUCh other address as
DUNKIN' DONUTS may Itom lim. to lime give notice 0110 FRANCHISEE.
To FRANCHISEE; W. John Cheatnut. clo Dunkin' Donuts, 1186 Harrisbura Plke,
Carlisle, Pennsylvania 17013
14, A. ThisAofeement, and the documents rel."ed to herein shall be the enbre, full and compl.t.agreemenl between EntIre
DUNKIN' OONUTSand FRANCHISEE concerning Ihe subject matter h.reo', and supersedes aU priOr agreements, no other Agreement
representabOn having induced FRANCHISEE 10 execut.thlS Agreement: and there are no reprlsentabonl, inducemenll.
prorriIeS or agreements, or" or OIhltWtSe, betWeen the parues not: embodied heretn, whiCh Itt of 8.f'tV force Of eIfed with
referencelothlsAgreement orotherwise. Noamendment, change orvanance fromthts Agreemenllhallbe bindingontither
party unleu executed in wnting.
14. B, The success of the buSiness venture contemplated to be undertaken by FRANCHISEE by Wtue of this
,fqeementIS specutatMtanddependl,lO a large elde"" upon the abl.tyol FRANCHISEEu an mdepend.ntbuSinellman,
as well as other tactors. DUNKIN' DONUTS does not make."" rept8lentabOns or wananty as 10 the potenti8llucceu of
Ih. business v.nlure contemplated hereby. FRANCHISEE acknowledges that It has entered into Ihts Agreement after
making an independent mvestlgabon of DUNKIN" DONUTS' operabons, and not upon any representabOn 81 to profits which
FRANCHISEE in partICUlar mlQht be expected 10 realIZe, nor has anyone made any other mpfeseolation which II nee
.xpressly lei forth her8ln, 10 Induce FRANCHISEE to accegt IfUS tranctuse and e.ecute this Agreement.
'0
ADDENDUM TO DUNKIU' DONUTS FRANCHISE AGREEMENT
FOP PRODUCING UNIT
Producing Unit Pranchiseel CHE.SIIlllT lNTF.RPRlSES tNC
P'roduc1nq Un1t Addr...: 118'Ollarrhburg Plke. carltsle. I'A 1/U1J
Producing Untt PICI Jb9~ /
Date of Producing Unit Pranchi.e Acrreemmcl 0/ 0/ /&,/9 ~
The following provision is hereby added to the above captioned
Dunkin' Donuts Incorporated Franchise Agreement by and between the
above captioned Franchisee and Dunkin' Donuts Incorporated or its
predecessor, Dunkin' Donuts of America, Inc,
ADDENDUM 10.c.2.
This DU~'IN' DONUTS SHOP has been designated as the produCing unit
for the DUNKIN' DONUTS Satellite Unitlsl located atl9JO W.ln"t "ottom Rd,
Ca~li!lle. PA. t 701" PIC 2684 ,
PIC , PIC
(the .sAtellite Unitla,... It. tranater, alone or toqether With
othet previous, simultaneous or proposed transfers, whether releted
or unrelated, would have the effect of transferring an interest of
f~fty percent 150" or more of the franchise licensed by the
'ranchise Agreement for this producing DUNKIN' DONUTI IIOP, or the
entity holding such franchise, to someone other then an original
signatory of the pranchi.e Agree.ent for this producing DUNKIN'
DONUTS SHOP, the following provision. shall apply, luch transferee
must also qualify as a transferee under the terms of the rranchi.e
Agre~ment for the DUNKIN' DONUTS Satellite Unltls', purchase an
equivalent interest in each franchise for each DUNKIN' DONOTI
Satellite Unitlsl and e.ecuee all document. as required by DUNKIN'
DONUTS.
r
A'1"1'EST/WITNESS
ACCEPTED AND AGREED TOI
CHESTNUT ENTERI'RISES, ICN, /FRANCH liEF I
ByJ!LI).IJ a~~
~tn:.':'M~~;;d.nt
r ranch Uee
.r:b-tl .4, e~/z;J
~~~utt Secretary
runchUee
ATTEST
Secneuy
ACCEPTED AND AGREED TOI
DUNKIN' DONUTS INCORPORATED
B~~~
DI'/ld B. HtIIIr
DlrIdOf of DevlIopmIril a Q...A..
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WHEREAS, CHESTNUT ENTERPRISES, INC" hereinafter referred to as
"FRANCHISEE", and DUNKIN' DONUTS INCORPORATED, hereinafter referred to as
"DUNKIN' DONUTS", have entered a Franchise Agreement under which FRANCHISEE
operates a DUNKIN' DONUTS shop at 1186 Ha; "I{e, Carlisle, Middlesex Township,
Cumberland County, Pennsylvania, and also a DUNKIN ' ~ .....op at 930 Walnut Bottom
Road, Carlisle, South Middleton Township, Cumberland CoumJ
"Janla; and
WHEREAS, the parties to this Addendum are aware that .-:~. IISEE shall also
. ?tZ'U>,
operate at the same premises a separate business designated "JERRY'S SUB'~; ;01''', with the
consent of DUNKIN' DONUTS;
NOW, THEREFORE, IT IS AGREED by and between the parties that:
1, Notwithstanding the terms of the aforesaid Franchise Agreement, and any
documents accompanying or relating thereto, FRANCHISEE shall have the right to operate a
separate food sales establishment at 930 Walnut Bottom Road, Carlisle, South Middleton
Township, Cumberland County, Pennsylvania, without violating any of the aforesaid Agreements;
and
2. The aforesaid Franchise Agreement and accompanying or related Agreements
are hereby reaffirmed to the extent not Inconsistent with this addendum.
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IN WITNESS WHEREOF, the parties have hereunto placed their hands and seals
this ---1J -/fA.
day of May, 1993,
, ATTEST:
CHESTNUT ENTERPRISES
"c/Lf:,~ .~~f
Stilrley M, hestnut
Secretary
By W/U.. efv,~
~~~ Chestnut
President
ATTEST:
DUNKIN' DONUTS, INC.
BY~~
David B, Heller, Director of
Development & Operations
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4868\50/052692
EXHIBIT B
PIC ,j~8t/
ADDENDUM TO DUNKIN' DONUTS FRANCHISE AGREEMENT
FOR A SATELLITE UNIT (the "DUNKIN' DONUTS SHOP")
Type 0' Unit: X Satellite Can Kiosk Other:
Dateo'FranC~greement: ,/ 1-/--ll,.93
"
Franchisee: CHESTNUT ENTERPRISES , INC /
II
I
Addendum to Introduction: The Producing Unit \
Producta sold at the DUNKIN' DONUTS SHOP shall be produced In the DUNKIN' DONUTS Shop owned by
FRANCHISEE (or, If applicable, the panners or shareholders of FRANCHISEE) located at
l1A'; ntl"''''ofchll''*i Pilrp r.::Il"liR1Cl!. PA PIC 3695 (the -Producing Unlr), except as
Dunkin' Donuts may otherwise authoriZe and direct In writing.
Addendum 1.A.: Term
Within the second sentence 0' Paragraph l.A. 01 the Francblse Agreement, "twenty (20) years. Is hereby deleted
and "len (10) years. Is hereby Insened In Its place.
Addendum 4,0.: Grand Opening Promotional Program (Applicable only to Cart Systema)
" the DUNKIN' DONUTS SHOP Is a Can System, the words "Three Thousand Dollars ($3,000.00)' contained In
Subparagraph 4.0. are hereby deleted In their enllrety and replaced with .One Thousand DoIlara ($1,000,00)'.
Addendum 4,F,: Participation In Dunkin' Donuts Programs
The DUNKIN' DONUTS SHOP shall not be Included In the base of DUNKIN' DONUTS Shops 'or the purpose 01
determining the number of shops required to trigger panlclpatlon In markellng, aclvenlslng or other programs,
unlesa Dunkin' Donuts, In lis sole and absolute discretion, elects to Include the DUNKIN' DONUTS SHOP In said
base of DUNKIN' DONUTS Shops.
FRANCHISEE shall also panlclpate In and make additional payments to the Fund wllh respect to all aclvenlslng,
markellng and other DUNKIN' DONUTS programs as 'rom lime to time are supponed or required to be supponed
by the Producing Unit.
Addendum 4.G,: PlI'CInIIIlle Rent
Except IS herelna/ter.. forth, If FRANCHISEE (or, If applicable, the partners or sharehofdll'l of FRANCHISEE)
leases the Producing UIlt from DUNKIN' DONUTS Dr Its subsidiary, relaY sailS made from lhe DUNKIN' DONUTS
SHOP shall not be Included In determining parcentage renl, If any, IS defined In the Producing Unit's leaH,
Wholesale sales made from the DUNKIN' DONUTS SHOP will be deemed to be sales of the Producing Unit and
subJect to PERCENTAGE RENT and other charges under the terms of any I.... for 'the Producing Unit with
DUNKIN' DONUTS or lis subsidiary. In addition and notwithstanding the foregoing. FRANCHISEE shall pay to
DUNKIN' DONUTS or lis subsidiary any PERCENTAGE RENT and other cI1argll which DUNKIN' DONUTS or Its
subsidiary may be required to pay under any underlying lease applicable to the Producing Una, because of any
sales from the DUNKIN' DONUTS SHOP. FRANCHISEE (or, If applicable, the partners or shareholders of
FRANCHISEE) shall 8Xacute an amendment to the I.... for the Producing Unit In a form satJafactory to DUNKIN'
DONUTS or lis subsidiary Incorporallng the foregoing provisions.
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Addendum 5,: U.e Restrlcllon
FRANCHISEE convenants to uSeJhe DUNKIN' DONUTS SHOP only as a DUNKIN' DONUTS sales outlet during Ihe
term of this Franchise Agreement. FRANCHISEE may not service wholesale accounts or other outlets Irom the
DUNKIN' DONUTS SHOP.
Addendum 5.C,: Producllon and Transport 0' Product
The DUNKIN' DONUTS SHOP Is a non-producing DUNKIN' DONUTS sales outlet. Accordingly, FRANCHISEE shall
not, without the prior written consent 01 DUNKIN' DONUTS, manufacture or finish any product at the DUNKIN'
DONUTS SHOP, except as authorized or directed by DUNKIN' DONUTS. DUNKIN' DONUTS reserves the right, In
Its sole and absolute discretion, to require FRANCHISEE to manulacture, In whole or In part, and/or to "nlsh at the
DUNKIN' DONUTS SHOP products now or hereafter designated as approved 'or sale at the DUNKIN' DONUTS
SHOP, Products not manufactured at the DUNKIN' DONUTS SHOP shall be manulactured at the Producing Unit
and at no other place unless prior written approval Is granted by DUNKIN' DONUTS,
FRANCHISEE Shalltranspon products and supplies from the Producing Unit to this DUNKIN' DONUTS SHOP on a
schedule and In a manner acceptable to DUNKIN' DONUTS that ensures compliance with federal, state and local
regulation as well as DUNKIN' DONUTS' quality, freshness and other standards and that an adequale supply 0'
product Is available 'or sale.
Addendum 5,J,: Product and Vehlcl. Uablllty Insurance
FRANCHISEE shall also maintain a policy or policies 0' product IlabUIty, vehicle 11a1'''Ity, and non-owned vehicle
IlabUIty Insurance coverages, In the amounts set 'orth In Paragraph 5.J. 0' the Franc~ lreement.
Addendum 5,N,: C.rtaln Rlghle of Dunkin' Donute on Termlnallon
In the event the DUNKIN' DONUTS SHOP's location Is leased or licensed 'rom a third parr/. FRAt ;CHISEE shall use
Its best el/orts to secure Its Landlord's execution 0' the Lease Opllon Agreement. II FRAJ;:: " 3EE Is unable 10
obtain Its Landlord's execution of the Lease Option Agreement, FRANCHISEE shall execute and use its best efforts
to secure Its Landlord's consent (where required) to a collateral assignment of lees., Th. collateral assignment
shall grant DUNKIN' DONUTS the option to assume the lease or license In the event 0' FRANCHISEE'S de'ault
under this Franchise Agreement or theleese or license, If FRANCHISEE Is unable to obtain execution oIlhe Lease
Option Agreement or the collateral assignment of lease or If DUNKIN' DONUTS, In Its sole and absolut. discretion,
waives the requirement 'or these agreements, the 'oIlowlng provision shall apply, IU the explratlon or termination 0'
this Franchise Agreement. FRANCHISEE shall assign to DUNKIN' DONUTS at Its request any lease or license for
, the location. FRANCHISEE shall comply with all requirements 'or notice or consent under such 111II or license
and shall execute documents acceptable to DUNKIN' DONUTS' counsel assigning such lease or license to
DUNKIN' DONUTS, DUNKIN' DONUTS' rental payments shall be limited to those set forth In the asalgned lease,
license or other document.
Where th. sstelllte location Is owned 01' controlled 'In whol. Dr In part by FRANCHISEE (or the pann.rs or
shar.hold.rs 01 FRANCHISEE), DUNKIN' DONUTS has th. option, at the 8lIIfy termination 01 this Franchls.
Agreem.nt, to 111II the location 'or the duration 0' th. original term 01 thIa FranchlM AgrMment. DUNKIN'.
DONUTS' rental paymenlll u..undar wil be equlval.nt to th.n CUrTInt marklt value and shall be dltermlned by
agreement between FRANCHISEE (or the pann.rs or sharehold.rs of FRANCHISEE) and DUNKlN' DONUTS or, If
they lalto agrM, by arbllrallon undw the ruI.. oIth. American Artlftratlon ~.lQClatJon. The Intent 01 the above Is
to pr.serv. the DUNKlN' DONUTS SHOP'S location as a DUNKIN' DONUTS IIIIL1 outlet. at DUNKlN' DONUTS'
option, should the FRANCHISEE dlfaWt und.r th. Franchls. Agreement or any contract afIlCl1ng the operation 01
th. DUNKIN' DONUTS SHOP,
Add.ndum .A....: D.flult
FRANCHISEE shall he In dlfaWt under this Fl'Ilochls. Agreement If FRANCHISEE (or, If appllcabl., the partn.... or
sharehold.... 01 FRANCHISEE) falato comply with all the requlrem.nts Imposed by the Franchise AgrMmenI for
the Producing Unit.
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Addlndum ',A,5.: DI'ault
FRANCHISEE shall be In de'ault under this Franchise Agreement n the Franchise Agreement 'or the Producing Unn
Is terminated.
Addlndum g,8,3,: Cur. Period
A thirty day cure period shall apply n FRANCHISEE (or, n applicable, the partners or shareholders 01 FRANCHISEE)
'aUsto comply with any 0' the requirements Imposed by the Franchise Agreement lor the Producing Unit.
Addandum g,8,4: No Cur. Plrlod
No cure period shall be available" the Franchise Agreement lor the Producing Unit Istlrmlnated,
Addlndum g,F,5,: Dunkin' Donutl' Option to Purcha.. Clrt SYltlm
II the DUNKIN' DONUTS .SHOP Is a Cart System, at the expiration or sooner termination 01 this Franchise
Agreement or be'ore FRANCHISEE accepts a bona lIde written oller to purchase thl Cart Systlm Indaptndent 01
thll franchise, DUNKIN' DONUTS shall have the option to purchase the Cart System /rom the FRANCHISEE 'or an
amount equal to the original cost 0' the Cart System (Including freight and sales tax) IlISI 1.67% thereof lor each
month the Cart System has been In operalion. DUNKIN' DONUTS may deduct from this payment any amount due
DUNKIN' DONUTS Irom FRANCHISEE. I' DUNKIN' DONUTS exercises the loregolng option, FRANCHISEE shall
prompUy deliver and convey to DUNKIN' DONUTS marketable tlUeto the Cart System 'ree and clear of all liens and
encumbrances. on payment of the amount determined In the manner descrfbed abov.,
FRANCHISEE shall prompUy notify DUNKIN' DONUTS and provide DUNKIN' DONUTS wllh.a copy of any offer to
PUrcha58lhe Cart System Independent of this 'ranchl58 which FRANCHISEE deslres to accept. DUNKIN' DONUTS
shall have forty-live (45) days within which to exercise DUNKIN' DONUTS' purchase option hereunder, Should
DUNKIN' DONUTS not exercise this option and the terms of Ihe unaccepted offer be altered, DUNKIN' DONUTS
shall, In each Instance, be notllled of this changed oller and shall again, have forty.flve (45) days to purchasa on the
altered terms. Should DUNKIN' DONUTS not excerclse this option, the tanna of Paragrapha 10,C.2. and 10.C,3.,
Including the Addenda thereto (as applicable), shall apply to any transfer which may be contemplated,
. At the expiration or sooner termination of this Franchise Agreement. " DUNKIN' DONUTS elects not to purchase
the Cart System, FRANCHISEE shall prompUy deldentlfy the Cart System In the following manner: remove the
canopy and canopy structures. remove and destroy all DUNKIN' DONUTS trademarka, S8lVtce marks, trade
names. advertising, commercial symbol.. product labelling systems. sign faces. display trays and other Items
which DUNKIN' DONUTS reasonably requlraa be removed u being dlslJnc:tlve and Incllcatlve of the DUNKIN'
DONUTS SYSTEM, end change the color scheme so that It does not conform to the thin current DUNKIN'
DONUTS color scheme. DUNKIN' DONUTS may enter upon the premlsa wiler. the Cart System Is located
without being guilty of traspaaa or tOlt to effect such d..ldentlllcallon " FRANCHISEE lallto effact such d..
Idlnllllcatlon wIlhIn ten (10) days efter the termination of the FranchIaa Agraamant. FRANCHISEE IhaJl pay
DUNKIN' DONUTS Iha rauonebIe COllI and expenses In ellectlng such de-ldlnll/lcatlon wIlhIn ten (to) days 01
FRANCHISEE'S raceIpt of DUNKIN' DONUTS' written request
Addlndum 10,C.2.: Transfer of the Sltllllte Unit
II . tranater, Ilona or togalhar with other prvvtous. slmultanlClUa or propoaad IranIfera, whither related or
unrelated, WOUld have the did of tranaftnlng an Interall of filly percent (50%) or mora of Iha franchIaa of the
DUNKIN' DONUTS SHOP or the IIlllly holding such /ranchlse. 10 someona other than an orlgInIl algnatory of this
FranchIsa AglHllllnl, the lollowlng provlslona shall apply, The proposed transfarea mUlt IItlsIy DUNKIN'
DONUTS' then current mutJ.unlt owner guJdellnes. have ownarahIp Intlrllllln . fUI producing DUNKIN' DONUTS
UnIt It the time of tranater (and c:onIlnuousIy lhtrae/ter during the tlrm of Iha transfarea'l Franc:hIII Agraemant 'or
the DUNKIN' DONUTS SHOP) which DUNKIN' DONUTS, In Its sole and abIolUll dlac:mlon. aulhorlzaa u the
Produc/112 Unit for the DUNKIN' DONUTS SHOP,
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ACKNOWLEDGMENT OF RECEIPT BY PROSPECTIVE FRANCHISEE
OF TIlE OFFERING CIRCULAR FOR
DUNKIN' DONUTS INCORPORATED
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The undersigned, personally and/or as an officer or. parmer of the proposed Franchise Owner,
does hereby acknowledge receipt of the "Franchise Offeri!Js_CircuIar For Prospective Franchisees.
(Y.E, '92, OS/27/92), for the fear ending February 29,1992, (as amended) Including all Exhibits
attached thereto: (A) FranchIse Agreement, (B) Addendum to Franchise Agreement for Satellite
Unit, (C) Addendum to Franchise Agreement for Producing Unit, (D) Adaendum to Franchise
Agreement for Commissary Production Facility, (E) DuDkin' Donuts Standard ~ulpment
Package Ust, (F) Lease of Dunkin' Donuts Shop (DDSL/7%/f12/88), (G) Lease of DUnkin'
Donuts Shop' (bbSL/12%/f12/88), (H) Lease option Agreement (3_'party), (I) Lease Option
Agreement (2 party), (J) Franchise Owner Development ~eement, (K) EXclusive Development
Agreement, - (L) EXclusive Development Program DeposIt Agreement, (M) Dunkin' Donuts
Approved Manufacturers Ustlng, (N) MIster Donut Conversion Agreement, (0) Dawn
Conversion Agreement, and (P) DDU Pre-attendance Letter and Waiver at the first personal
meeting with Franchisor's representative but not later than ten (10) business days beTore the
si~ng or any Franchise or related Agreement or payment of any money. Delivery and recelJlt of
saId document is for the sole purpose of complying with The Trade Regulation Rule of The
Federal Trade Commission and aoes not obligate the undersigned in any manner,
Shop Address: 930 Walnut Bottom Road, Carliale, PA
. /5? 00 k')OU{M/A/~ &.t1P IPDNJ
Address (dOrDlClle) 1// (:W VI/..I...t. f.1A. 17dt/ I
~~ tlc CLh~
ress orDlClle)
Signed:
Name (Please pnnt)
Signed:
Name (Please pnnt)
and as an officer(s) or partner(s)
of CHESTNUT ENTERPRISES. INC,
a ( ~~!!!!.!!.l!J.vania corporation)
( partnership)
IndIVIdually
Address (dOrDlClle)
IndIVIdually
Address (dOrDlClle)
James K. Schreiber
Delivered By:
fI~~
2, Copy For Franchisor (Home Office Legal Flies)
UPDATES INCLUDED IN TIllS DOCUMENT (IF ANY):
FI'C PROSPEcruS
Y,E.'92 OS/26/92
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~ Receipt for
CertHled MaD
---= No In.urane. Coveregl Provided
Chestnut EnlerprUa, IDe,
Ua Dunkln' Donuts
930 Walnut BoUom Road
Carlisle. PA 17013
...- .
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I CIte. .net ~'. Addr'"
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UII MAll.tT STIIIT
THlaTY.rIfTH ,LOOI.
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,ltiNIVLVAN1A lllOS
ABRAHAM PRESSMAN & BAUER P.C.
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~~ICloate.Jr...
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..... 5, SpaIdlaf
~t.C.ahda",..
Dcl>onhS. Woloo
Bocmie R. Love'
We fbh...
8ui1 C. Koudelil'
CoRlWUlRC T. Foumaru'
[w~u A. Kllphowe'
Sell L Dwkln'
(115) S69-9'l9O
(BOO) tr.MPNB
FAX IllS) ~7t
_IllIIIIIS1_ 9798
OICouolol
..........11._
_ea.-I
W.....S'SpoIdIq
.- reply... PhlIaddpbla
October 25, 1994
Also member.
. New Yorlr. Bar
. NcwJerwrBat
. M1nDnota Bar
. D,C. Bar
. norida Bar
"GeorJia. YU"'jfinia
aod O,c. &n only
Chestnut Enterprises, Inc,
t1a DuuJdnI DODuts
930 Walnut Bottom Road
Carlisle, PA 17013
NOTICE TO CURE
NOTICE OF DEFAULT
Dear Sir/Madam:
We represent Dunkin' Donuts Incorporated, successor to Dunkin' Donuts of America, Inc., and
Dunkin' Donuts of Pennsylvania, Inc. This letter constitutes written Notice to Cure and NoIicc of
Default under your Franchi~ Agreement and Lease or Sublease Agreement with our clients,
Should you fail to make timely payments or submit fmancial statements as required by your
Franchise Agreement, your Franchise Agreement and Lease or Sublease, if you lease your shop from the
Company or one of its rental subsidiaries, may be tenninated. -If you arc among those franchise operators
who have accepted the Dunkin' Donuts .Contract Renewal Offer,. or if your Franchise Agreement
incorporates by reference a Dunkin' Donuts .Contract Renewal Offer. that has been lICCCpted by a
previous franchise owner, please note that a failure to cure the foregoing Notice to Cure/Notice of
Default within thirty (30) days of its issuance may constitute a basis for canceling the renewal rights
granted you under the Contract Renewal Offer, Accordingly, please take notice that if you do DOt cure
the Notice to Cure/Notice of Default within thirty (30) days, your right to renew the Francil1se
Agreement and Sublease may automatically, without additional notice to you, be canceled or revoked
pursuant to Paragraph I.g of the Contract Renewal Offer,
Kindly pay the following amounts upon receipt of this letter. Should payment not be m:civcd
within ten (10) days hereof, our client may initiate all appropriate legal action of all remedies, which may
l.&bIch vanr, ~
II'NonbSnmIb_
AlIoa-. PA 11101
ellSI 451.0100
Now JonorDlllot
11-....
Qlono HILIIJ-
1_7911I715
,
ABRAHAM PRESSMAN & BAUER P.C.
0ct0Nr ZS. 1994
P.,. Z
include legal action 10 evict you from the premises you lease from Dunkin' Donuts ofPcnnsylvania, Inc.,
and tcnnination of your Pranchise Agreement with Dunkin' Donuts Incorporated.
lTmr1
AMOUNT
Adv Pee
Pran Pee
Collection Fee (this letter)
1,241.25
1,216.41
100.00
$ 2,SS7.66
TOTAL AMOUNT DUE:
Please forward your payment imml'1lilltl'ly 10 Dunkin' Donuts Incorporated, Box 317, RIndolph,
MA 02368, attention: Carol Bowman, Collection Coordinator.
This letter is based on infonnation as of September 30, 1994,
If you have any questions, please call Ms, Bowman at (617) 961-4000, This is a very serious
matter and we urge you 10 give it your first attention.
Very truly yours,
ABRAHAM PRESSMAN & BAUER P.C,
~ ~ I .
By: e-t/1 /d-t'j ~
. .- Arthur L,~man
ALP/amg
PC: 2684
CERurllID MAIL - RETURN RBf~""11'f REQUESTED
cc: first-class mail
Carol Bowman
Gerald M. Conklin
James E, Haigis
Copy also sent 10:
Chestnut Enterprises, Inc,
1186 Harrisburg Pike
Carlisle, PA 17013
~'.
1111 ""."IT STIIIT
TH..Ty.rUTlI floOOI
'HILAD&L'HI"
,iNNSYLVANIA 11105
ABRAHAM PRESSMAN & BAUER P.C.
^ , r {J R N t. V S'
RIchard p, Abnlwn
Anbur L PmImaD.
JlDben G,IIa.....
CrIll R. Tnaen......
WIllIam w, !lpaIdlnI
J'*JlhSch.........,
J. Samuel OwaLc.Jr...
WlWaIn HUd.enbruui'
...... S, SpaIdInr
Maryua Mahda'ri"
Debonh S. Wdlt
Bom1ie It. LoYc'
We fbh'"
BuU C. K.oudel1l'
Conawninc T. Founwil'
EWfflt A.lWphoUle'
Neil E. Durkin'
(IIS)~
(BOO) m-APNB
PAX (IU) ~72
DIm:.DlaI (m) _ 9798
OfCoIll1ld
IIaahcw II. InUtdn
Salio<CoulueI
w...... 8. SpoIdlq
,-"p1y 10 Philadelphia
October 2S, 1994
A1Io member.
. New York. Bar
. NcwJctlC"fBar
. Mlnnnoca Iar
. D,C. Bar
. Florida Sar
"GcorwiAo VlrJinia
andD.C. Ban only
Chestnut Enterprises, Inc,
tJa DunkIn' Donuts
1186 Harrisburg Pike
Carlisle, PA 17013
NOTICE TO CURE
NOTICE OF DEFAULT
Dear Sir/Madam:
We represent Dunkin' Donuts Incorporated, successor to Dunkin' Donuts of America, Inc., and
Dunkin' Donuts of Pennsylvania, Inc. This letter constitutes written Notice to Cure and Notice of
Default under your Franchise Agreement and Lease or Sublease Agreement with our clients,
Should you fail to make timely payments or submit fmancial statements as required by your
Franchise Agreement, your Franchise Agreement and Lease or Sublease, if you lease your shop from the
Company or one of its rental subsidiaries, may be terminated, If you are among those franchise operators
who have accepted the Dunkin' Donuts "Contract Renewal Offer," or if your Franchise Agreement
incorporates by reference a Dunkin' Donuts "Contract Renewal Offer" that has been accepted by a
previous franchise owner, please note that a failure to cure the foregoing Notice to Cum'Notice of
Default within thirty (30) days of its issuance may constitute a basis for canceling the renewal ri&hts
granted you under the Contract Renewal Offer. Accordingly, please take notice that if you do not cure
the Notice to Cum'Notice of Default within thirty (30) days, your right to renew the Franchlll/'l
Agreement and Sublease may automatically, without additional notice to you, be canceled or revoked
pursuant to Paragraph l.g of the Contract Renewal Offer.
Kindly pay the following amounts upon receipt of this letter. Should payment not be received
within ten (10) days hereof, our client may initiate all appropriate legal action of all remedies, which may
LehiP v.ur, omc.
IIVNonh_th_
AllmWWtl. PA 18101
(lIS) 457.0100
~0tB'"
18 Eoa 1llDtI-
~.PAI7l101
(717l19~5B5
New Jaw!' 0IIIca
81__
Cbcn'r HIlL 19-
(601\ ~77B
--.
'('
~
P D1b "lIID 1113
. ~' Receipt for
Certified Mall
- Nn In_..rArM-A Cov.raae Provided
Chestnut Enterprises, Inc.
Ua Dwtldn' Donuts
1186 Harrisburg Piko
Carlisle, PA 17013
...- $
c.nlf_ f..
SpecillOtlivefV'"
ftn1rc1*t 0ItNery fee
- Return ,,~ ShOwIng
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-
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THIITY.rUTH 'LOOI
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.INNJVLVANIA UIOS
ABRAHAM PRESSMAN & BAUER P,C,
AlfURNt:VS ..
Rklwd p, AbnIum
Anhur L Prnaman.
.......,G,_
CraIe Il. TI'KLCnbcl'l'
WU1Iam W, Spaldinl
Jooepb SchUl1JllCh.,
WU1Iam IIildenbnnd'
__ 8. Spoldlnl
IIuyam IoWulavl'
Deborah S. WdM'
Boa.nie a. Lcwe'
LaDe fbhcr'
ConIwuiDc T. Foumaril'
E_AlWphowe'
Neill. Durlrln'
Jdlroy Zucke,'
(11S)_
(800) II'MPNB
PAX (11S1569-4S71
Illnct Dial (11SI_ 9798
OlCowuel
_H._
AIldftwP.l.oewInF'
Senlor CouIlId
Wuren8.Spold1n&
PIaM reply lD Phlladelphla
November 22, 1994
Alto member:
. New York Bar
, New Jeney Bu
. D.C. Bat
, D,C. Buonly
Chestnut Enterprises, Inc,
Ua Dunkin' Donuts
930 Walnut Bottom Road
Carlisle, PA 17013
Re: Notice of Tennlnatlon of Franchise Al!reement and Sublease
Dear Sir/Madam:
Please be advised that we represent Dunkin' Donuts Incorporated, successor by merger to Dunkin'
Donuts of America, Inc, , and Dunkin' Donuts of Pennsylvania, Inc. On October 25, 1994, you received
written Notice to Cure and Notice of Default under your Franchise Agreement and Sublease with our
clients, for failure to pay sums due under said Agreement and Sublease, In accordance with Section 9,B
of said Franchise Agreement, Dunkin' Donuts of America, Inc. may terminate said Agreement after
seven (7) days of the date of receipt of written Notice to Cure if you fail to pay sums due, More than
seven (7) days have passed since you received said Notice to Cure and you continue in default for failure
to make timely payments. Accordingly, this letter constitutes written Nctice of Termination of the
Franchise Agreement with Dunkin' Donuts of America, Inc.
If you are among those franchise operators who have accepted the Dunkin' Donuts .Contract
Renewal Offer" , or if your Franchise Agreement Incorporates by reference a Dunkin' Donuts .Contract
Renewal Offer" that has been accepted by a previous franchise owner, please note that your failure to
cure the foregoing Notice to Cure/Notice of Default within thirty (30) days, your right to renew the
Franchise Agreement and Sublease shall be deemed automatically, without additional notice to you,
canceled or revoked pursuant to Paragraph I.g of the Contract Renewal Offer.
Please forward your payment immediately to Dunkin' Donuts Incorporated, Box 317, Randolph,
MA 02368, attention: Carol Bowman, Collection Coordinator.
New Jawr 0tIIa. 01 _ Rood . c...,., HID. N) 0lI0S4. (llOll) 7lI~r.s
WlIblnpm 0fIke -1000 PcnnIJIwaniaAWDU. NW'!ulte S5OO' WMhiacum. D.C. toooI- t2O'll U7.1517
ABRAHAM PRESSMAN & BAUER P.C.
NoHmlHr 22, JW4
'''' 2
This letter Is based on Information as of November I, 1994,
If you have any questions, please call Ms, Bowman at (617) 961-4000, This is a very serious
matter and we urge you to give it your fint attention.
Very truly yours,
ABRAHAM PRESSMAN & BAUER P,C.
By:
C\. ~ I\--
Arthur L, Pressman
ALP/amg
PC: 2684
CERTll' J..t;I) MAn.. - RETURN RECEIPr REQUESTED
cc: first-class mail
Carol Bowman
Gerald M. Conklin
James E, Haigls
,
Copy also sent to:
Chestnut Enterprises, Inc.
1186 Harrisburg Pike
Carlisle, PA 17013
P oLb cillO 217
.~ Receipt for
, Certified Mall
.. ~o In.ur~ Coverage Provided
Chestnul Enterprises, Inc.
tla Dunkin' Donuls
1186 Harrisburg Pike
Carlisle, PA 17013
-
.
Certdild f..
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.......ellel OIl...., ,..
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,H1LADILPHIA
'IN"SYLVANIA IlIlD!
ABRAHAM PRESSMAN & BAUER P.C,
AfTOKNlYS
Richard p, AhnIwn
Arthur L Prnamanl
RDbttt G. &ucr
Cnll R. Tnc....bof1'
WIIUun W, Spaldinl
Jooeph SCh.....her
WiWam Hi1cIenbnnd'
IIDI<r 5, Spaldinl
Mwyam Mahda\'t'
DcborUa S. Wri. .
Bonnie R. Love'
Lane Filbrr'
Corulanunc T. Fownaria'
E...... A. KIIph.....
Ndl L Durkin'
Jd....' Zucu,,'
(21&1__
(110O) !5APNIl
FAX (2Ul &69-U'/2
DIrcctDlal(IISl_ 9798
orc.wu.1
__ ItIRboda
- p,l.ocwinp<'
ScaIor Cowuel
w....... S. SpaIdlaf
Plnoe '"Ply 10 Philldclphla
November 22, 1994
Alto mrmber:
. New York Bar
. NewjrncyBar
. D,C. au
. D.C. a.. only
Chestnut Enterprises, Inc.
t/a Dunkin' Donuts
1186 Harrisburg Pike
Carlisle, PA 17013
Re: Notice of Tennlnatlon of Franchise Al!reement and Subl....o
Dear Sir/Madam:
.
Please be advised that we represent Dunkin' Donuts Incorporated, successor by merger to Dunkin'
Donuts of America, Inc., and Dunkin' Donuts of Pennsylvania, Inc, On October 25, 1994, you received
written Notice to Cure and Notice of Default under your Franchise Agreement and Sublease with our
clients, for failure to pay sums due under said Agreement and Sublease, In accordance with Section 9,B
of said Franchise Agreement, Dunkin' Donuts of America, Inc. may terminate said Agreement after
seven (7) days of the date of receipt of written Notice to Cure if you fail to pay sums due. More than
seven (7) days have passed since you received said Notice to Cure and you continue in default for failure
to make timely payments, Accordingly, this letter constitutes written Notice of Termination of the
Franchise Agreement with Dunkin' Donuts of America, Inc.
~
If you are among those franchise operators who have accepted the Dunkin' Donuts .ConlIaCt
Renewal Offer" , or if your Franchise Agreement Incorporates by reference a Dunkin' Donuts .ConlIaCt
Renewal Offer" that has been accepted by a previous franchise owner, please note that your failure to
cure the foregoing Notice to Cure/Notice of Default within thirty (30) days, your right to renew the
Franchise Agreement and Sublease shall be deemed automatically, without additional notice to you,
canceled or revoked pursuant to Paragraph l.g of the Contract Renewal Offer,
Please forward your payment immediately to Dunkin' Donuts Incorporated, Box 317, Randolph,
MA 02368, attention: Carol Bowman, Collection Coordinator,
NcwJcnr/ 0tIke. 6\ _ Rood. CIIcny Il1D. N) ~. (6091 N!l-a77S
WublDpm 0fIke' 2000 P~iI Avmut NW' Suiw -"00' WuhJ.ncUm. O,C.IOOO6' (!Ofl 887.1587
"
, .
, .
" ,
For
DDLOA-10/23/91
rOR HD CONVERSIONS
Use Where Franchisee
owns the Property
PC 3695
Carlisle, PA
DUNKIN' DONUTS INCORPORATED
LEASE OPTION AGREEMENT
Agreement made this a.s:..... day ot .J}u&WA , 19~, by and
between W, JOHN CHESTNUT AND SHIRLEY foI, CHESTNUT
-6- eerpera~iQR with principal ottices
at 1186 Harrisbura Pike , Carliale , Pennsylvania , (hereinatter reterred
to as "Owner") and DUNKIN' DONUTS INCORPORATED, a Delaware
corporation with principal ottices at 14 Pacella Park Drive, P.O,
Box 317, Randolph, Massachusetts 02368 (hereinatter reterred to
as "Dunkin"'),
WITNESSETH:
:p
Owner owns a certain lot or parcel ot land, with the
improvements sitllated thereon, located at 1186 Harrisburg Pike,
Carlisle , Pennaylvanis more particulary descrl.bed on Exhibit
A., attached hereto (the "Premises"), Owner has agreed to
develop the Premises tor use by Owner as a DUNKIN' DONUTS SHOP
under a Franchise Agreement between Dunkin' as tranchisor, and
Owner, as tranchisee. This Lease option Agreement is entered
into by the parties in connection with Dunkin's approval ot the
Premises as a DUNKIN' DONUTS SHOP and Dunkin's grant,ot a
tranchise to Owner, It is intended to provide Dunkin' with the
opportunity to preserve the Premises as a DUNKIN' DONUTS SHOP,
should the Franchise Agreement be terminated.
NOW THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS
HEREIN CONTAINED, AND FOR OTHER GOOD AND VALUABLE CONSIDERATION,
IT IS AGREED AS FOLLOWS:
Ii
~'\.
$.v-
1. GRANT OF OPTION: As an essential condition ot the
approval ot the Premises tor development as a DUNKIN' DONUTS SHOP
and ot the grant ot a tranchise theretor to Owner by Dunkin',
Owner agrees to provide Dunkin' with the opportunity to preserve
the Premises as a DUNKIN' DONUTS SHOP, in the event the Franchise
Agreement should be terminated. Accordingly, Owner hereby grants
to Dunkin' an option, exercisable as hereinatter set torth in
this Agreement, to enter into a lease tor the Premises upon the
same terms and conditions as are contained in the Dunkin' Donuts
Lease ot Land and Building Agreement attached hereto as Exhibit
B. Dunkin' and Owner agree that the term ot said Lease and the
rental provisions ot said Lease shall be those provided in the
Rider to Dunkin' Donuts Lease ot Land and Building attached
hereto as Exhibit C, Owner represents and warrants to Dunkin'
that Owner holds tee simple title to the Premises.
a.'
..
, .
~.
"
-.
2. TERMINATION OF FRANCHISE AGREEMENT: It the franchise
Agreement between Dunkin' and Owner is terminated tor any reason
during the term or any extension thereot, Dunkin' shall have a
period ot thirty (30) days atter Owner receives trom Dunkin'
written notice ot termination ot the Franchise Agreement, in
which to elect to enter into a new lease with Owner containing
the same terms and conditions as the attached Exhibit "A" (the
,"Lease"), Within rive (5) days atter Owner's receipt ot written
notice trom Dunkin' advising Owner that Dunkin' elect~ to enter
into the Lease, Owner shall execute, acknowledge, and deliver
such Lease to Dunkin' and upon its acceptance and execution by
Dunkin', owner shall deliver possession ot the Premises to
Dunkin', tree and clear ot all rights ot any third parties,
whatsoever,
:p
3. EXPIRATION OF LEASE: It the Lease contains renewal
rights and is allowed to expire by Lessee without exercise ot
said rights, Lessor shall give written notice thereot to Dunkin'
within three (3) days tollowing expiration and Dunkin' shall have
the right but not the obligation tor an additional ten (10) days
tollowing receipt ot said notice to exercise said renewal rights
on the same terms and conditions as contained in said Lease. It
Dunkin' elects tu continue the use ot the premises as a Dunkin'
Donuts Shop, Dunkin' shall so notity Lessor in writing whereupon
Lessor shall promptly execute and deliver to Dunkin' an
assignment ot said Lease and possession ot the premises tree and
clear ot any rights ot Lessee or any third party.
4, GENERAL PROVISIONS:
A. Owner hereby designates and appoints Dunkin' as its
agent to execute any and all docnments and to take all action as
may be necessary or desirable to ettectuate the pertormance ot
any and allot Owner's duties under this Agreement in the event
ot termination ot the Franchise Agreement. Owner agrees to
peaceably and promptly vacate the Premises and to remove its
personal property theretrom upon receipt ot DUnkin's written
notice ot its exercise ot the option herein granted, Any
property not so removed within ten (10) days tollowing receipt ot
such written notice shall be deemed abandoned.
~,~
.v....
,
~'
-.
B. Dunkin' shall not be required to begin paying rent
under the new Lease until delivery to it ot possession ot the
Premises, tree and clear ot any rights ot third parties. Dunkin'
shall be entitled to ottset against rentals under the new Lease
all amounts required in order to cure Owner's detaults under the
Franchise Agreement.
C, Dunkin' may assign without recourse its rights under
this Lease Option Agreement or its rights under the new Lease
~ithout the consent ot O~ner, provided that the assignee shall
, ,
... '
2
.'
-
;p
j.
.,.....
execute and deliver to Owner an assumption agreement by which the
assignee agrees to assume the new Lease and to observe the term.
and conditions and agreements on the part of the lessee to b.
performed under the new Lease, Dunkin' may sublet the premis..
or any part ther.of without the cons.nt of Owner.
In the event Dunkin' shall .l.ct to assume the L.ss.e's right.
and obligations under the L.ase, Dunkin' shall have the right, at
any time aft.r thr.e (3) years as tenant, to t.rminat. the L....
by givi.lg Lessor at least one hundred twenty (120) day. written
notice. If Dunkin' shall ex.rcise this right of t.rmination,
Dunkin', aft.r remOVing its equipment, trads fixtures and signs,
shall return the premises to Lessor, allowing to remain thereon
all of the Lessee's and DUnkin's improv~ments to the premise..
5. DE-IDENTIFICATION: If the Franchise Agreement is
terminated and Dunkin' does not elect to continu. the Premise. as
a DUNKIN' DONUTS SHOP, Owner agrees to de-identify the Premises
as a DUNKIN' DONUTS SHOP by promptly removing all signs, logo.,
trademarks, insigniae, decor and other items which Dunkin'
reasonably requests to be removed as being distinctive and
indicative of a DUNKIN' DONUTS SHOP. If owner fails to effect
such de-identification within (10) days after DUnkin's request
therefor, Dunkin' may enter upon the Premises to effect such ds-
identification without being guilty of trespass or tort and may
bill the Owner for its reasonable costs and expenses in effecting
de-identification of the Premises, In the event Owner does not
pay Dunkin' within fifteen (15) days after Owner's receipt of
DUnkin's demand therefor, Dunkin' may place a lien Upon the
Premises in the full amount of such costs and expenses.
6. REMEDIES AND ADDITIONAL PROVISIONS: This L.ase Option
Agreement shall run with the land and be binding upon the parties
hereto and their successors, assigns, executor. and
administrators and representatives. The rights and obligation.
herein contained shall continue, notwithstanding Change. in the
persons or entity that may hold any leasehold or ownership in the
land or building. At the request of Lessor. or Lessee, Dunkin'.
rights hereunder may be subordinated to the lien of any mortgage
or deed of trust hereinafter placed upon the premise., provid.d
that the mortgage. or trustee shall agree in writing to
recognize, honor and not disturb Dunkin's right to exercise the
option and assume the Lease as set forth in this Agreem.nt. Any
party hereto may record this Agreement. Any party hereto may
seek equitable relief or injunctive relief inClUding, without
limitation, specific performance for actual or threatened
violation or non-performance of this Agreement by any oth.r
party, Such remedies shall be in addition to all other right.
provided for in this Lease Option Agreement or by law.
7. NOTICE: All notices hereunder shall be sent by
certified mail, return receipt requestod, to the addre.ses h&rein
tv....
I
It',
.,
"
-.
3
::
STATE OF ~ )
COUNTY OF ~ad l SSI
On the ~",-DL day of It._ . , . J , }tJtJ~, betore me came
w, John~i:hestnut ~ aiid'Siy that he is the
individual described in and who executed the foreqoinq instrument
and acknowledqed to me that he executed he same, before me,
l
NOTARIAL SEAL
\lERLEI/E !.lI>oRHEVKA. I/fI'" """I.
C'I'II".. Cumberlln' Ctltftll. PL
iJ.1 1..""'I1'.I..I.n bplr.. &17194
Expires:
STATE OF ~
COUNTY OF ~~
55:
On the 1:05' u... day of
Shirlsy H. Chestnut
individual descr bed n an
and acknowledqed to me that
, (c;lq~ before me came
and say that he is the
who executed the foreqoinq instrument
e executed t e same, before me,
Expires:
NOTARIAL SEAL
\lERLEI/E !.lI>oRHEVKA. I/.t", !'1lbII.
C.rll.I.. Cu"borllnl C...t1, PL
110, C,,,,,I..I,n E.plr.. 6/7194
.v....
COMMONWEALTH. OF ~ )
) SS:
COUNTY OF~ I
On this the ...:rl;;;:'day of {fJ~ , 11';> b-betore me
came David B. Heller and say that he is the
Director of OUNKIN' OONUTS INCORPORATED and
executed the foreqoinq instrument, that he siqned his name
thereto and affixed the seal of the corporation and has delivered
a copy of this instrument to the other party in accordance with
the order ot the Board of Directors of said corporation, before
l ./ 1~b.:~ g: l ~/t'77.E7
~~ PUbl~C ?: hI
My Commission Expires: //-p-)1~
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SHOUN R lCIIARO 1I0LLEl/MUGII, also known as R lCIIARO L. 1I0LLENBAUGII and
S. HARlE ItOLLENBAUCIl. hi, wife, of North Middleton Tl,)wnlhLp, Cumberland
County, Pennsylvonia hereinafter
c,.".., ~
.oJ W, JOliN CIIESTlWT and SIIIRLEY H. CIIESTNUT, his wife, of Low.r
Hleflin Township, Cumberland County, Pennsylvania, hereinafter
C"/ll,,1 I
1I'lr.v#....."i#.'1I1.'Ad""'ollurl",lIll1ltJ! One ltundred ninety Thousand and 00/100-----
_n___n__ nu_____n____uunn_u_____( $190,000.00)------ 0.11....
'" 1t",,,1 "111'/. ,II, "'''t'' 10 ",,,n!1I Il",h,. .,,,,,,,..l,d,,,l, ,,,, foul <<,.,uo, s J. ",,,6, I"'" .,,~ """1
"",.,.....1",..""',.. their hctu and assigns 41 tenlnts by the entireth..
AI.I. thnt certain porcel of land and the improvements thereon
sltuated in the Township of Middlesex County of Cumberland and
State of Pennsylvania more particularly bounded and described a.
(allows:
BEGINNINC at a point on the north side of U.S. Route 'II,
Carlisle Pike; thFnc~ by the line of land now or formerly of
Corinne Keirn N 22 06' W 136.90 feet to a point at land now or
furmerly of Paul O. Sunday~ thence by same N 67. 34' 09" E 217.16
feet to D point on the west side of North Middlesex Road'[ thence
by same S 24. 45' E 95.34 feet to a point of a curve, .a d curve
connecting the west side of Uorth Middlesex Road with the north
.ide of U.S. Route '11. Carlisle Pikej thence by .ame havinB a
radiul of 40.0 feet, an arc length of 64.45 feet to a point. on
the north side of U.S. Route Ill, Carlisle Pikej thence by .ame S
61. J4' 00" 1/ 181.84 !eo, to the place of boginning.
The party o[ the [irlt p3rt expressly reserves. Dnd this
conveyance doel not include. the right-of-way easement. recorded
in the Cumberland County ttiscell.3neoul Records in Book 81 at PI.e
HB snd in Book B) a~l&,~~9h:. 105 (CONTINUED ON REVERSE)
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n,i. conveyance i. made lubject to .11 other covenant.
conditionl, reltrictionl, ea.emenll provilionl, exclptton. and
rllervationl, if any, contained if former inltrumentl of record.
Together with all the right. title and intlrelt, if an~, of the
Crantor, in and to all land lyinS in aU ,treeta and hl&hwaya
abutting on or appurtenant to 181d premilel.
BEtNe the lame premile. which Hobile Oil Corporation, by deed
dated H~y 22. 1986 and recorded in Cumberland County Deed Book C.
Volume 32. P3ge 97~, granted and conveyed to Richard Hollenbaugh,
one of the Crantorl herein,
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Richard Hollenbaugh. alia
Hollenbaugh.hi. vife,
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known .1 Richard L.
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'IICI ftOt IeUlftl,ft 15I:X100Q "'1ft relOlCllO "'I1Il"e' 01 ONIftIWf*IId 11'I any one KelClWll.nd 11'I IN &mownl 01 not
I... than StlODO...,. '..oecllO dam.OIIO~;
l)J To liMO 1ft. ~MIUS Ill" 9QCllI Old.... '''If and CCWIdItlOft.. the 11m. ""Ift .1 IN COl'IlmetlC'e-o
"*" of ....1."., 01 m.y ~ 1M on 1Mr..1t.... h'*lt tot PMIOI'\aOIf"", and "'" csa""911 ",.lI/tIl'If Iftlnl "'" 01 0CMf
C'1lII1ty and dIM_ ,"1I1b", lrom lIltf.UII. try IN LlSSOR.
lei TOIlMOUl'IluidI"t onl~'9U'lIiOUOIdllllql br II........" hi"" ~...IOt... lII~
,..... CltlJ\'ldId. ~.I".t 1ft IQ\ COoo/lI"',1'ICe ellll........ ,*",,"ed:
1<<It To lilY wMn dIIt Ute rePllltICI.. dlIPoes for ..let. OIl" electftclfy.NII ofI'I... III1/1t1t1. f\.mIlMd to U\e
PAlMISlS,
'.IToeG'llCllypl'D'llDtlYWIIfl..IIOCllICltll.I.....""...,..,...bOft..ordInanC...~.IncI~Pf1I
DlIOIlC .1IIfIotItle.. BoInst of FIre UnOIrwnI.... and IIINlat llfOIIIlUllotI. ..'*It 10 1.,..1l'le LlSSOA.. rnootI....
lor COl'IlCIIIaftC. ~ lIndII'lN 1>>'0\'I1Iotl.0I trill LMII;
In 'CIlia 0'1''''''*1 01 OIIK' IhI PREMIA!;
'01 To ".,.IN LISICIA """""1nCI1nderMll\ed flam and Iglllltlen., IftO tlllnjllry,'" ClIlm. dIm-
'01.01 IIlD*fYM ioN I'IIQIICIPf1II'Mt LlS5111nd nac $.II 10"" NCllIdOl N LlSSOf\ to.,.., DItIOfl 01 ~
...... 011 N PRlMlIIlI; and
IfII AI 1M........... Pf1IIN1 LM-.Io t'IfftOWe.....1nd IlIKtIInd to DMCM&lly rIeId UII N PRe-
l,t!SlIIrl.. gaadOtdlt.tW*IfICICI:lnlIIIan.. NIIIM....., fta1'8bllftlll II "'eoIM1l.,.._.~ltOl .,......01.....,
be owe IrI ...,..,. .... tar ,..."... ...,.., ..... lItIlI'Id diII/NgI ,..,.,. "'" In 01-' CUloIMW' and dam-
..,.,..,... frarn..... tJf'.... LEUCA. AI 01 ClftCW lei IM..,.,..acn 01 1M term. 01 tar IfWty 13lJ deYl.ltwlN
1OClIW...........1lnaC... Lissa Iftall ""-Wlt""1O rwnow. tll ~... andlQUlClllWlllMtalell try of
01 an III .....1l'Id ... ....... IN "'10 ttrl'lCM 01 CNngI My PIl1IQIW fMtuNI all... PfllIMIII wfIiCl'llN.,
be dlllraWllOIa 0l.nlW Darw.lta SIloa. ~of........ 01 ClllrlCterOlIMllUDan 10 1M,...., lIIllla-
tlll't& ....1nCI~..OIImed.I..llmllllObII~ CWCOIPfyI.Pl'O'tldIdltaltftYdIIIftIo-caIIMd lJy
.ftylllCf'l ,.,....arCf\engllll\lllbll ~tannwlatD'("'L&SSUIlItIUOlftM,
'- Tll.LEssaan.lIl.......nQrIt...",lImIIlOlIfwllNII;lIIt~.. x..' In,-
in II '
L. ,~ 1111itl1'~1 . II'. I ~1I'1I1 .-~"iiI1 ~1~'" I .,~.'I'.Jl.
. -I ~ "',..ra 1''' IV. 1'". JI (1111II. ......".,IUCft--..on
Uli. Laue ......I~ II I'lcI4t IhIIImllftdan dIIe... "'dill ~ ftItd 1I".-wI of........
10. 'MItIauItrle COIl.... of !nil LlUOR.... LUIlIINI.... IN,... from 11IM...... to dO MY ClNQI
men of.... ~ W .....1tI1rr1................. UtI...., IN...... encI QlI,..........,..,.... 01 ""
1*'1 '*-It. DPOWIdId. ~.1tII11ft dll.CfllP\llaftCel... LlSIU """,.,...,. ___liar.,. DIYIN"t 0111 ~
~lObe&*d"""ltICIliarlM C*farmItw:.d altenn.. cow.nAI'ItIancllCO'IOtlcln...... ~Ity
me LIssa
It. ,.. Tlle LUIOA ,""W" LUSU..." of h NfuulIO ClloRf'IUI.... PAlMlIIS..IhI...... ~
andlMlllft'" .......1eml..llrIMlIlllN andCll:lnCltlON...".. beClClrlCalnldIft."., Wl'7lterlbotIe bolfwtarNDlIt-
CIIIMII'IIrIIaI1llfIICft.,. USSOA """ II '"' tlPI'llI duMllhI..... at "" LMM. 01."., utenllCln .....,..Dt rw:t
1lllt.....101CC4IOl TN LUSOA.........UIILUSDlII'lftMlll:lIaollloflhl*"'..CIn:/'IPIIlClMIInlICIllI'tdIIIDM
CClPltIIl'Ied In My IUCft Dona l'de oltIir Ind alnll ClClO'Y .....-.11 LUaU 10 ~ ancIIlhI LUlU .....""we
rwetIty 1m de,. ~ and.,. rM *"' OI.lICtl ftlM:e1n 'Iff'lICft1O hM:llllllUCIl ~".,. LIsalil ,.......,...,.'
ClIII&ICh ft~...... MId 2Q.dIy PMOllII'II LlSSOA may... lie LUIClff.InI.... 1ft" PRDIIU UGOIllN
ltnl'lt 01.....__. blA".... LlSSOA doeI not dO 10 'IIIIIINft ~,.., .ltIttanlW\lDotl d MIll 2lHIy PMOll "'.
L.USOA 11I11I not......rter MIl N PREMISES WIthOut."", ftrat Cllf-'"IIhI PAlMISI! to 1M LISSIE D\Il'IU&Il'
laIlttlP".,,1CIlI "
IDI ...........,. ".1 1 rll'1
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COUHT"t "" $I
Co... ..,,, .. -........
IaIM IlftOWI\ 'Illf\a. -ftI duty ewam,CIld.,..........' .".., "'" III oMcw 01... eotpllI'I/IJon ..1Ct!OM1fI......_1IW.....,.".
",.NftetlllN'''' I'f"" /II, NlIN',*,IG.1Id ,,,,..." MIl 01".. c.,..,._ 11WI,... ___. c_ 01 ""..........,,,,,..,,..,
"."., 1ft KCOfGIIItC...m fill OICMI 01 "'" 8011'1I 01 00<<10-1 OI....clltllGt.fNwt.lflt.. __WIOlIIl 0HCII0ICI1fl _.no ,..cut.1It
klrl9OlfltlllttNm""ancI~.~to"""I""I"".lICutldlf\e......'.OtfOftM
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l"1ftltNrOlrty I' an_'tIOIIaI..10.... o.ttlcroN OIttrleltlllCll.~ IftCIr.mowtI"'~
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corocnllOft I'I'WI"I ", onnc'- attic, 1ft ,..l'\dllIOft, ....NK"uMft. ItM MLlSSlr1,
LIQAL DUCAIPT10N INCLUDINClIIIORTaAOl1. IUIIIIMTI. CONomoMl. UMfTAnoM8
AND RaTJIICnOHl 0' R.CORD UP urn
SEE DEED ATTACHED,
-
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.
lerceDtaqe ReDt
The LESSEE turther agrees to pay ths LESSOR, tor sach LEASE
YEAR, ths amount by which twelve (12\) ot GROSS SALES exceede
the amount at BASE RENT paid or payable during the LEASE YEAR.
The LESSEE turther agreee to make advance monthly paymente ot
such PERCENTAGE RENT on the titteenth (15th) day ot the month
immediately preceding the month tor which euch rentale are due
in an amount equal to one-tweltth (1/12th) ot the amount by
which twelve percent (12\) ot the GROSS SALES in the preceding
LEASE YEAR exceeds the BASE RENT tor the current LEASE YEAR.
In anticipation ot additional yearly rentals under the terms
ot this paragraph, the LESSEE agrees to deposit with the
LESSOR, during the tirst LEASE YEAR ot this LEASE, not later
than tittsen (15) daye atter the cloee ot each LEASE MONTH,
the amount by which twelve percent (12\) ot the GROSS SALES in
the preceding LEASE MONTH exceeds the BASE RENT tor that
calendar month.
(b) In the event this LEASE is terminated or assignsd to another
LESSEE prior to the end ot any LEASE YEAR, yearly rentals
shall be apportioned at the date ot termination or assignment.
4. (a)
(c) Whenever the GROSS SALES amount used to calculate an advance
monthly PERCENTAGE RENT payment is derived tram a period at
less than twelve (12) months, such GROSS SALES shall be
apportioned to an average monthly amount which shall be
mUltiplied by twelve (12) to retlect an adjusted annual GROSS
SALES amount which shall be used in calCUlating the advance
monthly PERCENTAGE RENT payment tor the subsequent LEASE YEAR,
as deecribed in paragraph 4.(a) above.
DetiDitioDS
(d) The term "GROSS SALES", as used herein, shall include all
sales made by the LESSEE in, on or trom the PREMISES but shall
not include cigarette sales, sales taxes or similar taxes.
(e) The term "LEASE YEAR", as used herein, shall reter to
successive periods ot 52 consecutive weeks commencing on the
tirst sunday the DUNKIN' DONUTS SHOP is opsn to serve the
general public, or on the next succeeding business day it the
DUNKIN' DONUTS SHOP is not open on Sunday.
(t) The term "LEASE MONTH", as used herein, shall mean the period
beginning on the sunday immediately tOllowing the last
Saturday at any calendar month and ending on the last Saturday
ot the next calendar month.
ADDual Sales Report
(g) The LESSEE agrees to turnish the LESSOR, within titty (50)
days tollowing each LEASE YEAR, a statement ot the GROSS SALES
tor such year. Any PERCENTAGE RENT due based upon such GROSS
SALES in excess at any amounts previouely deposited with ths
LESSOR, as provided above, is to be paid simultaneously with
the turnishing ot such statement. The LESSOR agrees to retund
. . . .,0
.
. .
to the LESSEE any amounts depoeited with the LESSOR, a.
provided herein, in excee. ot the total PERCENTAGE RENT due
ba.ed on actual GROSS SALES tor any LEASE YEAR upon receipt ot
the etatement ot GROSS SALES. LESSOR reeervee the ri9ht to
apply any retund outetand1n9 obl19atione ot LESSEE, it any.
J
.
(LESSOR)
WITNESS I
W. John Cheetnut
Sh1rley K. Chestnut
ATTEST I
(LESSEE)
DUNKIN' DONUTS INCORPORATED
,
Jack Lauderm1lk,
Asst. Secrstary
BYI
JlJ10f
_(1(1.23.1"
.13-82)
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930 Walnut Bottom Rd.
Carli.l., PA 17013
DUNKIN'DONUTS
CERTIFICATE OF CORPORATE RESOLUTION
AND CERTifiCATE OF INCUMBENCY
Corporalo Namo:
CHESTNUT ENTERPRISES. INC.
Tha und...lgn.d h...by cartlfla.thal hal.lho duly aloctad .nd acting _....ry oltha abova namad
corporation and koop.. of tho olllclal r.cord. and corporala ...1 01 ..Id corporation, and that tha
following I. a lru"'~nd corr.ct copy 01 thoJ..qlutlon. adopt.d by Ih. Board of 01_.. 01 aald
corporation ala moatlng duly hold on Ih. ~ day of 18 ~
af which maatlng a quorum wa. pr...nt and acting throughout and Ih uch "lOlutlona ha.. not baan
r.,clndad or modlfl.d and ar. now In full fore. and .1I.ct:
"RESOLVED, Ihlt thl. corporation .nl.. Into Iha lollowlng
agro.m.nt or agroom.nt. with DUNKIN' DONUTS
INCORPORATED or alflllato. or .ub.ldlarl.. th.reof:
FURTHER RESOLVED, thll any on. 01 the olllcora of fh.
corporation I. aulhorlzod and dlrect.d 10 ..acuto uld ag...
mont. on baholl 01 Ihl. corporetlon, .nd to appro.. any
modification., o.t.nllon., am.ndm.nt. or t..mlnatlon. 01
.lld agreom.ntllllny ..Id olllc.r mlY do.m 10 b.ln Iha b.11
Inl....I. 01 the corporetlon, nolwllh.tandlng Ih. facl that .uch
docum.nll aa am.ndod, modlflod, I..mlnat.d or a.landad
mlY dlll..lrom tho.. pr..ont.d atthl. mo.tlng."
I furth.r c.rtlfy th.tth.r.I. no provl.lon In th. Ch.rt.. or By-Law. ol.ald corporation limiting Ih.
pow.. of Iha Board 01 Dlrectoralo adopl tholor.golng r.lolutlonl, and Ihaf fha ..ma ...In conformity
with fho provlllon. 01 ..Id Ch.rt.r and By-Law..
I furth.. c.rtlfy th.lth.'ollowlng ar.th. namo. and offlclll.lgnalum of Ih. praMnlolllcaraof ..Id
corporation.
Prinl or Typ. N.m.
W. John Che8tnut
Praald.nl
h~~
,U".tj 7h (!f~L;;Y-
Vie. Pr..ldont
Shirley H. ChuBtnut
S.cr.t.ry
Tr..lur.r
DDICO""CI,n.,07,1I
~
::::~;~~t';
"'''DAVIT
alforo ml, thl undl"lgnld otllcer duly lulhorl1oc1 10 Idmlnlller oathl, potlOnally appaerocl
Shirley H. Chutnut to me well knoy!n.
who atter being by ml duly Iworn, dlpOll1 and "YI al follawa:
Thai, CHESTNUT ENTERPRISES, INC, la a Corporollon duly
orglnllocl under thalawl oflha BIIII 01 Ponnay!.anla ,and III Chartlr
or Artlclll of Incorporlllon or Ilmller documlnll pro.ldll Ihal III acllvlllll aro conttnad alclullvely 10
oporollng ona or moro Dunkin' Donull ShOPl, IIclnlocl under fronchllal Irom Dunkin' Donull
Incorporolld, a Dllawaro Corporollon, ha.lng III principal placl 01 bUllnal1 In Rlndolph,
MIUIChuIIIlI. /
Thl Corporlllon hullluocI and oUllllndlng , I/){)/ oha..1 01111
Caplll' Slock and Iha ownl" 01 Iuch Ilock and lhl Ihlrol hald by thlm aro allollowa:
Bhlroholder
~~j-
w. John Chestnut
Shirley H. Chestnut
Thl Dlraclora of thl Corporollon a.. u 101l0wl:
W. John Chestnut
Shirley H. Chestnut
Each Ilock clrtlllcala of tha Corporallon hal conlplcuoully andoraad thlreon thl following
1lIllmlnl:
"Thllhlrol reprelenled by Ihll certlflclle a.. held Iubject 10 a
Fronchlll Agreemlnt bllween Dunkin' Donull Incorporalocl
and II lublect 10 III rollrlcllonllmpolocl on lranlllra by IUch
Franchlll Agreemen\."
. IN WITNESB WHEREOF, I ha.1 hereunlo lublcrlbed my nlme end amlocl Ihe ..al 01 Slid
corporallon Ihll' Nt. dlY 01 ~ 19 ~
~11I.(!~ (SEAL)
Shirley . Chestnut. Secretary
NOTARIAL SEAL
\lERLENE lolARHEVHA. H.t"', PWIlc
Carllllt, CUfllbt,IIR' C.unt,. PL
Mr C..mtnllll.n EI,lr.. 617/94
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DlINKIN' DONUI'S INCORPORATED
LEASE OPnON AGREEMENT
AOaI!I!NI!Nr.......~..,"'~I9.fL"r.._ II. John and Shirley H. Chostnut
..c tndiG{duals .....................Clftica.. c.lo Dunkin
Donuts, 1186 Harrisburg Pike I Carlisle. PA
~_...~..
"'""~TnllT F.NTF.RPR I SF:S. I NC.
.. Pennsylvania
..................am.::... c/o Dunkin' Donuts. 1186 lIarrisburR Pike, Carlisle, PA
~ nIuIIlI eo.. ~ ... DUNXIN' DOMIf'IINCOUOMTPD.. DNRUI_. ........... ~ II 14 ....
hotDrioo,IO...m...........,.. --.....~_..._").
................eaT...............kaMd.. 930 Walnut Bottom Road, Carlisle. PA
(.............'),_..._"'....._- ""11 II .\a(...~
IorT_~_.. DoUIa'Ooo""_'___/ .19-,_DoMIa'.._.
"T_._("''''-~ 11._"'''''-11__._''- 1\11"-11_.....
~.... o..u.', ~ 01.. .... ~ . . o.MiI' 0... SkIp'" pull 01. ,....... to T...... It.......... eo proridI:
o.MII' 1M ~ IG ~ IM".......~. ea..... udlrdrr _A_......,..,..,.... ud._lMdIonI_
w_. -............... _ ..,_... "'T_ _... '-.......... "r DooMlo'...... ._,.- "'1M
....... II '.6- cf 1M ..... ____..... ---...... for................ .""- IM.........aIdaqol
.... II' ."..,... pudII.- It,....
SECnONI.GRANTOFO~ON
1.0 l.Mdbd ana. ta DtWia' .. ~ eo.... ... ........lkembed ~ UlI attIcW I!dIIk It. 1M... ..... CDUMII'"
__r..'''''(''''Oplao'j.
1.1 U,.. o.I.WI 01 Tcaw udu L&.t. lAdord IWI ... 1)Qkia' cap. 01 III .... 01 ..... II ... 10 T.....
_ - ..... - _ .. T...... U T_ ,.... .. _ .., _ _ ... poriod ....... .. ... I-. LudIaol ....
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T....... ...... .. .... ..... (&Ill -offtr-). LIIIlIbd IMII .Ndleo... Off" I u.p6IlI"" 01... L-.........,........ tMrIto.
Dukia'..... ..Kill 1M ~ v. aU. by wrina .ala to t.aadklcd... T-c (.... .~, wkUI dWtJ (30).,........ ....,. 01 tbI
0If"_~
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0<<., Dutia' .. ... . __ 1M T....... ....... ill 1M LeMa (lM -otr.". a....ac....... and . 1M O<<cr. CDItfIIIta CIJIl7' cl lM
La.. bIcWlq..,. ........1I u..mo. DukiIl' Mllluem. u.. Opca. v...... by wriu..... to l.MdIotd... T..... (1M 'Al:apt.uft,
-1Olny (llI)"" alter...... "'... 0If" 1_ ~
t.3 Upaa ,.......... 01 UIt t.a.. T.,.. If u.. ..... cm&IiIlI te.. ...... or....... ,..... ... 1M .... .. aDowd eo
.q>lra"rT..........' ............. rip'" LudIaolIllall""""JlII1"'_ _ ..._.. _'. INIIo .......IaU'....IOlny(llI)
..,. -. _... "'... "..... 0...... oW _... _ lor. _1Olny (llI)"""" -'PI _."__'"
T................... OIlIIII.... te... tal ClOMi~. CIOldIiMd ill UIIt I.&ML If Do.ti8'...IO....... riPt 10...... &lilt tmI 01
U......... o.MiIl'lIlIU 10 MldIy l.udbd ill wriu.,. ..,......lMdaard..... JI"*PdJ~ _lWhu to~.......... oI~'
.. .....oIT....I ud Mall ddMr,...... ollM ........10 DukiI'.. &IIIt---~1 01_ ~ or,.......... oIUW t.t..
SEcnON n. TENANTS COVENANTS
10 U T..... '.10 lime'" n,. .., deI.wllI IlOdIr 1M ....... Of ill... t\at clll~ cl UIIt r.-.- ~ T.....
.....wttWa In (10) de,. afterwnl.......... by o.n;a',..... all 01 ill rip!, tiUI MIl ill........ MIl IOtIIIt I..--.o-u.'. liT..... WII.
do 10 MUlls laid I.. (10) ell,.. T....' be"'" '*'pllII Dv.k!a'.. 1"",110 ....&11..,... aU........ qr._"'1o ....1I1CIIolI.
"'" . ...-., or ..... 10 dTtmaI&II ... ........ 01 dill ..... ... dill ,.......... 01 .., 1M 81 cl T....... .... ........,.
l.MdIotd ......, COMUlalO 1Ud&......t. AlbjwIIo DuUia'......... ......_ oIlM LuM ud nn.c....,..... ofT........, dill
La.. bd'on utiq ~ cllllll rn... Tcaul I1InMr ... 10 ......,..,. ud ......,..... 11III ........ ... .... MIl ,.,....
,"""ny, II 11M wrin.. nqlllll cl DuAkUl', Nt, propeff1 ftOI . rc..oro.l bp T....I "IWa II. (10)"" foIIaao&q ...... clllldl wrkIaIlMlIicII
IMIIblt...... aNlldoned by T.....L
1.1 T....I ...... lhll ........11Oft 01 1M P"lldlIiM ApM...1 IIllS failll" cl T..... 10..... kI ...... ill 11III t.... 10
DuakJ.' .. "' lonll IM"la, .....11 bI . dll'lIll under 1M I..uM ~ wiU 'Illi'''' bill not obUpte, l..aIl4lon1lO l..pIoJ II" ,....... nailAbll ..
III""'" praraI or OIMIW\III,IO evWt T'M'" flOnll UIt Pn......
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12 T.... lUll .. ... .... liIbII to .......... far .. 01 .. ........ ...... 1M ....... -A . -.-..... .., .........
...., III ~.. o...ia'lIlII N.......IO NaM' I,. T..... aU ---......,.w eo.......... ftIN,......................-.
'-_......__al_
SI!C110N m . DElJVl!RY OF POSSESSION OF 11U! PREMISES
10 upae..... 01... Aa::epuca'", OukiI', Of..... pmIMI....--,,1.MIIklrd MIl.... T..... '"-."....
bJ'dWpM .........01..-",...- .byotlll,... -.-r-r..o4l............ _.....,...... dIM......... ~' 1M...
_al...__alT_....,........,rr ,.
11 ~'.... ... 1M ,....... to an""'" _/01 to..... ..,.. .... ..aiIl.MdIDN lWMn....... 01&11I ......
10 o-w.', U.............,. larlMdlDfd 10..... .... ........ ill........,.. T................. "'... ......10
o-Ida', ~' ..... .. ...... NIl'" at......... ,.,... _ ___ ....... LM8aIlI'I.....,. tleIMI;....... .. 1M ......-
......m __ . aN -., 10,.,. T........... U ~ .. ..... 10..... ........ 0111III ........ ID o-Mit'...... (6)
......... &Ill.... l.udklN .......u.. ~.- DakiI'..... *.... .. 1M rtPIII .., dIM ... tMdIaId............. 01
1M............... ~ bfWrtn.. __ to l.uMUoed'" Nt......,. .......11I_.. ___,.....................
............ to DuJda',
SI!C110N IV . DUNKIN'S R101ITS AND ODUOATlONS UNDER 11U! U!ASE
4.0 DwU1I,'... .......-- 01 UtI rn........... cwnmaIIJ an tM........-uw bJ LaIdkJN ill... O<<u'"
IhaU .... ud ddMt 10 J..udDd Ita _.~- 01 ... T....... riP- ... ClbUpt"* .... 1M....... DukSa'......,.,. pNba ... be
......, all 01... ,I........... 01......... .pplicIb"lO Taut....,. &MI~'''''' be NqUin410 ___ or...........,. 1M
en. 01 .., ._.A_.. 10 ... ..... ueaattd bJ T..... ..... abtalaiq o.uIa'l prior wrina appnMI ~ nidi ... .. ..
...-.,..-......,...
4.1 Ma DuaJda' ..... TcDUl" late,.. dlkr 1M u.-. Dnkia' Uf. at .., dIM. IIIip .... ........ Of ..... tM
"""10 al>lWia' nc.d frucfUIeI. prorided o.t ~'1bIJI rtmaia IiIbII for the ~ 01 real ud pI~ 01... T........ 4lIdcI
.... obUp....., 1M..........,.. let fortla ill hrqnpll: 4~
U .................ur.....-al.......pII... _llWla' ....,... ur_....Dutio._...T......_
..., tM ....... but OGIJ witJllbI priDr wrinu ClDIIM'1 of LudkMd, _p wi..... ,.:au,.. ......... _ ....... a..... l.aadIord.w
DOl ........., tritUloklIUdl CIOMUI to.. ......110. credattlOllbJlh&UiI' DoaUCI hudYIeI wIlo __~.. -..aarrw......
"'~f.._ U..._"'..........ot.._pOoo__.._1llo___.._...
u-... to ct.",. 11M: ..,. ~ ud aar--atl Oft tbe pin oITUMt eo be pmo...d"" 11M: t.t.. ~. MIl ~ be
...... ,~ l01I UIbWtJ..... ..... 1M ........ ". ud aRcr ,... dal. 01 ....... dMNOf. wi&IirIDIlt..,.... 01. wriIta -a. . ',,-aI
"'..........aI__
4.1 o-liII.aritl..... IYJOGtJUM the pftllli&a 'Ofthc pIIIplI&(.)pI,......,.... .....01.... La.&.
U 111 ... _. Dutil' Ib&U .ka 10 IUII_ T.....'. rip.. ud obUpUa. ..., 1M a..c... ~. ...... Mw 11M: ripI to
Ie......... ..... It..,.... .....r.... (3) JUnM t....... by priq I..MdIonIIl kaA... .......1WaIJ (120)"'" wriUaa ItOticL U 0\&UiI'
lbID..rciIt...... oI"~ DutiII' IbaII mMM III ..Mipmc'"'''' IlIhlI-. ud...'~ 1M ................u Nhln tbI rn....
10 lMdklId.lIbriIt& fa,.... ......111 oIT......'. "'/01 o.tiI'. ~_'1I1O 11M ........
SI!C110N V . DE.WI!NI1FICA nON AS A DUNKIN' DONUTS SHOP.
'.
,.0 U 11M: ...... or""'" AIr'-_..II..,.au.. lAd OutMI' faillfa aarciIt 1M Optb ....... u.tIiMiI, T_..~ eo
dHdnlilJ .... ,....... . . DuUia' Daaull Shop ... 10 ptOOlIpdJ' ruICM IipI. decor ... 01.... ... .... o.d;ia' .......,.,. recpcIII be
,..,.,., M bdq dilllKtM ....lDltblM 01. 0ltatUt' Do.ull Sbop. Dukia'..,. .llIr...... P1uIiIII........ bUI pillJcllras- 01 ton
fa did IlIdt .......UIic:I... ifT.....1 '''10 .nllCl dWk.lilkaam willWt... (10) ..,.lIlIr.... 0I""..........'~ Dut!I'. tCllaoMq
Ie......... oIl1M PI'UdaiM AF--II or lAaM. T..... IMIl pt)' o.uia' tor ltl rumub. cmII 11M apc_ .. dl'1l'Iiq: ~doL
l.udaord ..... )oiaU, 1M MWraPr be obllp" to pt)' Ouataa' 'or Id cmII, if I..aftdaocd ...... willi T...... 001 or ... ClOIUtOlI ......
be..nnan. or~tI (MIM.. ..,be).
SEcnON VI . ADDmONAL PROVISIONS
6.0 llUIlAaM ap._ Ap.I' IIWl ru. witll ,be Iud .... be bI8diq .~ 1M ..... Mf'IIQ ... ... -.. ........
Ulalton .... adItUaIIInlOfl lAd ,.,......Iiwa. Tbe ripll ... obl1pt.. "'y coataiM4 IIt.IU coada-. ..A_I ......-, ..... .. ....
pc'" or 'Ili" IMI ..., IIlaI4 II' ~ or vwncMip ill lbIlud or buUdiq.
6.1 Dunkaa' ...., Ulip III ripll un4cr '"'' Apoc.I.. ..,'bouIIIM COftIU' 0I1..aft4kmI, .. ~.. .., tlUlflt 0I1U
ripllM 'nftdlitat 01 ,be DuaUl' OOlntIlSylt.m.
.1-
"
~
,
..
IANDLOIlIl'S AaNOWUDGDIINT
STATBOP ~ L. 11-'. --'
alUNI'YOP ~"lUII
I'OR,\ coarollAnON:
111I Ia4-r--rQ.._w-t
0..... _..., of . ., -'..... _... .. _,......,.....
............ - ........ ....,...... .... - "'... -~...... _10... _ ... ....... __.... ..
.........--...-......"'...-...-....,"'....-.....__10_.....
__01........ 01 D6ncIonol.... A...r-A-........
I'ORAHINDMDUALI /
00....u!:~.L~1~___ Y. John & Shirley H. Chutnut ....
---........-... .,..........___10...__.........._...
. ". r.... ............ * ~ , .
I'OR,\ 'AImlIWIIDP:
01"'_""01 ..'-,beIan_caM ...
--...-................"'... ...................--
_10.......,..... __.........-....,.. _ ...,........ __... _... _ -......._
... ftnI .."..... ...,-. ...... .... ... --. 1M _..... d uW ..,..... ... .. ..,. ..~ r to _ ... .. ...... ..... ...
lItIMnd 1M -- . ... ............. .... . ... fM'" 10'" .. ... laid ,.,.tMJp'a"'" ...,..... WJI....., ad ad deed .. GI ....
.-.-... ~ tIrlmAa.......... coatai8e4 ud.. (OlD. bcIon _
I'OR,\ 11l1Jm
0....._...,01 '.'-,be:(c..n..lc:a.. .to_
--....bolai.""_""'..........,...... ....T......"'...T__ ....._.........._
IMe hi aIped" ..... tkmo... *lMftllIa CIOpJ' of lbk lDIanuDlallo I'" CIIMr pua.1a ~ wi...aalllorttJ....... 10 w./M,., till
n._"'....T__..
~~/y/~
NOTARIAl. SEAl.
MERLENE IolARHEVKA, NI''''' NIUe
Carll.'t, ClllI\btrlln. C.\IntJ. PL
M, C.mlllllllln Ellplr.. 617194
TEHANrS ACKNOWU;OOEMENr
STATBOP'-0 1_., fl) ,,J
alUNI'YOP ~'oIlY
IlIII............._ 'J'<-I
FORA coarollAnON: l.l\.. ./
oo....!.!.....,"'~ .a(]J,.,...._ Shirley H. Chestnut .
....,.....u,__bolai.""_"'" ..,..........oIllcu"'..._.._....._...,.,......
-........_IlIo__... ...."'.................._.......,"'...._..............,..
............ orMr of tM &c.nI of Dlnaora oll&ld 1lllrpJrII... Won...
FORAHINDMDl1AL:
,
011 ... _ dq of . '9_, bclon _ CUll: _ .10 -,.....a,.....
-bolai"""-.""'..........,..........__.....__...r-...._.... '. '..
.. ~t........ ......... bdon...
FOR,\ 'AJm<I!IWUr:
O'...._dIJ'of__. .19 .btto-..CUDlI .__ .10_..-.,....
Ud ao.. . Ud to be. putDI:r cltlll put8enWp Ud till idatbI pI_""'" II.. putrto Ud....
....w ill .... plftMrUlip', WM 11M '0ftJ0iAI _tv..... ... JI'OId-d till .... bt:,~ ... tftto. .. beiec tint..,.... ., -......
tIlaI .. bu...... COlI"'. cl ..... u.ana...I aDd 1M: dilly.... . ..., 10 _ "'" .............. MIll...... .... II... ,.,......,..
...... It .... tor ..... 10 ~ IUI ... M6d plnltrMlp" 'Nt. IIwftaIIIId WII......,. lid ud ... 'Of .... .... JlUJlWM ... ,. __.....
-.tbDe.f tad COft,..... &Ad ..11ocQ, Won ..
\..-
NOTARIAl. SEAl.
"ERLENE folARHEVKA, Net..., NIl.
Carll'it, C,,"llertlft' C."",tJ. PI.
Mr e,mtnl..I." Esplt.. 617194
nil inItnIl'IMftl" PftPtrcd"
...
. I!MJ. '" I' '-.....lltM, ..........__cruea
..
-.
ADDENDUM TO DUNKIN' DONUTS INCORPORATED LEASE OPTION AGREEMENT
The rights of Dunkin' under the Dunkin' Donuts Incorporated
Lease Option Agrc~ment shall be contingent upon Dunkin' applying
for, qualifying for and obtaining a franchise to continue the
operation of the contemplated Jerry's Subs and Pizza shop at
W. John and Shirley M. Chestnut
the location at 930 Walnut Bottom Road, South Middleton
Township.
.
g,r~ e~
...c&:i/ h "f,,;Z;;.Y-
Chestnut Enterprises, Inc.
_-/11-",. 1I-'Z; A.".." 1yJf-t-~
Dunkin' Donuts Incorporated
(attest)
,.
"c ',t, ,,'.
,'.'
/'
'.
....
- ~.
:fI
,
~~
~~~
"
,.....
.........
L~SE OF DUNKIN' D~UTS SHOP .... LOO.
w. JOh'~::;:;:~ ~Oav,.",,~I~~ II "~=rtI=
1n~~(t""LfSSOR',1Illl CIIESTNUT ENTERPRISES. lNr.
Of c/o Dunkint DonutR.l1RF. "~","iqhltrlf Pt1r..
I.... ~.t....
I Pennsvlvnnla
r~..14..1.. PA 1'7""
- ...-
__lIonlllWlg III ~_ -..
Pennavlvnnfn (thI-WSEF).
2, Tho LfSSOR nnt>y 00_ to 1hI LfSSEE 1Illl1hl LESSEE IIOl'IOy _ trom 1hI LfS.SOR 1I1I-'Y
and me DUNKIN' DONUTS SHOP tnerean IoCaled 11 930 Wn )nllr Rnt tom Rnnt1.
-
in Carlisle.
lQrr.,.....
PA
-
17n1,
..-
IS mor.luIy eII_ In _ A .,..,. (1hI"PREMISES').
3, (,) CGnvlli.ldl>g UIlCll1-- _lion IIlll CIIIvory of 1hII'REMISES IS M11orl111n"""'" 7
::-.I.~J..~I~~ r. 1hI LESs:...(~4{~ ).r="=~
.1 :~~:~~~ Dolan 0 ,_RENTl/lllbepay_
In oqual mon1lllY InIl111m1nt1.. Illvanoa on 1hI1Ift_IlI II IIClly of 1hI momn tlly pr-.g 1hI month tor_
r.mm.UI.~, The base rent shall be increased annually proportionate
to the to~cfii,'lsiiE~E'Nl~i~');:..J;,.f~3.I~:-.':.id~rFpill~i.\'~~iNII"",
lIannal_llIOlIonell eII_" ParIQIIllIl7) .'1hI_ of 111I DUNKIN' DONVTS SHOP ancl ...
"""" on 1hI PREMISES, 1hI LfSSOR'S TOTAL COST l/lll1QUIl
DcIarIIS I, Upon WIlbon, till LESSOR
1/1II "'lll1\llI'f notIIy 1hI LESSEE .1111 actual TOTAL COST IIlll " IUCll actual TOT _ trom lI1I..om".
.., I"",, -.0, 1hI yoarty BASE RENT prowlIclln PngrIIlI131.1- 1/1II 1Iy""""" 01_
lly an amount oqual to _ ('110) ilIt!.... _ 111I LfSSOR'S actual
TOTAL COST 1Illl1hl.._"1I! '''"'' -.0, My paymont ..._........... to "".... prrnllUIly paICl
1/11II ba paICl t. 01 trom..... LESSOR". '"'' II1It1 '" .1lIr 1hI Cllte of LESSOR'S "._. '_ tIIIt 1hI
LfSSOR may IIlllIY any........ of..__. _trom1hl LESSEE. I' any, F0I1hI_
.111111 Porl9fllll\ 3101, "TOTAL cosr Is IS -.g "'" IIlllII_ ancl_ _II. -.g 1hI COlI1 of
Ill. ........_,..-,g CClI1I ,arc:Moc:tllI'Il, .9'-..~....IogII.--I-.g tIlICOlI1.'.... ..sur.
anoa, _, dOIInglllll 00ItI1, __og rant 1Illl_. __1Illl_..... InCUTICl ClI.MQ lIlO
eII.1IOPIT*1t of 1hI ' DONUTS SHOP IIlll any __ __..... _1IClIll'" I'REMISES --..olly Ill.
NI1IAlS j LfSSOR, II aR:l1ltoc:tlll'll....1eg1l '_IIS, _-.g ront 1Illl......l'1narolg "'" Int"... 00111 ......
._ 00IIIn (I '. 1Ud'I,1tC8II d be IterTIlIl1 and lutxM.
o 1hI LESSEE. upon _,,
leI FOIlractlono of . caIenClar monUlll1hl baglIIWlg "'" 1hI .....'1hI tonTI, rontaIIl/1III be
_ on . 30 CIIy month,
....
"""
Perc.ntag.
R.nt
D.ttntttonl
_,
..... ".pan
01--
LEASE YEAR, TI'<
on tIlI_1151l11CII.
""",lIlonH"tIIllI(I/12t11
LEASE YEAR ._1hI BASI
....tIlI torn1Iof tI1II_apIl.1hI LES
of lNILEASE. not lallt tnan '"'- ('51 CIIr
_112'1101of1hlOROSS8ALEll1n1l1lpr.-.
momn,
., e'l ThoLESSEE'''''''''_tOpa11h1LESSOR,10I_LEASEYEAR,1hI
_112'110) of GROSS SALES ....... 1hI amount of IlASE RENT paill 01 pa~
LESSES ~ _Ill rnakllllvanoa mon1lllY payrntntl of IUCll PERCENTAGE
011hl momn _'lly ~ till momn 10< _1UClt....... nckla r-
., 1hI ornount lly _ _ _1'2%).'..... GROSS SALES In
RENT '0<"""""" LEASE YEAR, In _llClI1 011llCllllClnll
SEE ._ 10 _ WltI11h1 LfSSOR. ClI.MQ tIlIl'n1
.n"1hI""'" of _ LEASE MONTH, 1hI amount lly
LEASE MONTH ..- till BASE RENT 101 till
leI till GROSS SALES amount UIId to c:oIcUotI on _ rnantNy PERCENTAGE REN
._.I....II1It1_(121montl1l.IUCltOROSS8ALEll_be _. _ .....d III an "_
_1/11II ba Il1UIIlploocllly _ (12) to.._ an""""'''''''' GROSS 8ALElI1I11OUnt_1IV
_ung1hl Illvanoa mon1lllY PERCENTAGE RENT paymont tor 111I 0'''' ,._ LEASE YEAR. .
"ParIQIIllIl'l'I-,
I, ell Tholonn'GROSSSALES".ISUIId___,,___lly...LESSEEIn.on.OIlro
'''' PREMISES bUt anal not __ CIgIIIItI_, _ tun 01 ..........,
lbl Tho lonn 'LEASE YEAR',.,,,,, _,1/11II"", to _1*toclI 0152 ---
_,.,"'IOl'l on ..... ftro, Sunclay 1hI DUNKIN' DONUTS SHOP Is OC*I to 11N11hI__ poac. 01 on 111I..., au
c:ooclonClllU..... CIIy ~ 1hI OUNKIN' DONUTS SHOP" not OC*I on Sunclay.
eel Tho tonn 'LEASE MONTH', IS"" _, 1/1III......1hI_1logIrnng on 111I Sunclay.....-I.
loIlowwog 1hI1U1 S.turdly .1 any caIenClar montn IIlll onclong on tIlIlUl Sa-.y 011hl "'" ..-- momn.
e, Tho LESSEE_to hmll1till LfSSOR. witNnlllty(5OlclayO t-.a_LEASEY!A
., ""GROSS SALES 'OIIUClt yoar """I\tcllly an 0,"",* ",,"I ~ _ R, My PE
CENTAGE RENT __ upon IUClt GROSS 8ALElI in._of --'wttn 1hI LESSC
I' ptDYlded 1bOYtI. tllO be I)Ild tml.ftInIOuIty IUCf'I '1Itl..._.L ". LaSSOR egrMI to rwtu
to "" LfSSEE any arnounII R. IS prowlIcl_.1n __ oI1h111l111 PERCENTAGE RE
.~_on 10< any LEASE YEAR__ofll1l_..........,'ofOROSS SAl.1
"" I>gIII I. IIlllIY any ........ ~ ~ vllIlo"o.... of \ZSSEE. " tny,
,
~ 1_'"
~....-_......
al""
TI.H
pu"o- and
U..
L.I"'I
WlrnnH.
LII.'
CO'feMnta
L.......
COVeMnta
7, 1'~L!ASI.tcr"""""-'.'--4'" .. 1993 ,,93 .....
IndIf'W:ll'4lCln Anrt 1 10 "lnl1 'II'4L1SSlI'SOChQlDan1ODtI.,..,."tIII~aI:IOYe
aNI-...-'" and and'" ......eII...;~, _.--" aNlllO no ~ '" IllY ""....... un.....
__ _,...._at...ll\IlII'" DclMJ S/'<lp and CIIIIvOI'I at... PRIMISIS "'... USSII, II. DUNKIN' DONUTS
IQUIPMIHT PAClCAOIIlIO III "''-''''' PRIMISU by DUNKIN' DONUTS INCOIIPOIlAT!D. .ullI_......
......_...._... PRIMIS!S.......-"y _10 __ ___at I DUNIlIN'.DONUTS SHOP
U..............-:" ~1I101lI"'-by'" LlSSII, _- ....-- _.....11II1... PRIM-
ISIS......-.ay _10 _""" ..._- al ~ by'" USSII.
IllI ""'" "'... _,.,__'*" of... """. ... LESSII may prrlCHCllO .0Cl10rll0llfW'f ot ~
IlQIlIIIld 10 outfit... DUNKIN' DONUTS SHOP _ iIJll>ftI and 10 ...III~, ~ 11II1 -".... tIO no
""".-..,.1..101-'" LESSOR IIldlllll...L.E5SII...~oti'f"""-u...not...... tIft_lhcl
Of ~,ao.ny wnn.", LIbaI' ClrQlRUtKln jtgll_.lIIlQ UW I"IdII pertormn;l won 'Of' tN LESSOR 01 artY camractcn
ot ._0Cl0tS, n.. LESSEE'S ..1n/lOI...... PREMISIS lot """- aNI not - tift - upon...
LESSOR lot tift ftll\nI ot 0QUIIlITlIIII",,- ot...... CIOno by'" LESSEI.IIld... USSIe.... pnor 10 -..,.., "'9
"""......,......... LESSOR 10 tIO _ '"""... ell" 01'" USSIe'S...., upon'" PRIMISIS - -_.
.ago__~ 10 tIOCIlIlId by'" LESSII dumQ...l... _. and..._""....lytnO LES-
SOR 11II1"_01 tnoUSSEllIldof tift at tnoLESSle'S _,.0Cl0tS1Ild-'.--...~-
by W,,",,","" Coml>II\II""" 1nIUr....,
.. (., In _10'" ""'all ~ 110M,'" LESSU ogr.-IO pay.llOfora _1Ild ~
-,,", ....._ _ anIl 0_ _. -...0.--........... tcr -..montI. - may III fl'4lOIOd'"
ot _ _ and 1lIY- "'"" _10'" PREMlSIS tluI'Il9.......... D\nlil"'1'nI andlUt yIIII at tno """
tno LESSEE aNI IllY I proma__ of ..""".....: 1Illl__ _tIO _ ""'1OCl....... ...... of ... ponocllot
wncn 1M w.M..........., 10 n:iul'I orit It'OM tax" IW""........ to 1M tMII of tN LEAII. ThI LlSSD may. a11t1
own .._..... In........at _ ot IlOIIl tnoUSSOII ot'" ussu. _and..-.. "'.g. lot an
1llI1_ ot''''' of tift ...and tno LESSOR IglMlIO _"-'" LESSEE In tift ...... ..w l 9"
Illl 'IllIUSSEEIlP""IO-"_...LESSOR_morr\II....._11/12101.....\lnllIClyowly
,11I11II....... _ .... poy_'" tno PREMISES, Fot _ 01".. LfASE. ... u_ad yoMtt .... Utili ...
... tno PREMISES _Ill uaunocIlO tIO... _at... _ In'" ....,...... \Ill _01... \Illlnll"'-
...__..- LESSOR ""'......_ an III...... _lad yurty "'11II11 \Ill...... ...-' Dunn<l
dW penod trcm ......\.,__._,1 at rw'tt l,I1t11 1M end of 1M ftrIt tax.,.,. a. LESS!! wi mike rnontnIy taX paymtn1
dIPOI'tIot III') of n,..p"tnIlQ 1'''...... ..~- ....11po11raC._---J.AlIUd\~tuplyYNntl.,,&I1
tIO _ .... poy_ II ... ..... \ImO U tno ...... paymonII roquirad ..- PItIQrIIllIl 3111-. upon tno poymon'
01 tift ... Uti.. ot _ \Ill pII." LESSOR dII....... _-"II I eII_ "... - 01_ """ on
_01_'" _. LESSEE 1/1II pay 10 USSOR. __12Oldlyllltorbollnll. tno - 01'_
lItI_, U eIIt_ by LESSOII,
9, III1IQ1Md _... LESSEE may u.. tno PREMISES oti'f lot tno __lion oIl DUNKIN' OONUTS SHOF
tor 1M manutlCt\n Ird.... on 01 oft U"lII PREMISES. at whe." or NlU. of U"lII 10I0WWlQ anidll: donutl, dOnU1 pIS'
InII, _.CIlft..and_......ago.,1Ild ___ ,",,"\ImO 10 \ImO __ '" _Ily LESSOR
n.. LESSEE.... _ ... PREMISES lot no 0_ _. -
10, n.. USSOR wl/TllllSlIII'... LESSOR _... PREMISES. - by"-P ot ...... ot....
IIlCIIIIII ... LESSOIIIlIIIulIoQIl ngrn 10 anI. ..10 \Ill. LEASE.
11, 'IllI LESSOR ogr.-:
1'1 To_,ot 10 cou..__at, tIft......~IO.ullItI/I1IAIIYoom_\IlI PREMISE!
'" IClClCIfId,Ira wtI1 DUNKIN' DONUTS ptInI and speal'tcl.tK:I'\S WTIt'Il"UIOl'\ItM dalpltcft .tt. ~ ament at trM
I'" 01 ".. LEASE:
Illl TO_IO...LESSEE..w'"lIlMIlIldgullllll_oll_'"""~'..._' ._oto",""
wnft f"IIClIICt to U"lII pertam'IIra, wor'lllnd ml11N11 and ~ used" N canatr\.lCtlOn and C)I..~ at tnf:
PREMISES and 10 __ cliIIgIIIOI '" .....ang ... LESSEE In ... ..,..- of""" w....._ .... guM
an1_; and .
(el NoIIO_'" LESSEE'S poa.......1Ild quoIIll'JO,"_" 01'" PREMISES 10 lOng .s... LES
SEE it not .. e111.." ..- ".. LEASE.
, Z, 'IllI LESSEE ogr.-:
('1 TO pay. __. "'" and" "",goalot w.... gu, _and__1\mIhOCI1O \Ill
PREMISES:
(bl To IllY tift W lltuu po<UIW'Q 10......- upon"," PREMiSES....... LESSEE'S_
_lid ... tno PREMIS!S:
(el _10...., '-'''' PREMISES, 10 _.... '"""tIin ..lull""'" and otlOCllot tno PREMISE!
duMil tno..... """ of_ LEASE.II...LESSEE'S _._, 11I-- poIiCYotpollaH .........9 tnoLESSEI
.... tno LESSOR and.........,.,.IIllI.......I-..,-1 tIft\otl, _ot 0'- __,",,"1- om
""_1 rn, panoNl....,....n. _\II, llI-"I_ ot _1II1l1'4 ot occurmo upon ot'" ............ "'"
tno PREMISES ot by ....... 01'" LESSEE'S ___ ot 0CCUIlfI\CY of tno PREMISES. !lucIl poliCY ot poIoCIII ...
_~,.....,_goI*Illlllol\y-,xUdng, bUlnot.....adlO._..........--CO'1l'Og01
W1...I"gIO.....01 ono_lIOIIrIII',OOO,OOO,OOlot......IllQhOt.....ULESSOR.InIll_and--
may ,",,"\ImOlo\lmO_.lot~"'" ....llI-"I__,..n...llI-"I--' IMCIuO
ong 1loocI.... unnquokO _. tcr ...1uI.... ,..", COII'_ 01 tno PREMISES. p11l1g1111.................
f\N'It'IOI. II ~. II"ld IUd'! 11INtCII'Y I"I-...ra u may bll'IQI.dd " U"lII ltall in wNCh N DUNKIN' DONUT!
SHOP II _lOll, I>J ........... IftonllCl by ... pollaH ~ ..- ... ,.... 01 - PItIQrIIllIlI/III:
III Bownn....tno""""oltnoLESSEE. ...LESSOR....tIft-pany-adby'" LEli
SQR, II 1I'lW rnpecvye I"ItIf.,m mIy ~
121 Bo....... by ......... ccmpIIl'IO __ 10 tno LESSOII:
131 Con\IIl__'o......_--......by sutxogI\IOIIol r\ghlOol_ory IQ-
any patTy~:
(~I CClntIln tno Qm!Ilotllllll __ ot ....- c:omot tIO midi -- 1l1OU11IW1Y 13'
cloY' ....... noIIOIlO IrIj patTy ~; IIld
.
Subordinlaon
M......I
CO'''nln..
,
LAllO'" "Igh,.
"""'-.. t.uII bIi lIfMed 1'11/'11 WI., Dy rwuon of IfJ1tn1U' ... WhCtl 'nil., be n\fIll"MINId f111N LESSOR.
~......- """,;__"';'--'of ony_, _of lNIl orony
_1OCUlI'f ~ u. --,
DII'"ll "'".... 01.... LEASE, "'" USSEE _ ......." "'" USSOR_ ~ orIgInIlo ollllnourlnOO_,
1nCluClInll- ond rop'l ,....1 poloOII, .ogo_ _ ._bl "'" pron'I\I1II"*"tor,,... _1lI411.1 Illy
.... _ "'".... "'" LESSEE 1...10....., _ "'" .......... 01_ P~ 121Cl. "'" LUSOA.In_
10 II _ _ .._, may _ 10 _ __ onCl kOOll till ....In .W'" onll "'" LESSU 11III
illY"'" L.eSOA. u __ ,onl upon _. "'" 0011 01 pronlUIII-' . ,
(ll) To ClOfllIlIY prorllll1ly _ IIIIlIllICIbIIIIWI,....... rogIM-, _. rIQlnmIn\lI and eRn
01 pubOC ._11I1, U1I _ 01 fA ~... ond ..... 0fVII'IU1IOnI:
(.) TO...."'"LESSORondony_PltlYelIr'*'Ilon_lntlllPREMISES-and.odoo..'1Ii.d
""" ond __ tift ond II f'lI'Y, _, dim or _ 01 ~ 10 ony _ or P-'Y -... "'" PllEMI5ES;
l~ To kllll ",. PREMISES and II _. _. gIIU. pkIftling and _1lllIll"*'1 - or -
__'" ~ ond 01 "'" ...... kind 01 QUIil't ond 11<._...... onllln _ goocl ropoir ,onlIr onCl _l1On U IN
lama 111I.1 IN llIgoNW1Q 01, ot may III put on, dum; "'" ,0<111 01_ LEASE. ._tor"""- - onCl...."""
_ D'f lIr. or uno_ c:uUllly.
UU To makl nomllttnll anIl"lDOn.eddltiOft.";l ...1 flI ~,,,,,,~"'~lli'1.orto. aw inttttoror."""
01",. DUNKIN' DON\lTS SHOP _ pnar -....... of "'" USSOlI:
(Il) To klllllul. oompIIte""" _II _ onll_ln....- - gonoroIy-
.......tong pmclIlIlI and on",.totm""" _ u may 1lI1ll....- D'f "'" USSOlI..... _10 _10 - onll
I_II' U1I LESSOR'S ,*1I/l1ll1lOn 01 IN USSEE'S GROSS ~ onlllD _ _ID U1I LESSOfI ot III>'
,....._ 01 "'" USSDR 10 __ and -:
(I) To conlinuOUlly __.. IN DUNKIN' DONUTS SHOP... "'" PREMISES.IuIy'- onll.tallod.
10 u 10 ......... "'" ........ 01 GROSS SALiS:
OJ To gtvo wnnon no1ICO of ony IlIIIll11 of ",. USSOfI'S _ ot lll*gI1ICInI"- "'" tonnI of
11... LEASE 10 ony"",";_ot ._1_ ot 0__1 of 1Il't- ot_of IIl't --.,
'" Illy _ 01 ","LEASEot"," PREMISESI___....."'" LE$SORot.....ony_.."""..ot u_
01 IN USSOR) 01_ "'" USSEE _ no"', ond n _ ClIIIllI1_ _ U1I LESSEE ID - ot IImWII"
\tI. LEASE, gtvo wnnon nella olony ""_ _lIOnot ,_lIOn lOony __. - ot_
""" _ _ rnong_. u_, ot _ 30 llIyllO curl "'" ClIIIllI1 ot,,-In _ 10 perlorm II 01 "'"
covanon..oI U1I U!SSOR IMW U1I ..... 01.,.. LEASE. In _ 01_ ovonI "'" LEASl! II '" oomonuo III IulIot<e
and .WIC1: and
(Il) To romovo, II "'" uplfI_ 01 U1I.O<11I. "'" J.ESSEE'S goodI and 011_ onCllD -1llIy yIIld
up the PREMISES in U goad f"IPII' and c:ondltlCln u 1M &ami nwy r.ln Ill" """"..___4 of1N twm 01 may be
pu111'l mer,.1ter ...c:.pt lor rMIC)nIb6I well' and UII.
13, 'INs LEASE 11III IlIIUflt1Cl ond 1'--11 10 ony _. - oIlN1l. 11II. 11II onCllol_.
ot ony _1OCUlI'f arnngomont ot '",...., mIdI_ ot _ID ony -......... oornIlIIl'I. -... c:otnIlI/l'f.-
_ ot purcIIII<<"""-'; "'" PREMISES: Ill'-, _..... __lIOn... nolCll1llrll "'" USSEE'S
pl>IlII_ onll_IIflIO'r.,.... oIl111 PREMISES 10 tong u "'" LESSEE llnolln IlIIIll11IMWII'io \.EASE. TIll USSEE
-. hIroCly _" "'" U!SSOR U.. _1.0 ....... ony _ ~ ID oompIIte _..--.on,
In U1I ovonI "'" _ of "'" L.ESSOA In "'" PREMISES _1lI...._1D ontl_ D'f IIl't - - (~by
"alOft 01 . tClr'lCX*ft << othIr toll _ J ~ 101 brOUght ., reIPICt to .,., rnaftOIOI. dIIcS of 1\1I1 0I11CU11Y i'mr\.INnt
.ftlCtonll","PREMISES.IVlD'fI_InIoouOII..-..n,ot(iI)bylll't-_.LESSEE-_IO-
lucII 0_ _ IMW II of "'" ,_.. ......... ond ~ odl..... 0I11'io LEASE. end LESSEE hIroCly _ 1N'1It'f
_ _ "'" LESSEE _10 19CXlglU' "' ..1InCIOnl_ _ nollll_tor 1Il't""" or..........
Oll/l'tpllotllnClOnl'"'*"""ll","USSOR_IIIII__IlI_IDIIl't_ot__U1ILESSEE
may "'''1gU\I1 ony pilot 1InCIOnl.1IlClUClInll U1I LESSOR, L.ESSOA onll USSEE hIroCly _tor "'" _111 of IIt'f
""'";';00 IN, may _ttor"... III ""...., '" IN PREMiSES.... "'" _...,- - by"" USSEE_
not III _tor __ '"'" Idly 1&Ollllyl '" IClvI/lOl ond no .,"'4._.' 01 "'" LEASl! ot - ot _l1On oIl111
term' at thI LEASE Ihd bICQmIlnKUve wrtnout IhI pnorwnnlfl CQnIIfttO'hll_ t~~. pn:MdICI Nt Iud1 ClOI'MtTl
II reQUl"ed UI'IOII N tndInture of mongage.
1', (.) TIlIUSSEEhIroCly_b,,,,"USSOfIllnollDllIhIIl1. _ '-ot_lnony_
_,_tor ony lI'ont oonslrUCllOn ot _ ...-1lI1_ Ill"" PREMISES onll "'"I "'" -...,--
lllllnotllleltnW1l/lldot 1llI'0CI D'f__.In","ovonI "'"LESSEE____"'"Pl\EMISES
__ot_Olf/lynlNnlor__,lI'.on","LESSEE_Por1l1l't-'''*"tor-
1QIlllI' IN oon\rIClOl' ot oomroctorI 01 IN USSOR ot ony _ LESSOR of "'" PREMISES. _In IIl't --
..sertng II'IY dUn 8g11Mt IN LESSOR. In tM event ot Itrt dUn 01 d1m18QIIWt N ~ _i1:~~ or _IU-tu..,
"'" USSOR _10 _I. _lI1I LESSEE In oclVInCInll and l\nllImlI "'" LESSEE'S -. ~ -.....
trIC\ototoomroctotl. "' USSEE'S _. and ._, TIll LESSEE_ID _","LUSOA Iotlll't.__
ot colllD _ "'" LESSOR 11III "... _ put '" 10 _tong - "'" LESSEE. TIll LESS!E - _ b.
... USSOR II not ..... ot mponIIllIo '" IIt'f __ __tor ~ In "'" ~.......... of "'" OOnIlNClIorI of
IN PREMISES:
(Dl EI:II PttlY clOl!'lIl/l't cotlI1I\.C1IOII.....- ot _ walt - pl'Ol'I'4llly lliICIlIIVO ot llOnd IIl't
olII9l_1 ot _ """"II ,,*"lrom: onCl
leI Upon "'" _I oI_llII1Y. ",._llII1Y _ ........ --'""llI onll_ ..............
,ecorcsatlIe It'l.WNIltl gmng ~ 01 1M LEASE and __,.,__._.1 dlttI of thI LEASE undII' ~ 71W'eOt
""" any 0_ cloC:UmIlllI _ may 1lI_10 I_" ony fInoncIng 01 "'" PREMISES,
, $, (II Tho LESSEE wOtTOntlIN' . Froncmo ~ _ "'" LESSEE onCl DUNKIN' llDIl\m:
INCORPORATED, '0 __" "'" DUNKIN' DONUTS SHOP II '" UI.... """.llICl ond.... - LEAS! II _ t<
_ F,_Agr_ __ on lull.... ond.ftlC1.lI_ froncmo ~._lICItorlll't_
,_ tnI USSOR 11III "... U1IIlQII1IO .......11.,.. LEASE, ".
CD) '!hi USSOR'S .""'_,...... _"... "'" ngII1lD _lI1I LESSEE'S or1gonII_..
'_11"___ _,II III __.... ","GROSS SALES _D'f ","LUSH ID"," LESIIOf
.,.11.. "'"" lI1I GROSS SALES __ by "'" _.lI'.on "'" LESSEE _ .,.._1IIy IllY ID"," LESIIOF
onyotnounll_,o","USSORllIIICl_","_GROSSSALES,AJ. . 1ICIO._1lI11","'_0
U1I LESSOR: _, n an 11I_ 'nUll....."'" LESSEE'S I.....ID ~._ot _111_ D
3
v
~
. -
..1IgntMnl or
S_.....
,.,. -
CaIUOlly
E~_1n
D.toull_
T.__
.. ..
_~byP~landI2(ll10''''''WSE,or_..",,-.ryof__~r,,''''QlIDSSSALaS
~ by "" LaSSEE of lWO pon:8II1l2%1 or moro, "" LaSSEE _illY or r-...o "" LaSSOlllor any .... ..
....... ..... I ~tc:t 'M1h h l'Iapec:oan. R:U:II"lO. but not limited 10, f'HICI'\ICII ~ and . ,.... U WII ..
"'WIll OIl 11ft \IlPIId"""'" It "" rail III ",""" PItIgFlllllI9(el, SUclllllyrnom..... tlO _ ~ fa any
.- _ "" USSOR moy 11I....-"... LIAS!. '
(el Tho LESSOR'S '_11.... _Ill.. "" ngnllo "1IlICl "" PREMISES 01 .. -,
11. ('1 LESSOR moy '''1C1l any "'_I " 1M WSE .1 any ....., provodld 11I01 no ...... '''_1 ...
'ocluoo "" 0Il0llI1IOIII 01 "" LESSOR or 0"1urll .... LESSEE'S oa........ ancl_' ",_I 01 "" PREMISES ..
long II ""LaSSEE iSnot..dolllAl"- '"'. LEASE or ..- ..._of any noDIIcI_'_by"'" LESSEE
tram "'" AI_ 01 II... LEASE;
10) LESSEE _ not 1U1C1l. 11",.'.. mcn_ or _............ or ell..... OlIN. LEASE. or
any "'_I""'" LIAS!. nor..-. or porIM "" PREMISES or any IlI/'I ,,*",,1 fa tlO u... by 0""". - ClCIIIWlg
... LESSOR'S I""" """., _I"''''' "'IIIlCI, My ICl of ...""""'" putIlor\IIlg fa cla any 01 "" I~. bul
_ -. not Ill" LESSOR'S I""" _ _. _ tlO nuland_, Upon any pomlllIICI_I 01 "'"
LIAS!. WSEE _ ....... ..... tmugIlOUl "'" _ 01 "" ,.... lor "" llIyrnom of rom ancl_ CllIIVII-
lor "" port_ 01" ...... """""'" _ concIIlIOIII_"'-"''' by "" LESSEE.
leI "LESSEE 1I._bOn. "" 1I'InI1.01....,."..,of "" _ anclOUlltanClonll_ '_0'
.ucn_bOn.or~LESSEEiS.__.""II'InII.ol....,."..,of""_"'_I"""'--.-
_.ancl_".IlIlQII_or..._at....lldor......IId............._Do_1II
UIICJlITl"'I of "'" LEASE.
I T, Tho LESSOR _ _... LESSEE ....1 ~ "" PREMISES or any IlI/'I ..IO' _ Do damagocl by IIro
or CUUIIly. "" LESSOR.... ~ _...-- "'llItl:11, .1IOr _ at "" .......... ~......."g!ram
"'" IIro orCUUllly.fa.......... PREMISES 10 _1IIlIy "".... _ III""" fa ""clamIgI.. _..-.
.lllOCland_",., ~ "".... at "" .......bOn U_ "" _ of "" nouranco.......,. "" LESSEE.... illY
"" LESSOR Ior""'_ _I I""" "'.......lIOn. Tho LESSEE _...., """.... Do no _,_" rom
poncIIng ......._ 01 "" PREMISES _ ",., "" LESSEE duI1ng "" tarm olM LlASE _ kllll " U ,.... -
.WICl _.. '8_ IntInuOlXln In........ "aunng "" ........ at "" OUNKlN' OONlITS SHOP 11I....,1...
or clamIgI by IIro or CUUIIly, II "" PREMISES III damagocl by IIro or CUUIIly duI1ng "'" III' -(3) y'lII 01 ""
I.... of "'" LEASE _1UCtI clamIgIu_ ftfly pon:ont 15Cl%1 of "" IIA InIurallIIv_ 01 "'" PREMISES, "" LEi>-
SOR may -. by natIC8 to"" LESSEE """" Illlty IIOl ClIyI 01........... of ""clamIgI. not '0 ...tor. "" PREMISES
_ may I......... Il'II LEASE.
11, In ClIO "" PREMISES or any IlI/'I ,,*",,1 .... Do lIklld by "" u....... at "" ngIIt 01""""" clam....
Ihon "" LESSEE _Ill.. "" _ 10 1.......11 "'" LlASE. ~ "" lIkng. 0I1UCtI CIIIrIClIf II 'a .........,
pr_ "" LESSEE tram _ "" LESSEE'S buInoIIlI _en and ~..., _ _ tlO mOdo
Wltnin.....,IIOlCllylolllldllklnQ. lIiS~_....I..."par1y_tlO_lO_outol...,.wlllllllymonl
lor "" amount .1 __1UI1IIlICl by .. 10 'IS -' _ IignI. LESSEE IlnDy II.' to LESSOR" 01 .s
ngIIt, ...and_ ..andlO 11I'/ -.no_ .wIlllIllY_" LESSEE by b _.........9 outnanty 11_
lor""_ or parblllIkng 01 "" nlOlI_IId" LESSEE by Il'II LEASE, AI.-__1IISlng out ol.com-
_or partllllIkngof "" PREMISES _ llllUI_ by LESSEE _ to _WSEE is iIgIIy...lIod 1IldUdlng.
_ _bOn. _ u_ _ _ lor......._ 01 LESSEE'S .......... .... tlO poocl '0 LESSEE.
II. 1.1 In"""""""'''''LESSEE__..-ormak''''UIICJlITl'''IIor''''IlInIIltOlcncl-
'tors,oril._"~iS_by"'LESSEE,or.ucn.poll1ioniS_III_and_lIdtobybLESSEE.
or.. not""""'" """" '*1Y (30) ClIyI. or ,I "" LESSEE is ~11Id. _ and ~."In -'Y or 0_ pro.
c:ooaroglorb _.0...,,01. _01 "" LESSEE oro_QlI_'or "" LESSEE'S buInoIIor...... IS -
Inll..._....dtobyb LESSEE_..nolellsmo...."""" '*1Y(3O)ClIyI.or. _or_QlI_iS_lId.
Of If P. .....". tar WoII'~' wren cncw:n und.. any ltate or fedlrllllIw tnouId be I1IUMId by or eg.......t the LES-
SEE. or ~ b FIll or porsonaI praporly 01 "" LESSEE.".. tlO _ .11...., __ by 11I'/ 1l1On1l.1l\IIIIlII or can-
s_....\ClOIl b........... of 11I'/ 01.... ...,... "'" LESSEE _ tlO_" Do" dllluIl..- "'" LEASE
ancl"llgIIlI granIId to "" LESSEE '*- .".. _ ,......... WlIllClut .,., noIId lor natIC8 to "" LESSEE
_1l'II LEASE _ __ Do '.....'IId,
.
lb) Tho LESSEE _ Do ClIIIUIl ..- "'" LEASE:
(11 II "" WSEE lallS, rotuNs or nogtIC1S 10 pay ~ to "" LESSOI'I..., -llWWlV to
"" LESSOR OIl "" doll ..... payrnom is duO;
121 """LESSEElallS...___.......or_dalOwNd1""LESSOR_unclIr
'"'" LIAS!: or
(3) II "" LESSEE fallS to CIIT'f out" II: /IIPIClI1II'/ _ 01 "" WSEE'! ClllII;Ibem It'd_
_"-""'LEASE. or..-.,.,_'-' pramo.aarynoto.__oontrIClor__
mallnlly docong "" DUNKIN' OONlITS SHOP 10 _ "" LESSEE Ia . pony or by _ b L.aSSEI! is --
Ie) II "" LESSEE 'all to pay 10 LESSOR _ duOit'll paymontS ~..- tllII LlASE. "" LES-
SEE_topay.._-..,ro__._'I__"_'OII""lI'ClIICI......".ltl....por......,
Of '" ......t pIIJ'ff' -.NA raN, n IdlftOn to tne unpuS amounts.
(el) lib LESSEE_Do " dolllAl..-PIIIQFlllII IIl(bXl) 01 '"'" LEASE ancllUCtlCllIIlAl_not
Do and_ t., ('0) c:cys .n. __ at........, Ncl\lCI to Curo "*"'" tram "" LESSOA. .... .. _10"
__ "lawor" -'Y, "" LaSSOR may .....-,1Iy ,........."... LlASE.1n b.....,aI any 0_"'1lAl
by LESSEE ..- "" ..... of '"'" LEASE. andlUCtl..,1uIl _ not be o.nd """" '*1Y (30) days .1IOr "'*'" of
......., Ncl\lCI toeur._tram""LESSOR.Ihon." _to "__al law or "-'Y. bLESSOR
may ....-,'" """"1l'II LEASE. II "" LESSOI'IIlU _ to b LESSEE lWO __ta _ _ of_
ell_ do'_"'" CIIOof._ .........lofIlASE RENT or PEACENTAGE RENT"..., LEASE YEAR, LESSOR-..
.11. _ no tongor Do /'MlUI'Id llIn'9 "" _ of "" ,.... olll'll LEASE 'A _ "" LESSEE..., __ wnn.,
Ncl\lCItoeur.......dllutI......_ongIl'IILEASE, TonnnatIOnol"",LEASE___.II_
""'-'1Iy \ClOIl "" da.. of __ of . """'" Ncl\lCI 01 T......._ by b LESSEE.
(., Upon...,............, ofll'll LIAS!. "" LESSOR may _\ClOIl "" PREMISES ---
""...., _.'IlII""LESSEEand__..-~.WI\IlOU1_gultyollll'/_oI_,--
~ 10"" _ _ rn9'l- tlO _lor "" _ 01 dollull" -"'", In "" ClIO of any.ucn
'onnnatIOn, b LESSEE.... O\dom'tfy "" LESSOR aganst II _ or clamIgI_ by"'- of "" I_DOn.
""*"""ll- 01 __ _"... .--_pay__'or "" _of b tarmlllO .....tor.
rnnatIDn not ........" and
...
"
..-
"'-"Y
-
_lot
A_....
No_ 'LII,qe
..Ioml......~
W.1Mro
e~~""0I1'WT'*'Y1'1ef'IiIn(Xlfl1.'1Id~0I ,.......... ,.... ~Vl' ,....uu..'''''''. _" ....... ...,.,
01 ""*'Y hIrW1 ~ prowtded DI pemwtllG:; but MCt'l a..&. Q.I'TlIAI.tr't'I at ......-; "* ngI'II or ,..,..."
----, .....
20, "'_ lot 1toI11III1f1l1 ponClmll/lCll of.. .'1toI LESSEE'S oIlIoga-....... LEASE, ItoI LESSEE
hnbr gnntIlO ItoI LESSOR. """ """" .. """*'Y .t ItoI LESSEE r<Nf '" _n. _lOll '-> ItoI PRE...ISES, .
ItoILESSEE --...........ItoIPRE...ISES...1Ily _ _ _'......,lOolllOlmIlyan IIlyClOIIUIl
i11lto1porr-tofllly_.dImIgO"'-POymontl_by'" LEASE, ItoI LESSOIlmoy_,->1toI PREM-
ISES, by_.~, ond lIlC. _.1..... Illy pon.t ItoILESSEE'S """*'Y._..._,
ond moy III..... Illy pon.t 'UCII-'f.t. puCloc... prMI" ....... -- -, -.out...... _1Cl
by low, 10 ItoI ftogftIIt _ lot ClIft, oncl moy _ ond _, on _ .11toI LESSa. II ilia.. LESSEE'S IIlII
ond "'_11l1tol """*'Y _ to ItoII'qlII1 _, TI10 ptllOIIClI.la...... ., a.. """*'Y _Ill_by a..
LESSOR towlt1lltol ....t .'1toI .... ond \IlOII towlt1la.. poymont 0111...... \IlOII """ by ItoI LESSEE to ItoI LESSOR
...-1toI.......t 1N1 LEASE- In .....10 _1toI LESSEE 10 tInInoIltoIlU'CNM of _, to 1lI_ '->
ItoI PREMISES. ItoI LESSOR ""'IllY _," Illy oncl..ltI", _10 a.. """ _ _'lClby LESSEE.
t.1toI """ gronllClby ItoI LESSEE t.1Ily 1lllId PIIlY 11....._..... _a.. ongNIlU'CNM 01_ .,a.._
IUCII __ II lint _ """" ItoI PREMISES clIJmg ItoIlorm .1'" LEASE-
21, AI rontII poymon"'orIlO IlIIn1d1IO a.. LESSOR., Pasl 0Wa Bo. 317, R
02311, AnN: RonlCantral 000_ L,_"onclllly_""'_IOIlI~ Ill... by_
IlllilIOItoILESSOR'lPastOWaBod17,RIIlClOlIlft,M . :VlaI_-fNnoI...Il1UC11
._ -. II ItoI LESSOR moy t.1l wntIlg 10 a.. LESSEE by _1llIII, Any...-
_10 III llI...bylllllllOa..LESSEE.tltol_lIl......iIIPIrIl1"l'ft2_
_ II ItoI LESSEE moy tram _ 10 _ _ .. wntIlg 10 ItoI LEllSOfIIIy _ moll.
22, ar...."""" wllvlroof ony_,_.........,...I___not Ill_a
. wliYlr of . tunhIr brNl:ft or aw &ImI ClDVM\&I\t. concItiOn or -vo-._,I CI' of "" DItW CIPtInInt. c::ordIil::ft or agrwe..
mont, ond ItoI can...... _II by ItoI LESSOR 10... at Illy ...1Iy a.. LESSEE -""lla.. LESSOR'S ........
...1llllIVYIl_notlll_taw...........-... "'Y1toI LESSOR'S _"'_IlIOIIlY_
......,...by ItoI LESSEE, TI1o_Pl byLESSOIl oI_..._poyIT*a_~IIIa.._by LESSEE
at lIly_al1N1 LEASE _not 1lI_. wIIVWoI__, ExOllll II 'JlllrUIlyIll """'..... LEASE.
........ PIIlY _Ill IIlio 101toI_ PIIlY....1O Illy iIIIurInoI~Cllyw.yat..aago_...."*_)1lIln"9
1toI_ PIIlY, lot Illy ....... dImIgO 10 Illy ~, ._... _ tongibII """*'Y, ... _ ..- ........'.
__IoWl..._fIlI, ._lI1CIOgII_ .......__ rnogftI___lIytlll...gogo.lOo at....,
PIIlY..._.........,.., EIdIIlIIty_ hnbrW....trtIlbyjuryllllly 1Ctlon, .....-oQ "'..............1Il""lI
out 01 "'_1Cl II Illy w,y _ hi LEASE...1toI LESSEE'S _ 01 till PREMISES, LESSEE. I... .... ona
on _ .1.. _ CIuTlIlg by. lMlogn "'...- LESSEE, 10 1toI1IAIIl.""", _by IIw, _1lIrwIIy w....
ond.....-.. nghto .,_, '"""Y ond/'" "'1""'-..., at till PREMISES.... Illy _...,..... 11_
23, (.1 AI..........,_",_ond~_iIIlN1LEASE__lOona
III bonding """" ItoIIIgIl FIIlI'I__, _101I oncl uaogna 01 tIlI_ __,
(b) 'IN. LEASE _llIvaid ondol no .ft.... tIlIUSSOR 1IIII1lI_100btaiII tIlI_.....
rntI. _ond _... tram..puCloc"""- t............- ........_.1 01 till PREMISES II ICCllI1IInOO
- till ....llOInonclllilnl ond _tIoI_. ClO.I':._~ Iotltol PAEMISES,In IIld ......1Ily_ _lClby""
LESSEE 11III llI"""'lIIy _by LESSOR ond 1toI_ _1lI_.t..... oIlIoga_~.
eel Notmg_in ...LEASEIIIII......tIlILESSOIl..onyWly._.joInl~...UIC)o
COlli _ ItoI LESSEE .. till __ 0I1toI PREMISES", .llbIIOt till LESSOR 10 Illy oIlIoga_, Iou. dlIIVO ...
ox_ WI .....oc:..... -"''"''''11 tram till 0PItI_ at ItoI PREMISES. _ II hnbr Il'VI" to II wnam n moy
_ at tIlIlcngc>ng,
IN WITNESS WHEREOf. tIlIlIld _ ___to III _ _ ond _ till Illy oncl,.. tlrtt _ wntlIn,
w, ~"i+:~~:~~~
eyW:/)..!:..~......,
W.~he8tnut
AMltdC4!t?l:..(!~/:,
Shirley H. Chestnut
MlecelJaneoul
SognICl, - - _Illtol cnwa .1:
~,~..U~~r''''''''''''''
",C9~b."\J{""""".",.""".""..",,,..
Wltnes.
SognICl, ___Iltlll~at:
r;#k~~l.!l..(!~" 1;;"/:,,.... ........,..
Shirley ~. - Chestn~' Secretary
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W.....
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5
CIIESTNUT ENTERPRISES INC. (!.ESSEE
~~~.~:4:~::i:i5l::::
W.~'~e8tnut President
..r;/L,'4:..f1:.~A' !:-~.
Shl:i~Ch..tn~~"
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.. .
,"""I
DlJl....,N' DONUTS INCORPORATED
~
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DDDA 08/88
PC 2684
Pt of imP 5150
FRANCHISE OWNER
DEVELOPMENT AGREEMENT
AN AGREEMENT dated thl. ~day 01 ~'.J 19~, by and between
DUNKIN' DDNUT8INCORPORATED, a Delawar. capor.tlOn h pnnc:lpal 0_ .t14 POCOUO PlII1< D~v., P,O, 8ox317,
Rondolph, W. 02368 (hot""",ItOt tho "Company") and CHESTNUT ENTERPRISES. INC.
. Pennsvlvania With principal offlces at c/o Dunkin' Donutl!l. 1186 Harrisbu'r'lI' Pik.
earli.l.. PA . 17013
(hotom.ItOt tho "UndOtsignod'),
RECITALS
A, Tho UndonIgnod ,. d.alfou. 01 doveloping . Dunkin' Donut. Shop 00 . patCOl '" 101 ollond located .t
930 \/olnulBottom Road. Carlisl.. PA 17013 lhoroinaltOt lho 'SIt."
Tho panIOO acknowIadgo thaI Ihla ogroomonl contempla'" thal.._ thO UndorIlgnod InIlOduc:od lho Company to lho
SI10 '" lho Company InIlOduc:od thO UndOtslgnod 10 thO Sit., .. thO caso may be,
8, Tho Company II WilIlng to rovIow Ihti Sit. I", .ultablllty... Dunkin' Donut. Shop Iocallon and,lI opprovocl,
to granl to tho UndorIlgnod . Ironchlso 10 """'.,. . Dunkin' Donuts Shop 00 lho Sit., provtdod \hol thO Undo<sIgnod
"*'\.) all 0' thO Company'. qullillc:atlOn. and _"I'" now, or II __t., mullklnIt tronchIso ownoro,
C. ThIs Agreement thai enumerate the respective r8sponlibllillelof the parties with respect 10 the Undo<sIgnod
undeftaklng to develop . Dunkin' Donuts Shop on the Site.
AGREEMENTS
In _.tlOn 01 thO lann., covenant. and condJlIonI _1t0t sol 1_, thO UndOtslgnod and thO Company
horobV _ u 'ollOwS:
_I: A_ol 01 tho SII.
1, Tho UndorIIgnod should rolaln on .Uomey and olhot odvIsoro In connac:IIon with negotiating thO ocquiaIIIon and
do\aIop/nol,1 01 thO Sit. ro" ..III., In addition to rovIowlng all _" wllh thO Company, Tho Company UIlUmOtl
no lability '" DllIg.1Ion 10 thO Undonlgnod or 10 any third party I", any usIltonco In nogotlallon thO Company may_
to provtdo, Although ~may cornmanloo thO Undonlgnod'. ro....III. negotiallonl, any .....tonco II provtdos
to thO Undo<sIgnod II no .ubstitut.l", thO odvIco ol_pondonl counaol, Tho Company wII not oct.. ogont, ompIoyoo
'" l1duciOIy 01 thO UndonJgnod I", tho purpose 0' .....tIng thO Undonlgnod In nogotlallon.,
2, Tho dovolopmanl 01 thO proposed Sit. .. . Dunkin' Donut. Shop mu.t be opprovocl by tho Company'.
Do.1IIopmon1 0IvI.1On and FInonco Commlnoo,.. _ SOIoly by wnUan noliCO sonl 10 thO UndorIIgnod by tho
__te DirlCt'" '" Vice Pr..ldanl 01 De>olopmant (tho 'Sila Approval Notice', Any roal..llt. commltmOnll \hol
tho UndorIIgnod m.y mak. must be .ubjlCt 10: I.) thO UndorIlgnod 00t0lnIng thO Company'. wrtUan ._. 01 tho
dovolopmonl by tho UndorIIgnod 01 . Dunkin' Donut. Shop 00 lho Sil.: (b) lho Undorsignod obtolnlng all I1OCOSIOI'/
pormiII,icon... and Iocol govommontal_all; and le).uch 0_ contlngondos U lho Undorsignod'l .nomey may
,_,.,~od, Tho UndonIgnod wII provtdo tho Company with . copy 01 any dood or Iooso '''' tho SlI., within Ion (10)
doyo IItOt tho .xocutlon and dolIvory _101 10 tho UndonIgnod,
3. Within s!xty (60) dlYs aher the date of this Agreement, the Company will undertake a preliminary review of the
SlI. and notity thO UndonIgnod whothot tho Sil. conl"",," 10 basic, p<otimJnory altorl. 0' tho Company (tho 'ProIIninory
SlI. Rovlow Lon.." In tho evonl lho Sit. dooo not moot IUCh altorla, lho Company wIU promptly rolund tho 'ronchIoo
dopooIt, whoroupon thO Fronchlso Agroomenl and on ollho partJoI' rlghto and obUgallonl _...-lIhalI cauo and
expire,
4. II. IftOt '-pl 0' tho Prolomlnory Sit. RovIow LoUOt, tho UndonIgnod dodd.1 10 procood with dovoIopmonl 0'
I QunlOO' Donuto Shop 00 tho Site, thO UndorIlgnod musl promptly oJgn and roturn to tho Company I copy 01 tho
~ Sit. Rovlow Lonlr and mult promptly hir. I uconsod orchltlCt whoso rosponslblllty oholI be (ij 10 Idopt tho
Company'1 gonorIc pIonl and lpodllc:allonl 10 lho "_lie roqulromonts ollho Sill, tho googrophlcol roglon In whIc:I1 tho
sn... located and the building COdeS and ordinance, pertinent to the SUe, (II) to OVItf'l88 the contractor'. compkItkln of
construction or the Dunkin' Donuts Shop on the Site, and (Iii) such other duties as the Undtmgned may requA, The
UndorIIgnod'l orchItlCt mU'1 promplly order I lopogrophic:al end boundary lurvoy 01 tho Sit. and.uch .... borIngl and
structural engineering test' a, the COmpany" COnstl'UCUOn Department and the UnderSIgned', ardWlect may requU
(horoinoItOt _OIy tho 'Roports1.
5, Approximototy IhlrIy (30) doy. IItOt tho Underslgnod roluml. s1gnod copy 01 tho Prollmlnory Sit. Rovlow loU""
representative, of the COmpany', Real Estate Department and Construction Depanment ViiI meet at the Sue with the
UndInIgned and the UndonIgnod's architect to evaluate the Site lor nnal approval and to establsh and coordinate the
respecttve responslbifitles of each of the penlas with respect to development of a Dunkin' Donuts Shop on the 8<<e
(ItoroInoItOt tho 'R.oponSlblllty Mooting" Tho Roports and coplos 01 zOlling Otdlnancot and by-laWI oppIIcobIo 10 tho
Sit. musl be brought by tho Undtmgned'l orchItoct to tho Responslbibty Mooting, I", tho Company'I r.vIOw, In tho evant
any luch Roportl '" tho Underslgnod'l orchItlCt aro not Ivllllblo when roquirod, thon tho ResponSibility Mootlng_
be postponed and,lr apptic.able, the Company's out-of-pocket costs for representatives to attend wi be reImbtnId
by thO Undtmgned Wllhln Ian (10) doy. IItOt demand,
8, In the lVent the ResponSIbilIty MHuno IS postponed because either the Understgned', archi1ect or any of the
Reports tI not available when required, the Company shaI have the nght, et It I Ide discreUon:
(e) to order such Reports as the Company shall deem necessary lor Its review or the Site, The COlt 01 such
Roport. IhoI be _sod by tho UndonIgnod, w,thin ten (10) dlya IItOt demand, Tho Company mak.. no
representation Of' warranty abOut the completeness or accuracy of any Report ordered by the Company on behalf of the
UndInIgned; and/'"
(b) to rnchldule the RlSpon~bl~ty Meatmg, based upon a firm comtnItment from the UnderJ91ed', architect
that the architect and/Of' Reports WIll be avwbll W1Uun no more than thirty (30) addltional days; and/Of
(c) to temmale thi, Agreement and the Franct1l5e Agreement, II, in the good t8lth judgment of the Company, the
Under19*1 has filled to elltose reasonabMI dl"Oence 10 comply With thO tenns 01 this Agreement In the event at such
terminatiOn, the UnderSIgned W1lforf81l the franctuse depoSIt
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WlU1In IhiI1y (30) d.y. .111< lhe R..ponllbdily Mlllong I.k.. place tho Ccmpeny will notJly Iho UnderIlgnod 01 n.
final approval (the "Sit, Approval NotlCel or dillpprovll of the Sill. In the Ivent the Sltl II disapproved. the Company
will promptty refund the Iranchl.. depCKll. whereupon the Franchise Agreement and .. 01 the parties' Oghll and
obIlgItIonIlhIrN'ldIr IhaII eea.. and IJlplfl.
7. The Company'. Ipproval 01 the Sitlll not a reprlaenlaUon or . Watrll'lty lhIt the 0l.nM' Donuts Shop will be
proltI_ Ot IIlat IhDC> -. W. _. COlli'''' lev..., III111<11y mell1l thlltho I'*'Imum aIlerta which Iho Compeny
hu ..__ lOt _~1yIng .iI.. lOt propoHd Dunkin' Donut. Shops hi.. bien mot, IlIcauHII'<>p d'heiqlmlt,t"
not . pndM 1CiIncI, tho UOOII'IignId _ thll thI Ccmpeny'.epprovlll Ot dI_II 01 . d4r;1iopmIn11ll1al not
ImpoH eny IOIbiliIy Ot oI>Ig.11On on .hI Compeny, The __ to lICCOpl Ot r.jICt. penlCulIt IhDC> de,llopment litho
UOOII'IignId'" .ubject to tho Ccmpeny'. Iinlll epprovlll, Prlllmlnlly epprovlll 0' tho 511. by eny IocIII Ot rogionII
ropmentallvel') o'lhe Compeny.. not conclulll.. Ot t>ndlng, blcaUlOlhoir rlICOIM1Olldatlonllmoy be rljeCtlCl by tho
Compeny,
8. The COmpany" approval of the Sitl for development I' . Ol.I'lkln' Donut, Shop I, IUbfect to the Compeny'.
approvll of the Underaignecl'l qualification 10 obtain. Dunkin' Donut. franchise lor the Sill, I' hereNher Nt fOl1h.
8ectton III Appro".1 of the Und'''lgned
1. The Undenlgned'. qUlliflcatlonl to obtain. Dunkin' Donuts IrandUlI or, if the UOOII'IignId 18 already. DunJm'
Donut, Franc:hIM Owner. forlllpanslon a.. muttl-unlt owner, mult be awoved In wntlng by the Compeny', FrancNse
_ MI/1IgII' Ot DlrIclOt,ln lhe .venllhe Compeny dlaeppro...tho qullllflcellon. 01 tho Under1IgnId. withln...ty (60)
daY' 01 tho dal. o'lhi. Allr_" tho Ccmpeny will promplly ,.tund tho UnderIIIgnICl'. II1II1ChlIO dlpOlll. whoroupon
tho FrencNIe All_lend III o'tho perlin' rightaend ollUgallon. _1II1aI .....end .xpire,
2. Tho Compeny'. _vIII 01 tho UndefoIgnld I. nol . '""'"""tallon Ot WIIrIIlIy Iholtho Under1IgnId wII be .
.UOCOI"ul DunkJn' Donut. 'rend'ollOowner, II I11I<IIymoen. Ih.1 thomlninumcrllertawhlch Iho Compeny hu..1IbIIhod
for qualifying Ila prospective franchise owner. have bien met. The IUCCeIsfuJ operation at a Dunkin' Donutl Shop II
dependent upon the continUous, ongoing akll, .rrons and dedication of the tranchlM owner, among many tactcn.
AocordIngly.1ho UndefoIgnld .gtIIS Ihltlho Ccmpeny'. .pprovlllo< dl..pprovll o'lho UnderIIIgned ..II nollmpoH
eny _ty Ot ollUgallon on tho Ccmpeny,
8ecdon III, Execution 0' Documlnt.
1, SImultaneously With the executiOn at this Agreement, the Undersigned has executed and delivlfld to the
Compeny, In trtpCicale, the Dunkin' Donuts Franchtse Agreement for thl Sit..
2. Tho UndefoIgnld ShIIII .xlCUl. such other documenta end .greemonl. U If8 CUslOlNll1ly required by tho
Compeny In SUCh clrcumsllnCetl, including, I' .pproprtIl., . .tanden:l larm 0' mutUII crou gIJIf8I1ty with II __
prqlrtelOtlhlf>S. pennenhlps endlO< COtpllfIlIon.th.1 opIfIl. other Dunkin' oonuta Shops In which tho UnderIIIgned (Ot
any one of them) have or has an Interest,
3, To ensure the continued availability 01 the Site 8Ia Dunkin' Donuts Shop, in the event the Franchi.. Agreement
or, if appropriate, the Und~ned'l leaN at the Sltl IhouId evil' be In detault dwing the term thereof, the Company
wII hlvelho right 10 ..sumo Iho UnderIIIgned'.Io..., I'tho UndefoIgnld 1o....1ho 511. 'rom 1I101hor,If Iho UOOII'IignId
owns the Sltl, the company wiU have the right to lease thl Sltl on negotiated terms comparable to thO.. under wtich
Iho Ccmpeny 10.... comperlbl. property 'rom olh8rl, Ag_ta sccep.- 10 Iho Ccmpeny conllrmlng those rtghle
must be signed prior to the commencement at constructIOn at the Dunkin' Donuts Shop on the Sltl.
4, The Undlt'llgnld, Including lI.uccessor(.,Ot ..sig~.),.. Frend'ollOOwner, end th. owner o'tho SlI. ,.1II..ta,.
must agree to complete de4dentlflcatlon 01 the InUtnor and Ixtenor ot the Dunkin' Donuts Shop, upon the Company',
request, It the Franchise Agreement ')lpires or Is tennlnated lor any reason. Surtl de-identiflcatlon Is to be completed
at no IXpense to the company and within thlny (30) days aher expiration or terminatiOn 0' the Franchise Agreement,
SIctIon IV: Flnanctng
1, PI1orlo Iho _, 0' con.lrucIlono' tho Dunl<ln' DonulS Shop on tho 511., tho UnderIIIgned III1aIpmvtde
IYIdence latls'actory to the company that cash and/or flnandng is '" place, IUfliclent to fund completlon 01 amtructlon
and purchase at necessary equipment and algns. Dunkin' Donuts assumes no obligation to guarant.. the tundIng or
IInInc:Ing O'tho UnderIIIgnICl'. conslruc:llon projlCt.
2. The COmpany WIll not guarantee the Underslgned's mortgage, lease or other real estall related obtigadonl. II
the COmpany, at Its election, finances or guarantees lhe tinancing 01 the UnderIIIgned'. purchase at or leasing of
equlpmenlend/Ot sign., Iho owner O'tho 5n. r.III....'. muslllgflO th.ltho equlpmenlend ligns It. not Iilltum (perl
of the realty) and must waive any and aD ,"Ientst in the equipment and/or signs. In this connectlon,lhe owner 0' the SIte
re. estate must algn sUCh Olher reasonable documents as are customarily required by the Company.
Sectlon V: Devllopmlnt 0' thl Dunkin' Donut, Shop
1, The D....kil' Donuts shOp must be deve40ped and constructed In strlct accordance with the Company's current
I'*'Imum stlndlrd.. procedur.., plen., .pecillcelion. end documenl.lIon (_.hl< colIIctJveIy tho oRequir_").
2. The Company assumes no responSiblUty for evaluallon 0' the Site', 101I for toldc or hazardoul aubstancn, or
'or InIpectlon of any structure on the Site for asbestos or other loJUc or hazardous materials. Ills the Unders9Mtd'slClll
,..ponsHty to obllin '.~".ClOt'f IVklInce end/Ot ...urence. thlllho 511. (end sny .1tUelUreS Ihoreon) If8 tree from
envtroIll'nIl.tal hazards.
3. PI10r to the commencemenl 01 con.lnJClIon 01 tho Dunkin' Donut. Shop on tho Sl'., Iho pions end .peciftcatlonll
prepered by Iho Under1IgnId'.1ItIll11Cl musl be revtewICl by tho Ccmpeny'. conslrucllon De_lend __
'0< compllence with tho Compeny'. delign RequlremenlS,
4, The Ccmpeny's ConstructIOn Depenmenl ShIIII hlv. lhe righl 01 lolly upon Iho SI.. ., IIIJmIs, 10 InsplCllho
COIlItructIon In prog,...,Ot tho purpose o'ensunng Ihold Requlrementalt. being mel. The Company'. Conslrucllon
~.... nollCl .. enlt1:l1illCl Ot IgInI o'tho UndlflllgnlCl, 1l1I Conslrucllon M""-'. duties If8 _1OIIIy
10 lIISurtng Ihollho Ccmpeny'. Requlremenl. If8 mel on tho SlI., The UnderIIIgned III1aI not rely upon sny "'**'""
.llpIOSHd by tho Conslrucllon M""- regen:llng ._Inlegrtty, IOI.ty Ot COIlItrucIlon _. bulIdlng 00dI0
Ot onInInCes Ot __ moll... proper1y wiIhIn Iho ,..ponsNty ollho Under1IgnId'.It1:I1iIICl, 1l1I Compeny.......
no IIIIlIity Ot ,..ponSibilty 'Ot IItIllllClurll Ot "Ill' -'Ill judgmlnlS oulSide Iho scope 01 tho Construction ~.
.talld duties,
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5, IleI""'thelhopll_lo.J::J., theUndor_mualoOlllnthe~,"l..lIotthecana_
at the building, ~I. 1m_" II1d IandIcoping II1d lhe Inllallluan 01 II Ilgnl II1d oquipmont, Tho ~'.
approval of conlU\lCtion 01 the Dookin' Donuts Shop II not I reprnentlUan Of . Wllflnty thai the DunkJ1' Donuta Shop
hu -. canatructod In _ with ony IIChllocturllor onv.-.ng "_I tor doIlgn or wart""onlh/p, Ilmnly
_thel the Campony II "billed lhalthe ""","",",roquir_lI_the~ hun__lor_toncy
01 doIlgn II1d lOyaut have -. mol. Tho UndorsIgnod Igtlllthalthe ~'I _II 01 cana_ at the llunkkl'
DanuII Shop IhII nallmpoao ony i_tv or abllgollCln """"the Compony, Tho UndorsIgnod II.. _thalll_
II1d rooIlIlIlI documonllllCln mull be com""lO II1d 1lI1nl111l poymonll mull be _ by the Campony botare the
llunkkl' Donutl Shop II _.
Iectton VI: O,n.,.1 Prowl.lon.
1, The UndorsIgnod hereby repre""" 10 the Company lhaltho UndorsIgnod wllI ha"the loIawtng roIIllanIhIp_
the _ orlendlatd 01 the Slle (place on 'x' In tho opproprtale box):
[J tho Slle wllI be owned by on Indopendonlthlrd pany IlI1dlOrd With _Ihe Undorligood Wit no''''''' or moJnllln
any common part/'Ief',lha1ehoIder. officer, director. trultee, beneficiary, lamiIy membtr or other 601....1; or
[J the Slle W1I be owned by . IhIrd pany londIOrd With _ the UndorsIgnod wi' ehoto or moJnllln . COITlIIlCl11
~, lharehOldef', offlcer, director, lrultee. benendaty, family member or other Int...t; or
[J the Sit. Will be owned by . _lIOn, tnJel, por\11IrINp or 0_ enllty conlrollOd by lhe Unclonlgnod: or
[J the Sile Wit be owned by the IIIllI enbty thol will oxecule the DunkJn' Donutl FrenchI.. "-I,
Tho Undorolgnod IIIall prampUy advt.. lhe Company II Ihont I. ony chango, whll_, In the roIIllanIhIp
"""""Iod above,
2. ThIt Agreement does not constitute the Undersigned an agent. legal repflHntlltlve, )oint venturer. partner,
emplayoo or_onl 01 the Company tor ony putpOII whllIOe'O<: lhe Underligood IIIall be on Indopendenl con_
and lIln no way authOrIzed to make any contract. agreement. warranty or representatIOn on behalf of lhe ~ or
10....10 ony oOIlgallOn, oxpro.. orlmpllod, 00 bohaIl at lhe Company, Tho partJoa agrOllhal1No Agrooment daoo not
create. flduduy refatlonShip between the Company and the Und8flIg~.
3. Under no circumstances shall the Company be Dable lor any act. omission. debt or any other Obligation at the
UndorsIgnod, The Undorolgnod IIIalllndomnlfy II1d .."th. Company harmlnl agaInll ony IUCI1 claim II1d the casl 01
dolondlng agaInlleuch cIaIn1s art~ng dlrlCtly orlndlrlCtly from, or II a rellil at, orin cannoc:IICln With, tho UndnIgnod'l
do'alapmenl 01 a Dunkin' Donut. Shop 00 the SilO,
... No fdure of the Company to exercise any power reserved to it hereooder. or 10 '"lilt upon strict compIance by
. the UnderIIgned with any obligation or condition hereunder. and no QJstom or practICe at the parties In variance wtth the
terms hereol.1haII constitute a walv8f of the Company's righllO demand strict camplance With thlterms hereot WaJver
by the Company 01 ony particular dollull by the Underllgned IhII nall"oct or Impair the Company'l right With respoet
to any Subsequent default 01 the same or 01 a dinentnl nalW'e.
5. AI noticeI hereunder Shall be dellv8fed assel forth 10 Paragraph 13 of the Franchise Agreement.
e. ThIs Agreement, and the documents raferred to herek11haJ1 be the entire, lua and completelgreemenl between
the COmpany and the Undersigned conceming the subject mall8f hereor. and Supersedes aa prtor agreements, no other
representation having induced the Undersigned to execute this Agreement; and there are no representations,
inducements, promIsH or agreements, oral or Otherwlse. between the parties not embodledherein. which are 01 any force
or '''ect With reference 10 tNs Agreemenl or otherwise. No amendmenl, change or variance lrom IhI1 Agreement IhII
be bRllng 00 _ pany unl... oxeculod In WIlling, Each 1IC1ian, pan, Illmlll1d pravtslCln at thI. Agreemenl IhII be
conaIdIrId IlverabMJ, and II, for any reason, any section. part, tenn or provision herein is detennlned 10 be invdd and
contrary to, or In conrllc1 With. any exllthg or future law or reoulatlon 01 a court or agency having valid lurisdIctlon,lUCh
Sh8I not knpaI' the operation or affect the remaining portionS, Sections, pans, terms or provillons of this Agreement. and
the latter Will continue 10 be given Iud force and enlet and bind the parties hereto; and said invalid sectiOn. pari, term
or provfSUIlhaI be deemed nol to be a part 01 this Agreement.
7. ThIs Agreement IhaII be Interpreted. construed and governed by the laws 01 the Commonwealth 01
Massachusetts.
8, Nothing _ conlalned !IhsII bar the rlghl 01"_ pany 10 obllln Injunctive '...., agalnSllhreatenod conduct
that WiI caulllos. or damages, under the usual equity ruie., induding the applicatH rules for obtaln6ng prIIImNry
Injur1CllClnl,
9, Tho Underalgned rapreaenll thaI tha Undersigned has rocolYod lrenchlse ..... disdalure _lIlram the
Company at least filteen (t5) calendar days prior to the date the UndeBIgned executes this Agreement. The UnderI9Mtd
acknowledges receipt 01 this Development Agreement, together with any amendments, at Jeasl flye (5) days prior to the
dalO hereol,
IN WITNESS WHEREOF, the parties have hereunto set their hands and seal. on tne date ftrst wntten above.
AUnt:
D~ DONUTS INCORPORATED
by J..)o~ ~o 0 _
David B. Heller
DIt8ctor of D8Y8lopmeri & Opelllllonl
SIlClIl8IY
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INC.
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SHERZFF'S RETURN
CASE NO. 1995-01227 P
COMMONW~TH or PENNSYLVAN%A.
COUNTY or CUMBmlU.AND
DUNKXN DONU~. %NCORPORAT~D
VS.
CHESTNUT SNTERPRXS.. %NC
MXCH1BL &A~CK . 8h.~~rr 01:' Deputy 8heC1rr or
CUMBERLAND County. p.nn.y1Yan~a. who b.~n9 du1y .wo~n aQaoEd~ng
to 1aw, aay., that he ..eyed the w~th1n
COMPLAXNT - .QU%TY
upon CHESTNUT. JOHN
the
dar.ndant, at
830100 HOURS, on the ~Sth day or March
,
19l1 at
1186 HA~8BURG P%kS
CARL%SLS. PA 17013
,CUMBIiZRLAHD
,
County, pennay1van1a, by handing to
JOY RENN%NCER
MANAC&:I\ AND ADU%.T XN c:HAJ\aSJ
a true and att..eed copy o~ the
COMPLA%NT - EOU%TY
,
and at the aam. time directing ~ attention to the contenta thee.or.
She.d,.rr'a COllt1l1
DOCketing
Serv.:Lce
A!:'!:'idavi t
Surcharge
6.00
.00
.00
2.00
80 aneweCII) ~
.,,.,..LJ /,9 .~'- A
l' >>~.._~~
fl. Thomall K1in , Sher.:L:I:'t:'
SB.OO ABRAHAM, PRESSMAN 5 BAUER
0:3/15/1995
by
~~-Z-~~ ~
Deputy She"i
Svocn and lIubaaribed to baror. m.
thill ;,~.....a.. day o!:,71~
19
q(
A.D.
, "
\_-)'1/' - c. )~1,""" (~.
prothonot:ar
.
SWIlIUFF'S I\lIlTUNI
CASIl NO. 1...-01227 P
COMMONWIllALTW OF PIlNNSY%.VANrA.
COUNTY OF CUMBllftLAND
DUNKIN DONU~. INeOARORATmD
VS.
CHESTNUT mNTmRP~8E8 %NC
HrCHA~ BA~CX . SheE~~~ OE Deputy SheE~~~ o~
CUMBERLAND county, P.nn.y~Yan1a, who b.~n9 du~y aworn aaaoEd~ng
to 1aw, gay., that he ..Eved the v~th1n
COMPLAINT - .QUI~Y
upon CHIlSTNUT JOHN DOUCLAS
the
der.ndant, at:.
B30.00 HOURS. on the 10th day o~ HaEeh
.
19U at
1188 HA~8BURG PIKm
CARL%8Lm. PA 17013
,CUMSlaR%.AND
.
county. Penn.y~van~a. by hand~ng to
.:my IlENN%NQIiCIl
HANAaIJR. AND ADU%.'1' IN c:HAAaIl
a true and att..ted copy o~ th.
COM~LA%NT - EOUITY
.
and at the aame t~m. d1rect,1ng ~ attent10n to the contente t:.h.r.o~.
Sh.ri~r'. Coatat
Doell:et~ng
SGlEV1CQ
A~~~dav~t
SUEC!haEg'8
6.00
.00
.00
2.00
S:'~~ ~
rq>~- ~
R. Thoma. ~n., 8h.r:1~r
GB.OO ABRAHAM. PI\lIlSBHAN .. BAUIl"
03/15/1995
by
/}
~L L' /-
-~"....:.~ '" .,r7 /.1 y......
7-' .'f!.J "-c"'~/~_<
Deputy Sh~E~~~ '
Sworn and 8ubacc1bed to baror. m.
th~.
,.I.J .,.,.{ day
"",(
, A.D.
o~7na"u
19
---
( ., ..
'--L'L-- () /yt...lYL_/ L~"'f
I I PEot:honotaEY '
8HSR%FF'8 ~TURN
CA8S NO. ~"5-C~ZZ7 P
COMMONWIlAZ.TH OF PSNN8YLVANJ:A.
COUNTY OF CUMBSftLAHD
DUNK%N DONUTS %NCORPORATmO
VB.
CHS8TNUT SNTSRPR%8S8 J:NC
WESLEY COOX IF .h.C1~r oc D.pu~y .h.X1r~ o~
CUMB~RLAND county. pennJly1vania, who bein9 du1y IIWOEn aacoeding
il
Ii
a true and att..ted copy or the
COMP~J:NT - SOUJ:TY
.
to 1aw, gay., that he ..eyed the within
COMPLA7NT - EOU%TY
upon CHS8TNUT W 30HN
the
d.:I!'andantr at
850100 HOURS, on the 20th day or H.cah
.
1.9U at
~~B6 HARR%8BURa PJ:KS
CA~J:8LS. PA ~7C~3
county, p.nn.y1van~a, by handing to
, CUM BllJU.AND
.
W. 30HN CHS8TNUT
and at the aame time directing Hi. attention to the content8 'thee.or.
Shec.:lrrt'.. CO.tlll
Docll:etin9
S8cv.:Lce
Af:f::l.clav:l.t
succ:harga
6.CC
.CC
.CC
Z.CC
80 ;;::ff}::..~.c:~~
R. Thoma. K11n., Sh.c~rr
SB.CC ABRAHAM P~88MAN 5 BAUSR
c3/z~/~995
by
~fftta~
sworn and JlubJlccibed to baror. me
th:l...
clay of:
A.D.
~9
prothonota'Cy
8KIllUrr' 8 NIlTURN
CA.1l NO. 1...-01227 P
COMMONW~TK or PIlNN8YLVANXA.
COUNTY or CUKBIlIUoAND
DUNKIN DONU~. %NeO~OftAT.D
va.
CHmSTNUT IiINTCRPR%8mS %Ne
.12SLIi2Y COOK
. 8he~~rr O~ Deputy 8he~~rr or
CUMBCRLAND county, P.nn.y1Y.~a, who being dU1y .wocn aaaocd~ng
to 1aw, .ay., that he ..eved the w1th1n
COMPLA%NT - IiiIOU%TY
upon eHSSTNUT 8HZRLBY M
the
d.r.ndant, at
8&0.00 KOURS, on the &2Sh day or M.~ah
.
1'J!A at
1188 HA~..URa PZXS
CARL%8LC. PA 17013
, CUM BIiiIPT1to.UD
.
county, Penn8y1vania, by handing to
.. JOHN eHIiI8TNUT
ADULT IN CHAJ\a1l
a true and att..ted copy or the
COMP~%NT - &OUZTY
.
and at the .ame time directing ~ attention to the content. ther.or.
8hec:Lrr'lI C:01l1:8.
Docl<et2.ng
..lC'v.:Lc::.
Arr~dav~ t
surc:hacg_
6.00
.00
.00
2.00
So anllwer..
~a,/ - ~~
..,. kff;....-.4!
~. Thoma. ~n. Sherirr
&8.00 ABRAHAM PNIl8aKAN c BAUIl~
03/21/1995
by
//-4#J:<;!'/tJ
Dep a e~~rr
Sworn and 8ub8cr:Lbed to bareee m.
th~"
day or
1.
A.D.
prothonotary
,
ABRAHAM PRFSSMAN & BAUER P.C.
BY: Arthur L. Pressman, Esquire
ConstanUne T. Fournarls, F8qulre
Identlncatlon Nos. 10124/63902
1818 Market Street, 35th Floor
PhUadelpbla, PA 19102
(215) 569-9990
Attorneys for Plaintiff
DUNKIN' DONUTS INCORPORATED
P.O. BOX 317
RANDOLPH, MA 02368
.
.
Plaintiff, .
.
vs.
.
.
CHESTNUT ENTERPRISES, INC. .
.
W. JOHN CHESTNUT, .
.
SHIRLEY M. CHESTNUT AND .
.
JOHN DOUGLAS CHESTNUT .
.
ALL PURPORTING TO .
.
T/A DUNKIN' DONUTS AT .
.
1186 HARRISBURG PIKE, .
.
CARLISLE, PENNSYLVANIA 17103 .
.
AND AT 930 WALNUT BOTTOM ROAD .
.
CARLISLE, PA 17103 .
.
.
.
Defendants. .
.
~MAR 13 1995 J-
COURT OF COMMON PLEAS
CUMBERLAND COUNTY
~ACTIONNO. q!,'./.),n ~
-,-~
RULE/ORDER FOR HEARING
AND NOW, this 1f.!!- day of YJuLrL , 1995, upon
consideration of the Petition for Preliminary and Permanent Injunction filed by plaintiff Dunkin'
Donuts Incorporated.
IT IS HEREBY ORDERED:
OUNKIN\tHESTNUT\CHESTNUT.INJ 800-02684
That defendants are to show cause why a Preliminary M.d F......lhlCftt Injunction <.:(
should not be issued in accordance with the relief requested by plaintiff. The hearing on the
issue of the Preliminary and Permanent Injunction shall be held at the Cumberland County
Courthouse, Carlisle, PA, Room 1[- ,on the ,~j..day of ~ A rL , 1995, at
~ o'clock ~.m.
1.
DUlIKtN\CllEITNIIT\CHESTNUT .INJ 800-02684 -2-
, ' .
\' lj ';. <.~.,. '.
U'.. .. .,.,
I ",'~j. (';'.. --; 1;" ~n
^\jrl" 'i . -. ,1l1"J
)<'1 ' '. ~O
," ;.'
56. H'i 6 ~ 01 S I H7H
..
-:-.....--...
ABRAHAM PRESSMAN " BAUER P.C.
BY: Arthur L. Pressman, Esquire
Constantine T. Fournarb, Esquire
Identification Nos. 10124/63902
1818 Market Street, 35th Floor
PhUadelphla, PA 19101
(115) .569-9990
Attorneys for PIalntUT
DUNKIN' DONUTS INCORPORATED .
.
P.O. BOX 317 .
.
RANDOLPH, MA 01368 .
.
.
.
Plaintiff, .
.
V5. .
.
.
.
CHESTNUT ENTERPRISFS, INC. .
.
W. JOHN CHFSTNUT, .
.
SHIRLEY M. CHFSTNUT AND
JOHN DOUGLAS CHESTNUT .
.
ALL PURPORTING TO .
.
T/A DUNKIN' DONUTS AT .
.
1186 HARRISBURG PIKE, .
.
CARLISLE, PENNSYLVANIA 17103 .
.
AND AT 930 WALNUT BOTTOM ROAD .
.
CARLISLE, PA 17103 .
.
.
.
Defendants. .
.
LMAR 1 3 rg95 ch'---
COURT OF COMMON PLEAS
CUMBERLAND COUNTY
E'Iu,'1-y I'.~
eptII. ACTION NO. <1 j- - I:J.J 7 T I
-r..t"v,...
EMERGENCY
PETITION FOR PRELIMINARY
AND PERMANENT INJUNCTION AFrER NOTICE AND HEARING
OF PLAINTIFF DUNKIN' DONUTS INCORPORATED
Plaintiff, Dunkin' Donuts Incorporated ("Dunkin'"), by its undersigned counsel,
petitions this Honorable Court to enter a Preliminary and Permanent Injunction against
defendants, and in support thereof, avers the following:
OUNKIN\CHESTNUT\CHESTNUT.INJ 800.02684
1. As set forth in Plaintiffs' Civil Action Complaint, a copy of which is
attached as Exhibit "I" , Dunkin' is a national franchisor of donut shops. Dunkin' instituted the
above-captioned matter to preliminarily and ultimately permanently enjoin defendants from using
Dunkin's trade secrets, confidential information, signs, symbols, slogans, proprietary marks,
name or any methods associated with the "Dunkin' Donuts System", all of which defendants are
using without authorization. Dunkin' also seeks to enjoin defendants' operation of donut
businesses in violation of a valid and enforceable covenant not to compete agreed to by the
parties.
2. Dunkin' is engaged in the business of, and has acquired valuable
experience and skill in, developing and operating national franchises involving the production,
merchandising and sale of donuts and other related products through the use of specially
designed buildings, equipment, accessories, identification schemes, products, management
programs, standards, specifications and proprietary marks, all known as "The Dunkin' Donuts
System. "
3. Dunkin' owns the mark and related logo "Dunkin' Donuts", which is a
federally registered trademark. Dunkin' and its franchisees have continuously used and
advertised Dunkin's trademarks which distinguish its franchises from similar businesses and are
widely known and recognized by consumers.
4. Defendants Chestnut Enterprises, Inc., W. John Chestnut, John Douglas
Chestnut and Shirley M. Chestnut executed a Dunkin' Franchise Agreement dated August 25,
1992 for the operation of a Dunkin' Donuts Shop in Carlisle, Pennsylvania and executed a
second Dunkin' Franchise Agreement dated April 16, 1993 for the operation of another Dunkin'
DUNKIN\CHESTNUT\CHESTNUT.INJ 800-02684 -2-
Donuts Shop in Carlisle, Pennsylvania <collectively "the Franchise Agreements"). The Franchise
Agreements are attached to the Complaint as Exhibit "A".
S. Under the Franchise Agreements, defendants agreed to pay Dunkin'
continuing franchise fees <'4.E.) and advertising fees <'4.F.), and submit weekly sales reports
<"S.H.l and 9.F.l).
6. After defendants had failed to make substantial franchise and advertising
fee payments and had failed to submit multiple sales reports, all of which constituted defaults
under the Franchise Agreements, Dunkin' gave defendants an opportunity to cure their defaults
by sending Notices to Cure giving them an opportunity to cure their defaults. Copies of the
Notices to Cure are attached to the Complaint as Exhibit "C".
7. Defendants failed to cure their defaults. As a result, Dunkin' terminated
defendants' Franchise Agreements for failure to pay continuing franchise and advertising fees
and for failure to submit weekly sales reports. Defendants' Franchise Agreements were
terminated by Notices of Termination sent to defendants. Copies of the Notices of Termination
are attached to the Complaint as Exhibit "D".
8. Despite termination of defendants' Dunkin' Franchise Agreements,
defendants have refused, and continue to refuse, to cease their use and misappropriation of the
Dunkin' Donuts System, and continue to hold themselves out to the public as authorized Dunkin'
franchisees when they no longer have a right to do so.
9. Dunkin' is immediately, continuously and irreparably harmed by
defendants' refusal to cease their use of the Dunkin' Donuts System in that:
OUNKIN\CHESTNUT\CHESTNUT.INJ 800-02684 -~
(a) Defendants misrepresent to the public on a continuing basis that
they operate "Dunkin' Donuts" retail stores and are authorized Dunkin' franchisees when, in
fact, defendants have no such relationship with Dunkin'; and
(b) Defendants wrongfully avail themselves of the goodwill,
advertising, marketing and other activities of Dunkin' to the detriment of Dunkin' and all other
Dunkin' franchisees in defendants' area who properly pay fees to Dunkin' for said services.
(c) Defendants' conduct injures Dunkin's relationships with its existing
and prospective franchisees.
10. Defendants' Franchise Agreements also contain post-termination covenants
against competition, restricting defendants from operating a donut business for a period of two
(2) years after termination and within five (5) miles of their former Dunkin' Shop locations or
any other Dunkin' Shop.
11. Defendants' continued operation of donut businesses at their previous
Dunkin' Shop locations is in direct violation of the post-term covenants not to compete.
12. Dunkin' believes, and therefore avers, that there is a high probability of
success on the merits in this case in that defendants are openly violating their Dunkin' Franchise
Agreements by representing themselves as "Dunkin' Donuts" retail stores when, in fact, they
are no longer so authorized, and further because they are operating donut businesses in violation
of the post-term covenant not to compete.
13. Dunkin' believes, and therefore avers, that defendants have profited
unjustifiably from the use of Dunkin's trademarks, tradenames, confidential information and
proprietary materials subsequent to the termination of their Dunkin' franchises.
OUNKIN\CHESTNUT\CHESTNU1.INJ 800-02684 -4-
.
MAR 13 199~""
ABRAHAM PRESSMAN " BAUER P.C.
BY: Arthur L. Pr-......n, &quire
CoDStantlue T. FOUI'IIlU'is, &quire
IdentlOcation NOI. 10124/63901
1818 Market Street, 35th Floor
Pbi1adelphla, PA 19101
(115) 569-9990
Attorneys for Plaintiff
DUNKIN' DONUTS INCORPORATED
P.O. BOX 317
RANDOLPH, MA 01368
COURT OF COMMON PLEAS
CUMBERLAND COUNTY
.
.
.
.
.
.
.
.
PIalntiff ,
.
.
vs.
.
.
.
.
CHESTNUT ENTERPRISES, INC.
W. JOHN CHESTNUT,
SHIRLEY M. CHESTNUT AND
JOHN DOUGLAS CHESTNUT
ALL PURPORTING TO ,
TIA DUNKIN' DONUTS AT
1186 HARRISBURG PIKE,
CARLISLE, PENNSYLVANIA 17103
ANDAT~OW~BOTIOMRO~
CARLISLE, PA 17103
.
.
- .
~$;;' t-IJ 9!i. ~ E..~L
A'CTION NO. j;) j'j - 0' r ~
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Defendants.
.
.
. .ORDER
AND NOW, this
, 1995, upon consideration of
day of
Plaintiffs' Civil Action Complaint and the Petition for Preliminary and Pennanent Injunction
filed by plaintiff Dunkin' Donuts Incorporated, and after notice hearing, it is hereby
ORDERED that defendants are preliminarily enjoined from:
OUNKIN\CKESTNUl\CKESTNUT.INJ 800'02684
.
:i
.~
Jr.
t~
"
~.:~
.
-
<a) Using trade secrets, confidential infonnation, signs, symbols, slogans and
proprietary marks belonging to Dunkin' Donuts Incorporated; and
(b) Using Dunkin' Donuts Incorporated's methods of production,
merchandising and sale of donuts and other related products, through the
use of specially designed buildings, equipment, accessories, identification
schemes, products, management programs, standards, specifications and
proprietary marks, all known as "The Dunkin' Donuts System"; and
(c) Occupying or using the premises of their fonner Dunkin' Donuts Shops
located at 1186 Harrisburg Pike, Carlisle, PeMsylvania and at 930 Walnut
Bottom Road, Carlisle, Pennsylvania in the operation of donut businesses.
BY THE COURT:
1.
DUNKIN\CHESTNUT\CHESTNUT .INJ BDCI-D26ll4 -2-
,
ABRAHAM PRESSMAN & BAUER P.C.
BY: Arthur L. PI'" ...An, F&qulre
CoDStantlDe T. FOU1'DIU'it, F&qulre
IdentIDcatloD NOI. 10U4/63!102
1818 Market Street, 35th Floor
Pbi1adelphla, PA 19102
(215) 569-9990
Attorneys for PlalntUT
DUNKIN' DONUTS INCORPORATED
P.O. BOX 317
RANDOLPH, MA 02368
P1alntUT,
vs.
CHESTNUT ENTERPRISFS, INC.
W. JOHN CHESTNUT,
SHIRLEY M. CHESTNUT AND
JOHN DOUGLAS CHESTNUT
ALL PURPORTING TO ,
T/A DUNKIN' DONUTS AT
1186 HARRISBURG PIKE,
CARLISLE, PENNSYLVANIA 17103
AND AT 930 WALNUT BO'ITOM ROAD
CARLISLE, PA 17103
Defendants.
....ORDER
AND NOW, this
day of
I,f..,n
'.' ! j 1905.)"...
.
.
COURT OF COMMON PLEAS
CUMBERLAND COUNTY
.
.
.
.
.
.
.
.
.
.
.
.
.
.
~~tv f!...:r~ r.......
.'ACTIONNO. 'i$'- 1.).11 ..,.,
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
, 1995, upon consideration of
Plaintiffs' Civil Action Complaint and the Petition for Preliminary and Pennanent Injunction
med by plaintiff Dunkin' Donuts Incorporated, and after notice hearing, it is hereby
ORDERED that defendants are preliminarily enjoined from:
OUNKIN\CMESTNUT\CMESTNUT.INJ 800'02684
.
(a) Using trade secrets, confidentialinfonnation, signs, symbols, slogans and
proprietary marks belonging to Dunkin' Donuts Incorporated; and
(b) Using Dunkin' Donuts Incorporated's methods of production,
merchandising and sale of donuts and other related products, through the
use of specially designed buildings, equipment, accessories, identification
schemes, products, management programs, standards, specifications and
proprietary marks, all known as "The Dunkin' Donuts System"; and
(c) Occupying or using the premises of their former Dunkin' Donuts Shops
located at 1186 Harrisburg Pike, Carlisle, Pennsylvania and at 930 Walnut
Bottom Road, Carlisle, Pennsylvania in the operation of donut businesses.
BY THE COURT:
1.
'.
OUNKIN\CHESTNUT\CHESTNUT.INJ 800.02684 -2-
-
-
.-
ABllAHAM PRESSMAN" BAUER P.C.
BY: Arthur L l\ IIl1n, Esquire
Con911nt1qe T. FouraarIs, Esquire
IdentlDcaUon NOI. 10124163902
1818 Market Street, 35th Floor
PhIladelphia, PA 19101
(115) 569-9990
Attorneys for PlaintUT
DUNKIN' DONUTS INCORPORATED .
.
P.O. BOX 317 .
.
RANDOLPH, MA 01368 .
.
.
.
Plaintiff, .
.
vs. .
.
.
.
CHESTNUT ENTERPRISFS, INC. .
.
W. JOHN CHESTNUT, .
.
SHIRLEY M. CHESTNUT AND .
.
JOHN DOUGLAS CHESTNUT .
.
ALL PURPOR.TING TO . .
.
T/A DUNKIN' DONUTS AT .
.
1186 HARRISBURG PIKE, .
.
CARLISLE, PENNSYLVANIA 17103 .
.
AND AT 930 WALNUT BOTIOM R.OAD .
.
CARLISLE, PA 17103 .
.
.
.
Defendants. .
.
_...oRDER.
AND NOW, this
day of
MAR I 3 1995~
COURT OF COMMON PLEAS
CUMBERLAND COUNTY
f" 1/"',''''''' P.. '-r
emil ACl'ION NO. 95- 1:J.:11 .,-'1
, 1995, upon consideration of
Plaintiffs' Civil Action Complaint and the Petition for Preliminary and Pennanent Injunction
filed by plaintiff Dunkin' Donuts Incorporated, and after notice hearing, it is hereby
ORDERED that defendants are preliminarily enjoined from:
DUNKIN\CHESTNUT\CHESTMUT.INJ 8oo.D2684
.
-
.
(a) Using trade secrets, confidential infonnation, signs, symbols, slogans and
proprietary marks belonging to Dunkin' Donuts Incorporated; and
(b) Using Dunkin' Donuts Incorporated's methods of production,
merchandising and sale of donuts and other related products, through the
use of specially designed buildings, equipment, accessories, identification
schemes, products, management programs, standards, specifications and
proprietary marks, all known as "The Dunkin' Donuts System"; and
(c) Occupying or using the premises of their former Dunkin' Donuts Shops
located at 1186 Harrisburg Pike, Carlisle, Pennsylvania and at 930 Walnut
Bottom Road, Carlisle, PeMsylvania in the operation of donut businesses.
BY THE COURT:
1.
--.....~
DUMKIN\CHESTNUT\CHESTNUT.INJ 800-02684 -2-
-
~MAR 13 1995c0-
ABRAHAM PRFSSMAN & BAUER P.C.
BY: Arthur L. Pressman, &quire
Constantine T. Fournam, &quire
Identification Nos. 10124/63902
1818 Market Street, 35th Floor
PhUadelphla, PA 19102
(215) 569-9990
Attorneys for Plaintiff
DUNKIN' DONUTS INCORPORATED .
.
P.O. BOX 317 .
.
RANDOLPH, MA 02368 .
.
.
.
Plaintiff, .
.
vs. .
.
.
.
CHESTNUT ENTERPRISES, INC. .
.
W. JOHN CHESTNUT, .
.
SHIRLEY M. CHESTNUT AND .
.
JOHN DOUGLAS CHESTNUT .
.
ALL PURPORTING TO .
.
T/A DUNKIN' DONUTS AT .
.
1186 HARRISBURG PIKE, .
.
CARLISLE, PENNSYLVANIA 17103 .
.
AND AT 930 WALNUT BOTI'OM ROAD
CARLISLE, PA 17103 .
.
.
.
Defendants. .
.
COURT OF COMMON PLEAS
CUMBERLAND COUNTY
f.~,:fi! ~
ACTlONNO. lfS-./.J<J..7 (ju I
-r;.........
ORDER
AND NOW, this
day of
, 1995, upon consideration of
Plaintiffs' Civil Action Complaint and the Petition for Preliminary and Permanent Injunction
filed by plaintiff Dunkin' Donuts Incorporated, and after notice hearing, it is hereby
ORDERED that defendants are preliminarily enjoined from:
OUNKIN\CKESTNUT\CKESTNUT.INJ 800-02684
(a) Using trade secrets, confidential information, signs, symbols, slogans and
proprietary marks belonging to Dunkin' Donuts Incorporated; and
(b) Using Dunkin' Donuts Incorporated's methods of production,
merchandising and sale of donuts and other related products, through the
use of specially designed buildings, equipment, accessories, identification
schemes, products, management programs, standards, specifications and
proprietary marks, all known as "The Dunkin' Donuts System"; and
(c) Occupying or using the premises of their former Dunkin' Donuts Shops
located at 1186 Harrisburg Pike, Carlisle, Pennsylvania and at 930 Walnut
Bottom Road, Carlisle, Pennsylvania in the operation of donut businesses.
BY THE COURT:
J.
OUNKIN\CHESTNUT\CHESTNUT.INJ 800-02684 -2-
ABRAHAM PRESSMAN " BAUER P.C.
BY: Arthur L. Pr-cmDn, Esquire
Coastantlne T. Foumaris, Esquire
Ident1l1catlon Nos. 10124/635102
1818 Market Street, 35th Floor
Philadelphia, PA 19102
(215) 569-9990
Attorneys ror PIalntllT
DUNKIN' DONUTS INCORPORATED .
.
P.O. BOX 317 .
.
RANDOLPH, MA 02368 .
.
.
.
PIalntlfT, .
.
vs. .
.
.
.
CHFSTNUT ENTERPRISES, INC. .
.
W. JOHN CHESTNUT, .
.
SHIRLEY M. CHESTNUT AND .
.
JOHN DOUGLAS CHFSTNUT .
.
ALL PURPORTING TO .
.
T/A DUNKIN' DONUTS AT .
.
1186 HARRISBURG PIKE, .
.
CARLISLE, PENNSYLVANIA 17103 .
.
ANDAT~OWMMITBOTIOMROID .
.
CARLISLE, PA 17103 .
.
.
.
Derendants.
ORDER
AND NOW, this
day of
MAR 13 1995J'I
COURT OF COMMON PLEAS
CUMBERLAND COUNTY
~1 p..", T~
ACTION NO. f} ,. Ij~ 1 ...,--,
, 1995, upon consideration of
Plaintiffs' Civil Action Complaint and the Petition for Preliminary and Permanent Injunction
filed by plaintiff Dunkin' Donuts Incorporated, and after notice hearing, it is hereby
ORDERED that defendants are preliminarily enjoined from:
OUNKIN\CHESTNUT\CHESTNUT.INJ 800-0Z684
(a) Using trade secrets, confidential information, signs, symbols, slogans and
proprietary marks belonging to Dunkin' Donuts Incorporated; and
(b) Using Dunkin' Donuts Incorporated's methods of production,
merchandising and sale of donuts and other related products, through the
use of specially designed buildings, equipment, accessories, identification
schemes, products, management programs, standards, specifications and
proprietary marks, all known as "The Dunkin' Donuts System"; and
(c) Occupying or using the premises of their former Dunkin' Donuts Shops
located at 1186 Harrisburg Pike, Carlisle, Pennsylvania and at 930 Walnut
Bottom Road, Carlisle, Pennsylvania in the operation of donut businesses.
BY THE COURT:
J.
OUNKIN\CNESTNUT\CNESTNUT.INJ 800-02684 -2-
ABRAHAM PRESSMAN & BAUml P.C.
BY: Arthur L. Pressmlln, Esquire
Constantine T. Fournarls, Esquire
Identmcatlon Nos. 10114/63902
1818 Market Stri!et, 35th Floor
Philadelphia, PA 19102
(215) 569-9990
Attorneys for PIalntlfl'
DUNKIN' DONUTS INCORPORATED
P.O. BOX 317
RANDOLPH, MA 02368
Plaintiff,
vs.
CHFSTNUT ENTERPRISFS, INC.
W. JOHN CHFSTNUT,
SHIRLEY M. CHFSTNUT AND
JOHN DOUGLAS CHFSTNUT
ALL PURPORTING TO
T/A DUNKIN' DONUTS AT
1186 HARRISBURG PIKE,
CARLISLE, PENNSYLVANIA 17103
AND AT 930 WALNUT BOTrOM ROAD
CARLISLE, PA 17103
Defendants.
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COURT OF COMMON PLEAS
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CUMBERLAND COUNTY
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CfVB, ACTION NO. qS- I ;l.;l'1 ~d-
TJ.11I>o-'
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. MEMORANDUM OF LAW IN SUPPORT OF
PETITION FOR PRELIMINARY AND PERMANENT INJUNCTION
OF PLAINTIFF DUNKIN' DONUTS INCORPORATED
Plaintiff Dunkin' Donuts Incorporated ("Dunkin'"), by its undersigned counsel,
submits this memorandum of law in support of its petition for preliminary and permanent
injunction.
DUNKIN\CHESTNUT\CHESTNUT.INJ 8oo.D2684 -1-
I. INTRODlTM'TON
Dunldn' requests an injunction to prevent defendants Chestnut Enterprises, Inc.,
W. John Chestnut, John Douglas Chestnut and Shirley M. Chestnut (collectively referred to as
"defendants") from using Dunkin's tradename and other proprietary marks as well as its
confidential materials. Dunkin' also requests an injunction to prevent defendants from operating
donut shops in violation of valid and enforceable covenants not to compete.
As set forth in plaintiffs' Complaint and in Dunkin's Petition, defendants are
former Dunkin' franchisees who owned and operated two Dunkin' Donuts Shops in Carlisle, PAt
On or about August 25, 1992 and April 16, 1993, defendants executed respective Dunkin'
Franchise Agreements for a Dunkin' Donuts Shop located at 1186 Harrisburg Pike, Carlisle,
Pennsylvania and a Dunkin' Donuts Shop located at 930 Walnut Bottom Road, Carlisle,
Pennsylvania (the Franchise Agreements are attached to the Complaint as Exhibit" A"). Under
the Franchise Agreements, defendants were obligated to pay continuing franchise and advertising
fees as well as submit weekly sales reports. Defendants thereafter became in arrears in their fee
payments and failed to submit multiple reports. Dunkin' gave defendants an opportunity to cure
their defaults} Since defendants failed to cure their defaults, Dunkin' terminated their
Franchise Agreements.2 Since termination, defendants have continued to operate donut shops
using the Dunkin' tradename at their former Dunkin' franchised location. Dunkin' now seeks
injunctive relief to prevent defendants from using Dunkin's tradename and other proprietary
Dunkin' sent Notices to Cure to the franchise locations. The Notice to Cure letters are
attached to the Complaint as Exhibit "C".
2 Dunkin' sent Notices of Termination to the franchise locations. The Notices of
Termination are attached to the Complaint as Exhibit "D".
OUNKIN\CHESTNUT\CHESTNUT .INJ 800-02684 -2-
marks in violation of the federal trademark laws, and further to prevent defendants from
operating donut stores at their former franchised locations in violation of the covenants in the
Franchise Agreements restricting post-term competition.
n. ARGUMENT
In PeMsylvania, a preliminary injunction must be granted if:
(1) there is a threat of immediate and irreparable harm that cannot be
remedied by damages;
(2) the injury that would result to the plaintiff if the injunction is denied is
greater than the injury that would result to the defendant if the injunction
is granted; and
(3) the granting of an injunction will properly restore the parties to the
situation as it existed prior to the alleged wrongful conduct.
Schaeffer v. Frey, 403 Pa. Super. 560, 589 A.2d 752,755 (1991).
Underlying these three requirements, a court, sitting in equity, will grant an
injunction if the conduct sought to be enjoined is actionable and an injunction can, in fact,
restrict the conduct. Ill. While it is often stated that a party seeking an injunction must establish
"a clear right to relief, " it is further observed that the plaintiff "need not prove the merits of the
underlying claim, but need only show that substantial legal questions must be resolved to
determine the rights of the respective parties." Chmura v. DeeL!an, 398 Pa. Super. 532, 581
A.2d 592, 593 (1990). Stated another way, the "clear right requirement is not intended to
mandate that one seeking a preliminary injunction establish his or her claims absolutely."
Fischer v. Department of Public Welfare, 497 Pa. 267, 439 A.2d 1172-1174 (1982) (citations
omitted).
OUNKIN\CHESTNU1\CHESTNUT .INJ 800-02684 -3-
associate poor quality with the Dunkin' name, to the detriment of other Dunkin' franchisees and
ultimately to Dunkin' itself.
4. Defendants Must Either Pay Royalties During The Pendency or The
L1tll!otlon Or Cease Use Of The Dunkin' Marks And Tradenames
Injunctive relief is also available pendente lim to insure that a franchisee will not
use the trademarks during a legal challenge to terminate the franchise without paying royalties
for the use of the trademarks during the litigation. ~,J:.1. Costandi v. AAMCO Automobile
Transmission. Inc., 456 F.2d 941, 943 (9th Cir. 1972), where the federal appellate court
affirmed a preliminary injunction during the pendency of the litigation and recognized the
inequity that would occur if a former franchisee were allowed to reap the benefits of doing
business under the franchise service mark without paying its proportionate share of the costs of
those benefits pending the final outcome of the case. ~ aWl Durst v. Jiffy Lube, 968 F.2d
371 (3d Cir. 1992).
In Arthur Treacher's Fish & ChiDS. Inc. v. A & B Manal!ement v. Mrs. Paul's
Kitchen. Inc.. 519 F.Supp. 739 (B.D. Pa. 1981), reversed on other I!rounds, 689 F.2d 1137 (3d
Cir. 1982), the federal district court enjoined the use of the Arthur Treacher's trademark by a
terminated franchisee during the legal challenge to the franchisee's termination unless the
franchisee paid current franchise royalties during the litigation. As stated by the court:
... it is inescapable that the parties entered into a
contractual relationship whereby defendant would be
authorized to use plaintifrs trademarks conditioned
on the payment of royalties. Regardless of the
OUNKIN\CHESTNUT\CHESTNUT .INJ 800'02684 -8-
validity of the tennination and the defendant's
allegations of breach of contract and antitrust
violations, the crucial part at this stage of the
proceeding Is that A & B continues to use the
Arthur Treacher's trademarks without payini for
them. It would be 2rossly InCQ.lJitable to allow this
situation to continue pendente lite.
Ill. at 748 (emphasis added). The court recognized that royalties are the "lifeblood" of the
franchise system and enjoined the use of the trademarks unless the franchisee paid for such use
during the litigation. Ill. Similarly, the federal court of appeals, while reversing that portion
of the lower court's order in Arthur Treacher's which preliminarily required the payment of
m royalty fees, forced the terminated franchisee to either pay continuin2 fees or remove all
of the franchisor's Identifying trademarks and signs. 689 F.2d at 1142.
No set of circumstances exists under which a franchisee can repudiate its
Franchise Agreement by non-performance, cease paying royalties to its franchisor, and still be
legally entitled to use the franchisor's trademarks. It is a fundamental premise of contract law
that one cannot repudiate a contract and at the same time retain the consideration or any part
thereof received under the contract. Keenheel v. Commonwealth of Pa.. et al., 134 Pa.Comwlth
494, 579 A.2d 1358 (pa. Commw. 1990); Durst v. Jiffy Lube, 968 F.2d. 371, 376 (3d Cir.
1992); 17 Am. Jur. 2d, Contracts ~512. It necessarily follows that courts recognize the inequity
which would result if a former franchisee were allowed to reap the benefits of doing business
under the franchise service mark without paying his proportionate share of the costs of those
benefits pending the final outcome of the case. ~,Costandi, 456 F.2d at 943; Arthur
Treacher's, 519 F.Supp. at 748; Best Resume Service, 602 F.Supp. at 656.
OUNKIN\CHESTNUT\CHESTNUT .INJ 800-02684 .9-
Defendants cannot have it both ways. They must either be enjoined from
unauthorized operations or ordered to pay royalties for the use of the Dunkin' trademark during
the pendency of the litigation. It would be "grossly inequitable" to permit defendants to use and
benefit from "The Dunkin' Donuts System" without paying royalties for such use. Defendants
have refused to pay fees and no likelihood exists that they will tender the fees due and owing
or pay further fees during this litigation without intervention of the Court.
B. Defendants Must Be EqJolned From VIolating The Post-Tenn
Covenant Not to Comoete
Defendants continue to unlawfully operate donut businesses after termination of
their Franchise Agreements, in violation of Section 8.A.3. of their Franchise Agreements, which
provide that defendants, for a period of two (2) years after termination, shall not:
Own, maintain, engage in, be employed by, or have
any interest in any other business which sells or
offers to sell any product of a type offered by a
Dunkin' Donuts Shop; provided that, during the two
(2) year period following expiration or termination
of this Agreement only, the provisions of this
subparagraph 3 shall not apply to another business
located more than five (5) miles from the Dunkin'
Donuts Shop or from any other Dunkin' Donuts
Shop.
Pennsylvania courts have repeatedly held that covenants not to compete "are prima
facia enforceable if they are reasonably limited as to duration of time and geographic extent ...
within such a territory and during such a time as may be reasonably necessary for the protection
of the employer". Jacobson & Co.. Inc. v. International Environmental CO\11., 427 Pa. 439,
452, 235 A.2d 612, 620 (1967). ~ i.\lm Sidco Paper Co. v. Aaron, 465 Pa. 568591, 351
OUNKIN\CHESTNUT\CHESTNUT.INJ 800-02684 -10-
A.2d 250, 252 (1976); Bettin~er v. Carl Berke Associates. Inc., 455 Pa. 100, 103, 314 A.2d
296, 298 (1974).
It is also well recognized in Pennsylvania that the enforcement of covenants not
to compete are necessary to protect confidential and proprietary information that covenantors,
such as defendants, have acquired and accumulated over the years of their association with the
protected party, such as Dunkin'. Air Products and Chemicals. Inc. v. Johnson, 296 Pa. Super.
405,415-16,442 A.2d 1114, 1119-20 (1982).
The Pennsylvania Supreme Court, in the seminal case of Pierdn~ Pal!oda. Inc.
v. Hoffner, 465 Pa. 500, 351 A.2d 207 (1975), recognized the availability of injunctive relief
to prevent the breach of post-termination covenants in franchise agreements. The court in
Pierdnl! Pal!oda set forth a three-prong test for the enforceability of restrictive covenants:
1. The covenant must relate to either a contract for the sale of goodwill or
other subject property or to a contract for employment;
2. The covenant must be supported by adequate consideration; and
3. The application of the covenant must be reasonably limited in both time
and terri tory .
1l1. at 210. The court held that a franchise agreement falls under the first requirement of the test
and that the franchisor's interest is protectable by a covenant not to compete. 1l1. at 210-211.
~ iW2 Robert Clifton Associates. Inc, v. O'Connor, 338 Pa. Super. 246, 487 A.2d 947
(1985); Sparks Tune-Uo Centers. Inc. v. Gary White, CCH Business Franchise Guide, '9410
at page 20,161 (B.D.Pa. 1989) (non-competition covenants are prima facie enforceable in
equity" because violation of a covenant not to compete results in interference with customer
OUNKIN\CHESTNUT\CHESTNUT .INJ 800.02684 -11-
relationships causing non-quantifiabledamages) (copy attached to memorandum oflaw as Exhibit
"2"). The covenants arc also supported by adequate consideration.
1. The Covenants Are Reasonable In Scone
Since Piercin~ Pal1oda, the analysis typically centers around whether the
restriction is reasonable in both duration and geographic scope. The Court in Piercinl! Pal10da
upheld as reasonable a covenant restricting the fonner franchisee from operating any ear piercing
business for one (1) year within thirty (30) miles of the franchisee's fonner location and for
three (3) years within thirty (30) miles of any other Piercing Pagoda location. The Piercinl1
Pal!oda decision is consistent with the multitude of cases interpreting non-competition covenants
in the employment context. ~. ~ Worldwide Auditinl! Services. Inc. v. Richter, 402 Pa.
Super. 584, 587 A.2d 772 (1991) (restriction on competing within most of the state held
reasonable); American Mutual Liability Insurance Co. v. Kosan, 582 F.Supp. 269 (W.O. Pa.
1984) affinned without op. 816 F.2d 751 (3d Cir. 1987) (post-tennination restriction upon
insurance salesman for 18 months within 50 miles held reasonable).
In light of the Pierdnl! Pal!oda decision where the court upheld a restriction with
a geographic scope of thirty (30) miles and a duration of between one (1) and three (3) years,
the five (5) mile and two (2) year restriction imposed on defendants is reasonable and vital to
the protection of Dunkin's interest in the protection of its goodwill and the integrity of the
franchise system.
DUNKIN\CHESTNUT\CHESTNUT .INJ 800-02684 -12-
2. immediate And Irreparable ~ury To Dunkln'ls A Certainty In The
Absence or The Reauested Reller
Defendants' continued operation of their donut stores after termination of their
Franchise Agreements threatens Dunkin's legally protectable interests and is causing irreparable
harm to Dunkin'. Beyond the actual harm being caused by defendants' continued operations,
the Pennsylvania Supreme coun has even acknowledged that irreparable harm may be presumed
when a covenant is violated and the plaintiff need not make an independent showing of
irreparable injury. Beuineer v. Carl Bark Associates. Inc., 455 Pa. 100, 103, 314, A.2d
296,298 (1974).
a. Dunkin's Goodwill Is Beln~ Hanned
Defendants' continued operations are causing Dunkin' to suffer erosion of the
goodwill developed through the operation and development of the Dunkin' Donuts System.
Dunkin' provided defendants with business expertise, business training, and advertising
assistance. These are interests which courts hold deserving of protection. ~,Sparks Tune U,p,
~.; Economou. et al. v. Physicians Wei&ht Loss Centers of America, CCH Business
Franchise Guide '9771 at page 21,996 (D. Ohio 1991) (post-termination covenant upheld
because of potential harm to the franchisor's goodwill and customer confusion, as well as
survival of the franchise system itself) (copy attached to memorandum of law as Exhibit "3").
~ lIlm S.I. Handline Systems. Inc. v. Heisley, 753 F.2d 1244 (3d Cir. 1985); Piercine Pal!Oda
v. Hoffner, 465 Pa. 500, 351 A.2d 207 (1978). As stated in Economou, a franchisee's
operation of a competing business poses a danger to a franchisor's prospective business:
This danger is a potential harm to the [franchisor's] goodwill. In
such a situation, the franchisee has gained knowledge and
OUllKIN\CHESTNUT\CHESTNIIT .INJ 800-02684 -13-
be enjoined from continuing their service of former or potential customers of the Dunkin'
franchise system because they are still availing themselves of the benefits of that system.
b, The Intel!r1tv or The Dunkin' Donuts System Is Threatened
The law is equally clear that the integrity of a franchisor's system is a protectable
interest. The Supreme Court of Pennsylvania in Piercine Pal!oda, 465 Pa. 500, 341 A.2d at
211-212, held that a franchisor has a legitimate interest in both its existing and prospective
franchises as well as its investment and development of a specialized franchise system. It is
these legitimate business interests that Dunkin' seeks to protect by enforcement of the Franchise
Agreements' post-termination covenants not to compete. Defendants' continued refusal to
comply with the Franchise Agreements' post-termination covenants is causing immediate and
irreparable injury to the integrity of the Dunkin' franchise system.
If defendants are allowed to continue to operate businesses similar to a Dunkin'
Shop at the very same locations as their former Dunkin' franchises, Dunkin' will suffer an
incalculable loss of goodwill and confidence with its existing franchisees, a loss of goodwill with
the general public, and a loss of control over its business system and trade secrets. Dunkin' will
also be impeded in its attempts to re-franchise defendants' trading areas and prevent an exodus
from the system by existing franchisees.
In fact, one of the primary purposes for the enforcement of covenants not to
compete is to protect a franchisor's ability to re-franchise the former franchisee's area and retain
existing franchisees in the system. Without the ability to enforce its covenant not to compete,
it would be extremely difficult for Dunkin' to sell other franchises in defendants' area because
,
~...
DUNKIN\CNESTNUT\CNESTNUT.INJ 8DD'D2684 -1~
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nobody would purchase and operate a donut shop so close to defendants' stores. As stated in
Piercin2 Pal!Od~, JIUml, "the non-competition covenant faces the economic reality that continued
operation of the former franchisee's store subsequent to the termination of the agreement would
adversely affect the ability of the franchisor to secure another franchisee in the same territory."
Ill. at 212.
Moreover, enforcement of the covenants is necessary to prevent an exodus of
franchisees from the system. Defendants' continued operation of donut shops immeasurably and
significantly inhibits Dunkin's ability to prevent franchisees from abandoning the system because
franchisees instead will conclude that they can stop paying fees, de-identify their shops, and
continue to operate independent donut stores saving thousands of dollars in fees, all without
repercussion.
As made clear by the federal district court in Economou, the viability of the
franchise business system itself is at stake. Ill. at page 21,996. In reaching its decision, the
Economou court relied on the testimony of the principal of the franchise company, who stated
as follows:
The system drives the franchisor, and the only
protection you have in franchising, the only
governing clause if you will, and in the franchise
agreement, is the non-compete. If we don't get a
non-compete that we can enforce, we don't have a
system.
Ill. at page 21,997. The Economou court found this to be a legitimate business interest
deserving of protection. .Ill.
OUNKIN\CHESTNUT\CHESTNUT.INJ 800.02684 .1~
Additionally, defendants' continued operations harm the Dunkin' franchise system
because defendants are unfairly competing with Dunkin' by diverting business away from other
nearby Dunkin' franchise locations. The Pennsylvania courts have recognized that harm to a
business enterprise, such as injury to the ability of a business to compete or interference with
a business' customer relationships, satisfies the requirement of irreparable harm under the
preliminary injunction analysis. In John G. BIJant Co. v. Slinll Testinl!: and Re1)air. Inc., 471
Pa. 1,369 A.2d 1164, 1167 (1977), the Supreme Court, in reviewing a preliminary injunction
regarding a covenant not to compete, held that "the possible consequences of ... interference
with customer relationships... is unascertainable and not capable of being fully compensated by
money damages. "
3. Any Harm Defendants Might Suffer If The Requested Relief Is
Granted Is Outweighed By The Hardship To Dunkin' If The
Reouested Relle! Is Denied
Dunkin' has a protectable interest in re-franchising defendants' areas or otherwise
preventing a mass exodus from the system, and the terms of the Franchise Agreements therefore
should be enforced. Granting Dunkin' the injunctive relief it requests will not result in even
greater harm to defendants because Dunkin' is merely attempting to enforce the benefit of its
bargain with defendants as contained in the terms of their Franchise Agreements. Defendants
signed their Franchise Agreements with clearly worded covenants not to compete. Any burden
on defendants in complying with the covenants is not "undue" because it is self-imposed;
defendants brought any such burden upon themselves through their own willful breach of the
Franchise Agreements. The federal courts have held that where the harm imposed on a party
DUNKIN\CHESTNUT\CHESTNUT.INJ 8DO-02684 -17-
respond to the Notice to Cure letter. Defendants also gambled when they continued to operate
the premises as donut shops using the Dunkin' tradename after their Franchise Agreements were
terminated. The issuance an injunction is the only method by which defendants will cease their
unlawful usurpation of Dunkin's trademarks and their unlawful operations in violation of the
post-term covenants.
Accordingly, plaintiff Dunkin' Donuts Incorporated respectfully requests that
defendants be enjoined from using "The Dunkin' Donuts System" without paying royalties for
such use; and that they be enjoined from violating the post-termination non-competition covenant
,
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j<
contained in the Franchise Agreement.
I
I'
I
I
i,
Respectfully submitted,
~1'~
Arthur L. Pressman
Constantine T. Fournaris
Identification Nos. 10124/63902
ABRAHAM PRESSMAN & BAUER P.C.
1818 Market Street, 35th Floor
Philadelphia, Pennsylvania 19103
(215) 569-9990
Attorneys for Plaintiff
Dated: March 6, 1995
OUNKIN\CHESTNUT\CHESTNUT.INJ 800.02684 -19-
ABRAHAM PRESSMAN & BAUER P.C.
BY: Arthur L. Pressman, Esquire
Constantine T. Fournarls, Esquire
Identification No.: 10124/63902
1818 Market Street, 35th Floor
Philadelphia, PA 19103
(215) 569-9798
Attorneys for Plaintiff
DUNKIN' DONUTS INCORPORATED
P.O. Box 317
RANDoLPH, MA 02368
VS.
CHESTNUI' ENTERPRISES, INc.,
W. JOHN CHESTNUI',
SHIRLEY M. CUESTNUI' AND
JOHN DOUGLAS CHESTNUf,
ALL PuRPoRTING To
T/A DUNKIN' DONUTS AT
1186 HARRISBURG PIKE,
CARLISLE, PENNSYLVANIA 17103
AND AT 930 WALNUT BOTIOM ROAD
CARLISLE, PA 17103
COURT OF COMMON PLEAS
CUMBERLAND COUNTY
CIVIL ACTION NO.:
COMPLAINT IN EOUITY
NC71'ICB
d You have Peen sued in 1'OUtt. If J'O!1 wish to
efend~aUlSt the cla:uns set forth ill the
follow' pal glls, i"'I.\ must take acti~ W1thin
twenty 01 days. aft;er this catpla111t and
notice are se~, IJy entering a written
~ce pe/=Sonallv or bv al:tomey ana
1.11 writmg witlf the c:oui:t defenses
or actions to- thec;laims set ~ a~inst
Myou are warned tlIat if.you fail ::0 so
case may' proceed witllcut you a
t lMY be entered against you by the
l;llCU . further notice or any i
c a 111 ltt-f laint or lor a.w 0 ~
c a 0 re tt::i r ted the lllin!; .
~ may 10se ~~rope~ or o~r r1g ts
rtlmt to you.
'itX1 SHOUID T1II<E nns PAPER ro YWR LAWYER AT
eta. IF 'itX1 DO lCl' IIAVE A LAWYER OR CANICl'
AFFORD ~ GO ro OR 'l'ELEPIlalE 'llIE OFFICE SF::
FOR'lH ro FDlD our WHERE 'itX1 CAN GE:l'
LmAL HELP.
CtJoIBERLANI) COllm'Y BAR ASSOCIATION
LAWYER REFERRl\Lft>~INFORMATION SERVICE
2 L~u AVENUE
CARLISLE, PA 17013
~: (717) 249-3166
OUNKIN\CHESTNUT\PLEAOING\COHPLAINT
800'2684, 3695
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2 LIBEInY AVENUE
CARLISLE. PA 17013
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)i
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ABRAHAM PRESSMAN & BAUER P.C.
BY: Arthur L. Pressman, Esquire
Constantine T. Fournarls, Esquire
Identification No.: 10124/63902
1818 Market Street, 35th Floor
Philadelphia, PA 19103
(215) 569-9798
Attorneys Cor PlalntlCC
DUNKIN' DONUTS INCORPORATED
P.O. Box 317
RANDoLPH, MA 02368
COURT OF COMMON PLEAS
CUMBERLAND COUNTY
VS.
CIIESTNUT ENTERPRISES, INc.,
W. JOliN CHESTNUT,
SHIRLEY M. CHESTNUT AND
JOHN DOUGLAS CHESTNUI'
ALL PuRPoRTING To
T/A DUNKIN' DONUTS AT
1186 HARRISBURG PIKE,
CARLISLE, PENNSYLVANIA 17103
AND AT 930 WALNUI' BOTTOM ROAD
CARLISLE, PA 17103
CIVIL ACTION NO.:
COMPLAINT IN EOUITY
THE PARTIES
1. Plaintiff Dunkin' Donuts Incorporated (reCerred to hereinafter as
"Dunkin''') is a corporation organized and existing under the laws of the State of DelawllIC
having its principal place of business at P.O. Box 317, Randolph, Massachusetts and is
authorized to do business in the Commonwealth oC Pennsylvania.
OUNKIN\CHESTNUT\PLEADING\COMPLAINT
800,2684, 3695
2. Defendant. Chestnut Enterprises, Inc. is a Pennsylvania corporation with
places of business as above set forth. The individual defendants W. 10hn Chestnut, 10hn
Douglas Chestnut and Shirley M. Chestnut are adult individuals maintaining places of business
as above. All defendants are sometimes referred to hereinafter collectively as "Franchisee" or
I'
"Franchisees. "
3.
Dunkin' is engaged in the business of, and has acquired valuable
experience and skill in, developing and operating national franchises involving the production,
merchandising and sale of doughnuts and other related products through the use of specia11y
designed buildings, equipment, accessories, identification schemes, products, management
programs, standards, specifications and proprietary marks, all known as "The Dunkin' Donuts
System. "
4. Dunkin' owns the mark and related logo "Dunkin' Donuts", which is
registered with the United States Patent and Trademark Office. Dunkin' Donuts and its
franchisees have continuously used and advertised Dunkin' Donuts' trademarks throughout the
I
t
I'
I
I
I
,
,
I
,
I
i
,
,
i
United States. Dunkin' Donuts' trademarks distinguish its franchises from similar businesses
and are widely known and recognized by customers.
5. On or about August 25, 1992 and April 16, 1993, Dunkin' and
Defendants/Franchisees entered into two (2) Franchise Agreements, by the tenns of which
Franchisees were licensed to operate a Dunkin' Donuts Shop at each of the following locations:
1186 Harrisburg Pike, Carlisle, Pennsylvania 17103 and at 930 Walnut Bottom Road, Carlisle,
Pennsylvania 17103. A true and correct copy of said Franchise Agreements are attached hereto
V
I,
I
f:
and marked collectively as Exhibits "A." The dates and signatories of each of said Franchise
Agreements are as follows:
DUNKIN\CKESTNUT\PLEADING\COHPLAINT
800-2684, 3695
2
Locatl.llll IlaR
Harrisburg Pike August 25, 19!12
Franchisees
Chestnut Enterprises, Inc.,
W. John Chestnut, John Douglas
Chestnut and Shirley M. Chestnut
Walnut Bottom Road April 16, 1993
Chestnut Enterprises, Inc.,
W. John Chestnut and
Shirley M. Chestnut
6. Pursuant to Paragraph 4(E) of each Franchise Agreement, Franchisees
agreed to pay to Dunkin' a sum equal to 4.9% of gross sales at each Dunkin' Donuts Shop as
a license fee.
7. Pursuant to Paragraph 4(F) of each Franchise Agreement, Franchisees
agreed to pay to Dunkin' a sum equal to 5.0% of gross sales at each Dunkin' Donuts Shop as
a contribution to the Dunkin' Donuts Franchise Owners Advenising and Sales Promotion Fund
for the time period that the Franchise Agreement was in effect, plus such additional payments
as a majority of other Dunkin' Donuts Shops in Franchisees' local market support.
8. Pursuant to Paragraphs 5(H)(1) and 9(F)(l) of each Franchise Agreement,
Franchisees were to submit to Dunkin', on each Thursday, a statement of gross sales for the
preceding calendar week at the close of business on the last Saturday and to remit to Dunkin'
all monies due and owing to Dunkin' pursuant to Paragraphs 4(E) and 4(F) of the Franchise
Agreement.
9. Pursuant to Paragraph 9(C)(1) of each Franchise Agreement, Franchisees
agreed that if they failed to remit monies due Dunkin' pursuant to the aforesaid Paragraphs 4(E)
and 4(F) and, if Dunkin' thereafter placed the unpaid amounts in the hands of an attorney for
collection, then Franchisees would pay, in addition to all monies due Dunkin' pursuant to the
provisions of the aforesaid Paragraphs 4(E) and 4(F), all damages, costs and expenses, including
DUNKIN\CHESTNUT\PLEADINO\COMPLAINT
8DO-2684, 3695
3
collection costs, reasonable attorney's fees, and interest on the unpaid amounts at the 18% per
annum or highest pennissible rate, incurred by reason of Franchisees' default.
10. Each Franchise Agreement provides that Franchisees are in default when
the Franchisees:
(a) Fail, refuse or neglect to pay when due to Dunkin' any monies
owing to DUnkin' or to the Dunkin' Donuts Franchise Owners Advertising and Sales Promotion
Fund. Paragraph 9(A)(3); and/or
(b) Fail to comply with any of their obligations under the Franchise
Agreement, or fail to carry out in all respects their obligations under any lease for the Dunkin'
Donuts Shop or under any mortgage, equipment agreement, promissory note, conditional sales
contract materially affecting the Dunkin' Donuts Shop to which the Franchisees are a pany or
by which the Franchisees are bound whether or not DUnkin' is a pany thereto. Paragraph
9(A)(4).
11. Franchisees have sold products from their Dunkin' Donuts Shops but have
not paid to Dunkin' franchise and advertising fees based on gross sales for the weeks ending
from August 4, 1994 through and including February 25, 1995 as set forth on the Dunkin'
Donuts Accounts Receivable Status Reports compiled as of February 23, 1995, attached and
marked collectively as Exhibits "B".
12. Based upon Franchisees' actual reported sales and, to the extent
Franchisees have failed to report sales, based upon historical sales data, as of February 23,
1995, Franchisees owe the following sums for franchise fees pursuant to Paragraph 4(E) of each
Franchise Agreement and advertising fees pursuant to Paragraph 4 (F) of each Franchise
Agreement:
'..
DUNKIN\CHESTNUT\PLEADING\CCMPLAINT
800-2684, 3695
4
Franchise and Advenisin~ Fees
1186 Harrisburg Pike
930 Walnut Bottom Road
$17,468.07
$10,736.35
13. Pursuant to Paragraph 9(B) of each Franchise Agreement, Dunkin' has sent
written notices to Franchisees to cure their defaults under the Franchise Agreements as more
fully set fOM in Notices to Cure/Notices of Default, copies of which are attached and marked
collectively Exhibits "C".
14. Despite said Notices, Franchisees continue to be in breach of their
obligations owed to Dunkin', and as a result thereof, Dunkin' has notified Franchisees pursuant
to Paragraph 9(0) of the Franchise Agreement that their franchises have been tenninated.
Copies of Notices of Tennination are attached and marked collectively Exhibits "0".
15. Upon tennination of their Franchise Agreements, Franchisees are required
pursuant to Paragraph 9(F) of each Franchise Agreement to promptly pay to Dunkin' all sums
owed; to immediately cease to use, by advenising or in any other manner, any methods
associated with the name "Dunkin' Donuts", or any of the proprietary marks or other trade
secrets, confidential infonnation, operating manuals, slogans, signs, symbols or devices fonning
pan of the Dunkin' Donuts System and to immediately return to Dunkin' all operating manuals,
plans and specifications and other material prepared by Dunkin' and related to operation of a
Dunkin' Donuts Shop.
16. Upon tennination of their Franchise Agreements, Franchisees are
prohibited pursuant to Paragraph 8(A)(3) of each Franchise Agreement, from owning,
maintaining, engaging in, being employed by, or having any interest in any other business which
sells or offers to sell any product of a type offered by a Dunkin' Donuts Shop for two (2) years
DUNKIN\CNESTNUT\PLEADING\COMPLAINT
800-2684, 3695
5
21. Dunkin's immediate and irreparable hann will continue unless defendants
are enjoined from committing their wrongful acts.
COUNT I - DECLARATION OF RIGHTS AND INJUNCTIVE RELmF
Dunkin' ys. All Defendants
CHarrlsburl! Pike Dunkin' Donuts Shoo)
22. The allegations contained in the preceding paragraphs are incorporated
herein by reference as though set fonh fully herein.
WHEREFORE, Dunkin' Donuts Incorporated demands judgment against all defendants
declaring that the Franchise Agreement dated August 25, 1992 for the Dunkin' Donuts Shop at
1186 Harrisburg Pike, Carlisle, Pennsylvania 17013 is terminated as of the date of Franchisees'
receipt of Notice of Termination: a preliminary and permanent injunction pursuant to IS U.S.C.
~ 1116 prohibiting defendants' continuing wrongful use of the Dunkin' Donuts System, including
its trademarks and proprietary marks, and prohibiting defendants' violation of the post-
termination covenant against competition contained in their Franchise Agreement; treble damages
pursuant to IS U.S.C U1l7; attorneys' fees, costs of this action: and such funher relief as the
Coun shall order.
COUNT II - MONEY DUE
Dunkin' ys. All Defendants
(Harrlsburl! Pike Dunkin' Donuts Shon)
23. The allegations contained in the preceding paragraphs are incorporated
herein by reference as though set fonh fully herein.
WHEREFORE, Dunkin' Donuts Incorporated demands judgment against all defendants
for $17,468.07 for unpaid franchise and advenising fees, and $300.00 for collection fees billed
DUNKIN\CHESTNUT\PLEADING\COHPLAINT
800-2684, 3695
7
as of February 23, 1995, all due as of February 23, 1995, plus such additional amounts as may
be due under the Franchise Agreement dated August 25, 1992, including reasonable attorney's
fees, collection costs and Interest, and damages for wrongful use of the Dunkin' Donuts System,
including its trademarks and proprietary marks from tennination until de-identification of the
DUnkin' Donuts Shop at 1186 Harrisburg Pike, Carlisle, Pennsylvania, and until enforcement
of the post-tennination covenant against competition contained in the said Franchise Agreement.
COUNT III- DECLARATION OF RIGHTS
Dunkin' vs. W. John Chestnut and Shirley M. Chestnut
(Harrisburg Pike Dunkin' Donuts Shop)
24. The allegations contained in preceding paragraphs are incorporated herein
by reference as though set forth fully herein.
25. W. John Chestnut and Shirley M. Chestnut are the owners of the premises
located at 1186 Harrisburg Pike, Carlisle, Pennsylvania and continue in possession of said
premises.
26. As an essential condition of Dunkin' granting its approval of the
development of said premises as a Dunkin' Donuts Shop, defendants W. John Chestnut and
Shirley M. Chestnut and Dunkin' entered into a certain lease option .agreement on or about
August 25, 1992 (the "Lease Option Agreement") for the premises as above. A true and correct
copy of said Lease Option Agreement is attached hereto, made a part hereof and marked Exhibit
liE",
27. The Lease Option Agreement was given by defendants W. John Chestnut
and Shirley M. Chestnut to Dunkin' as collateral security for the perfonnance and payment of
OUNKIN\CHESTNUT\PLEADING\COHPLAINT
800.2684. 3695
8
all obligations set forth in the Lease and in the Franchise Agreement and any of aod
indebtedness of Franchisee to Dunkin'.
28. Pursuant to the terms of the Lease Option Agreement, defendants W. 10hn
Chestnut and Shirley M. Chestnut agreed that. if the Franchise Agreement was terminated for
any reason, then Dunkin' would have an option to elect to enter into a lease with defendants W.
John Chestnut and Shirley M. Chestnut for said premises in a form attached to the Lease Option
Agreement and within five days of written notice of Dunkin's election to enter into the lease,
defendants W. 10hn Chestnut and Shirley M. Chestnut agreed to execute, acknowledge and
deliver the lease to Dunkin' and. upon it acceptance by Dunkin'. deliver possession of the
premises to Dunkin'.
WHEREFORE, Dunkin' Donuts Incorporated demands judgment against all
defendants, declaring the Lease Option Agreement valid and enforceable, declaring that Dunkin'
Donuts Incorporated has the option to elect to enter into a lease with defendants W. 10hn
Chestnut and Shirley M. Chestnut for said premises in the form attached to the Lease Option
Agreement and directing defendants W. John Chestnut and Shirley M. Chestnut, within five days
of written notice of Dunkin's election to enter into the lease, to execute, acknowledge and
deliver the lease to Dunkin' and, upon it acceptance by Dunkin', deliver possession of the
premises to Dunkin' and granting Dunkin' damages for wrongful use of the premises after
Dunkin's election until defendants W. John Chestnut and Shirley M. Chestnut deliver the
premises.
COUNT IV. DECLARATION OF RIGHTS AND INJUNCTIVE RELIEF
Dunkin' vs, Defendants Chestnut Enterprises, Inc.,
W, John Chestnut and Shirley M. Chestnut
(Walnut Bottom Road Dunkin' Donuts ShOD)
OUNKIN\CHESTNUT\PLEADING\COHPLAINT
800-2684, 3695
9
29. The allega~ions contained in preceding paragraphs are incorporated herein
by reference as though set fonh fully herein.
WHEREFORE, Dunkin' Donuts Incorporated demands judgment against defendants
Chestnut Enterprises, Inc., W. John Chestnut and Shirley M. Chestnut declaring that the
Franchise Agreement dated April 16, 1993 for the Dunkin' Donuts Shop at 930 Walnut Bottom
Road, Carlisle, PelUlSylvania is tenninated as of the date of Franchisees' receipt of Notice of
Tennination; a preliminary and pennanent injunction pursuant to IS U.S.C. ~1l16 prohibiting
defendants' continuing wrongful use of the Dunkin' Donuts System, including its trademarks and
proprietary marks. and prohibiting defendants' violation of the post-tennination covenant against
competition contained in their Franchise Agreement: treble damages pursuant to 15 U.S.C
~1117: attorneys' fees, costs of this action; and such further relief as the Court shall order.
COUNT V . MONEY DUE
Dunkin' vs. Defendants Chestnut Enterprises, Inc.,
W. John Chestnut and Shirley M. Chestnut
(Walnut Bottom Road Dunkin' Donuts Shoo)
30. The allegations contained in preceding paragraphs are incorporated herein
WHEREFORE, Dunkin' Donuts Incorporated demands judgment against
by reference as though set forth fully herein.
defendants Chestnut Enterprises, Inc., W. John Chestnut and Shirley M. Chestnut for
$10,736.35 for unpaid franchise and advertising fees, and $300.00 for collection fees billed as
of February 23. 1995, all due as of February 23. 1995. plus such additional amounts as may be
due under the Franchise Agreement dated April 16, 1993, including reasonable attorney's fees,
collection costs and interest, and damages for wrongful use of the Dunkin' Donuts System,
DUNKIW\CHESTNUT\PLEADING\COMPLAINT
800,2684, 3695
10
including its trademarks and pro.prietary marks from tennination until de-identification of the
Dunkin' Donuts Shop at 930 Walnut Bottom Road, Carlisle, PelUlSylvania and enforcement of
the post-tennination covenant against competition contained in the said Franchise Agreement.
COUNT VI- DECLARATION OF RIGHTS
Dunkin' vs. Defendants Chestnut Enterprises, Inc.,
W. John Chestnut and Shirley M. Chestnut
(Walnut Bottom Road Dunkin' Donuts Shoo)
31. The allegations contained in preceding paragraphs are incorporated herein
by reference as though set forth fully herein.
32. Defendant Chestnut Enterprises, Inc. took possession of the premises at
33. As an inducement to and in consideration of Dunkin' granting a franchise
930 Walnut Bottom Road. Carlisle, PelUlSylvania under a lease dated May 11, 1993 (the
"Lease") with defendants W. John Chestnut and Shirley M. Chestnut and continues in possession
of said premises.
to defendants Chestnut Enterprises. Inc., W. John Chestnut and Shirley M. Chestnut for said
premises, the referenced defendants and Dunkin' entered into a certain lease option agreement
on or about May II, 1993, (the "Lease Option Agreement"), with defendants W. John Chestnut
and Shirley M. Chestnut as grantor and Dunkin' as grantee of an option to lease, for the
premises as above. A true and correct copy of said Lease Option Agreement and Lease arc
attached hereto, made a part hereof and marked Exhibit "F".
34. The Lease Option Agreement was given by Franchisee to Dunkin' as
collateral security for the perfonnance and payment of all obligations set forth in the Lease and
in the Franchise Agreement and any of and indebtedness of Franchisee to Dunkin'.
OUNKIN\CHESTNUT\PLEADING\COMPLAINT
800-2684, 3695
11
35. Pursuant to the tenns of the Lease Option Agreement, defendants W. 10hn
Chestnut and Shirley M. Chestnut agreed that, if the Franchise Agreement for the Dunkin'
Donuts Shop at the premises was tennlnated for any reason, then Dunkin' would have an option
to elect to enter Into a lease with defendants W. 10hn Chestnut and Shirley M. Chestnut for said
premises and after written notice of Dunkin's election to enter into the lease, defendants W.lohn
Chestnut and Shirley M.Chestnut agreed to execute, acknowledge and deliver the lease to
Dunkin' and, upon It acceptance by Dunkin', deliver possession of the premises to Dunkin'.
WHEREFORE, Dunkin' Donuts Incorporated demands judgment against all
defendants. declaring the Lease Option Agreement valid and enforceable, declaring that Dunkin'
Donuts Incorporated has the option to elect to enter into a lease with defendants W. 10hn
Chestnut and Shirley M. Chestnut for said premises and directing defendants W. 10hn Chestnut
and Shirley M. Chestnut, after written notice of Dunkin's election to enter into the lease, to
execute, acknowledge and deliver the lease to Dunkin' and, upon it acceptance by Dunkin',
deliver possession of the premises to Dunkin' and granting Dunkin' damages for wrongful use
of the premises after Dunkin's election until defendants W. 10hn Chestnut and Shirley M.
Chestnut deliver the premises.
\ f'~ \J.)~ r'r
Arthur L. Pressman
Constantine T. Foumaris
ABRAHAM PRESSMAN & BAUER P.C.
1818 Market Street, 35th Floor
Philadelphia, PA 19103
(215) 569-9798
Attorneys for Plaintiff
Dated:
March 3, 1995
OUNKIN\CHESTNUT\PLEADING\COMPLAINT
800.2684. 3695
12
~
g
>
UNITED STATES COURT OF APPEALS
- FOR THE THIRD CmCUlT ~I J I~ f~: _~ n .IV! J r.:)
NO.: .Q 5 '. ; f) 3 5 1 r: !';!
rEB 231S~ I'
-'
U.S.C.A. 3rd. CIR.
. -....~ ....
t z et al
v..
Rental l'lan~enent Inc.
0, .
D%SCLOSURE 07 CORPORATE ~%LXATXDNS
MID PXNlUfClU':: :mTERBST
Punuant to JrlS c1.r. LAR 26.1. Rental ~lanagement Inc.
following lSiacloaura. (Nama of Party)
1. Ia sailS party a subsilSiary or aftiliats of a publicly ownelS corporation?
maIce. th8
(Check One,
I Y..
('Xl No
If the anewer i. YES, li.t below the ilSentity of the parent corporation
or affiliate anlS the relation.hip between it anlS the namelS party.
2. I. there a publicly ownelS corporaeion. not a party to the appeal, that
ba. a financial intereat in the outcome?
(Check One)
) Ye.
[~ No
If the anawer i. YES, li.t below the identity of such corporation anlS
the naeure of the financtal intereae.
J. If thie ie a bankrupecy appeal. Jrd Cir. LAR. requirea that the fallowing
information muee alao be provilSelS.
If the debtor or the bankruptcy eatate i. a parey to the appeal. ccun.el
for the debtor or the tru.tee of the bankrupecy e.tate shall submit a
li.t provilSing the following informaeion.
a. The nUle of the debtor, U th18 info_aeion 18 not already prov1de4
in the caption.
b. The membere of the crelSitore' c~itteee or the tap 20 un.ecured
creditor..
c. Any entity not named in the caption which is an active participant
in the proceeding..
II' TIIB DEBTOR OR TRUSTEE or THE BAII1tRUPTCY ESTATE IS NOT A PARn, THE
APPELLANT S PROVIDE THE ABOVE INI'OIUlATION TO THE CLElUt.
Coun"l)
F..~"".v 1"'. 1995
(Date,
/.
" CJ
DUNKIN' DONUTS INCORPORATED
FRANCHISE AGREEMENT
Tl1Ia AllII...anL d111d J (/ ~6 , 19~ " rnl4a by and DIIW"n DUNKIN' DONUTS
INCORPORATED. I a.law.,. 'COf1)Orltton haYIng 111 ptlnClpal pl&Cl 01 butan.., In RandOlPh, Mauacnullftl
lheretnaft., "tiffed 10 II .OUNKlN' DONUTS"I. and tnl toliOwmO mdMduIlI Of entity lner.lnaft,r r.ftfrld 10
coIIectrvety II "FRANCHISEE"); CHESTNUT ENTEllt!(jSES I tHC. a Pennsvlvanta earoor.cion
and \I. JohnChestnut And ~hlrl..v 101 ('I............. hnf',", ....n'~d..... of PIIO"n.y'".n4.
co,_
DUNKIN' DONUTS. II tn. ,.aull of tnl Ixpendltur. at bInI. tflorl and rr'IOMY. hu acQUired IJDeftIfa end
IkMI An the Cll'YlkJpmlnl. OPlmng and operating 01 IhODI and dlltttbUtlOt1 ouu.tI InvoMnQ thl productIOn.
mlfChandlll"'Q end lilt 01 donuts and Dint' fllatld prOductS utlIwnO . IPIQ&IIy d.atgned bUIldIng Dt Idly WIth
IPtQaItycttvlk)pld lQulpm,nl. eqUipment 11'fOUlI.lnClOOf and ..,enor ac:cnlon...ldtntlfabOn ,cnemll, PfQductJ.
",.,._ _ami, a_., dllVll>ullon II1d d_ry rnotnorlI, _.a ancI propnowy ...... IIlCl
i1kInnDon. III at whICh art "t,nd to in this Agf.emtnl U U\a "DUNKIN' DONUTS SYSTEM..
DUNKIN' DONUTS has d~ and used and contInUII to UII and c:ontrDI the uugl of, In COIIIllIC.t~I'
with Ita bulmllI and th' bUll"'" of ftI DUNKIN' DONUTS trancruM'. CerIaIn propnltary tntltelll, UIOImIIkI,
HfYlCe "*"11nd trldl namel, Indud,"O -DUNKIN' DONUTS", whiCh II teglltered U I trldemanc on the PnncIpII
RtgtIllt at tnl Unltld 51a1l1 Plllnl OftlClltfll -PROPRIETARY MARKS-), 10 tdlntttv lot tnl pUblIC tnllOUfCe of gooc:Il
Ind 'IMeeI markllld tnlrlunder Ind to rlDflllnt to tnl pubItC hlOh and urwtorm IW'ldarul 01 QUIlIty, ctl"""'I,
1PPI1l1nC1 Ind IlMeI.
FRANCHISEE, being coonlzanl ollh' dISllMC\IVI Ind valuabllllgnlllcanclla Inl PUbliC 01 all 01 In. IoflQOlno,
dlllftl to ma.. UII oltne traaemlrk .OUNKlN' DONUTS-, and 10 enlOY the benellll at Inll mVk, tne DlMr
PROPRIETARY MARKS and In. DUNKIN' DONUTS SYSTEM,
FRANCHISEE una."lInda'h. m_' at DUNKIN' DONUTS' high and undonn allndUda aI quUly,
dunhnt.., IPDtsranc:, Ind IIMCe 10 tnl value at tne DUNKIN' DONlSTS SYSTEM and "" nKlllrty at 0PIM1Q and
llIlOfIIbng FRANCHISEE'. DUNKIN' DONUTS SHOP ,n c:antanMy """ tn. DUNKIN' DONUTS SYSTEM IIlCl on
lCOClnlanco """ DUNKIN' DONUTS' .lIndInla and a_bClnI,
In rec:ogtUIIOn 01 III I"e lbOve, tne parties lorn 'S tallows:
I, A. DUNKIN' DONUTS "erlby grants 10 FRANCHISEE dun"g tne linn nerlOt Ind FRANCHISEE KCIPU I
tranchllllo OPlrl11 I donut snop u111itlMO tfle DUNKIN' DONUTS SYSTEM in ICCOfdanee WIIn tnl tl""" covenants
and condltlonl ollhtl "O'IImenl, 11 ani IOCIbDn only, SltUlted II
930 Walnut Bottom Road Carlisle. PA 17013
,.. I.... Ic.w..'_ I'-I ten (10) IU~
lthe -CUNKlN' DONUTS SHOP- or lne -SHOP,. Th, term 01 this Agrttmenl Ihlll extend I... I, lilll yll,. Iromtne
dillin, SHOP aptns II 1~1 if .. ~ I .. 1, .._ 11110 IIrvl Ine QIn'ral PUb(IC...........
, . _ ...... . _.._. _ , ThiS IranChlIl Indud.. 1ne nont 10 UII, In connectIOn
tnertwttn and lithe lorlld IOCIllon, tnl ttld8mlfk -CUNKIN' DONUTS-,lIono WIth otnlf PROPRIETARY MARKS
ownld and ullkt.d by DUNKIN' DONUTS in COMlCtlan WIth OIner DUNKIN' DONUTS lhOPl, and Ih. noM to USI tnt
DUNKIN' DONUTS SYSTEM Inctudlng canltdlnllll Ind valuable jnlonnltlDn wftId1 now ,xlslI or may be ICQUnd
hereaft.r and III farth In DUNKIN' DONUTS' oPlrlllno manuall or otnetWllI dlldosld 10 DUNKIN' DONUTS
".ncrn.....
1. 8. For 1 new CUNKIN' DONUTS SHOP wnlr, Inl tocallon Ilia bl dIVIIODtd by FRANCHISEE, lh11 trancrue
II orantld to FRANCHISEE subllct 10 llnd lnan become eftectlVe oniy uoon camPhane. WIth) In, tlnns, CQYInants,
ana COndo,an. al .n. DUNKIN' DONUTS FRANCHISE OWNER DEVELOPMENT AGREEMENT ...CIJ\ad concunenlly
h_h by DUNKIN' DONUTS and FRANCHISEE,
,. C. Tn" AQrI.mtnl snail automlllCllly eXOIre ugon Ine .artler IXplrlbOn 01 any IIUI rllll:lng 10 tn.
FRANCHISEE'. oc<upancy 01 Ina DUNKIN' DONUTS SHOP,
t. D. FRANCHISEE anD III plnnl,. Ind shar,hoIoerl 01 FRANCHISEE rlprl"nl and warrant to DUNKIN'
DONUTS Ihll ,.en IndiVIDual IS I Unitt<' SlallS C1t1ltn or I lawful rllldlnt tIlen Ollhe Unlltcl SIaIIl, tna1 .een
corporltlon IS and Inall remain duty oroanllld and ,n QOOd standln9 dunn9 tnl Ilrm olllUS AQr.tmem. and that III
ltnanCIaI Ind other InfOrmation wnlcn FRANCHISEE has prO'ttd.d to DUNtoN' DONUTS in COMICttOn WIth
FRANCHISEE's IDpllcallon lor IhlS OUNtoN' DONUTS franchlllll UUI ana Iccurlll,
2, DUNKIN' DONUTS agroll'
r,uanlDI. ,ffonl (II to ltaU"1 contrDl olin, r'III1ta11 tor Inellnn or thlS Agrnment DUNKIN
DONUTS SHOP thereon 10 DI constructld. lubltc1 10 the tegutatloM lUU10ntJlI hI'MQ fl,JriIdldIon.
Ind to tn.reuoon 'IU. thl DUNKIN' DONUTS or tnrouon I lublldwy to FRANCHISEE. In th.
..... DUNKIN' DONUTS I, a UNKlN' DONUTS SHOP la FRANCHISEE. FRANCHISEE IhIIhIYt
tnl I rllml'" and oDtlln.. refund at lhelNmAL FRANCHISE FEE DAtd 10 DUNKIN' DONUTS
2. B. For 1 nlW DUNKIN' DONUTS SHOP wnl"lnl locallDn II to be dlVtlDlHd by FRANCHISEE. 10 IPPfOV'
Ih, tocaltOn It II mitts tn. 11Indlldl emDloytd by DUNKIN' DONUTS in IIledlnO otn... tocaboM It tne tmt: and 10
PfOVtd. FRANCHISEE WIth ant copy 01 tfl. ltandard pIInI and lpeahclbOnS lor I DUNKIN' DONUTS shop:
2. C. To melt. IvlillOle,n, IDeQfIcIbonl andIOf rIQUlrlfMnts tot tn. tQUlpmtnl to be Ulikztcl In thl DUNKIN
DONUTS SHOP;
2, 0, To _. _a.a FRANCHISEE and FRANCHISEE'a d'llgIIIIld 11IIII'_' pnallOtn. _ of
tn. DUNKIN' DONUTS SHOP, a bIlnlng p_ II tho DUNKIN' DONUTS UnMtIlIy Ca<parI1a T....ng C..." (DDUI
WIth rllDKI1D Iht OO.:rallon of tn. DUNKIN' DONUTS SYSTEM;
- -'
..-.......
ThllrcWL
_1'C'a
PROD, ..1Il11-
IAT,
EDA ~UO
lmilR -::.-
'IrUel
FORA
SATELLITE
IN AN EDA
.-
orant at thl
Franchi..
SEE AIlOmtn
1.A.
$i
InttIIl Slme..
F"""""Oy
DUNKIN'
DONUTS
f!
.'
:' 0
Z, E, T. ._1..._ OroclO.,.... ...... FRANCHISEE in _ - cua, DONUTS' ,-
"TlItnOClI 01 recora IIIID1nQ. COmtOIS. 1\11M9 ana \r8IRlnQ rtaUlremtml. and Droauc:IJon metnOdl. and In aevttQDmQ
IOoroveG ,ourc" O1IUDpty;
..
2. F. To matt. Ivllllbll to FRANCHISEE uIIIW'CI. QUia on tn, ..oenlnet and luagmtnt at DUNKIN'
DONUTS. In tn. gflQDenmQ. DD'nlnQ and ,Mill DD'fIUOR at m. DUNKIN' DONUTS SHOP and In contOrTnlng to U\I
flQUlftm.ml 01 tnl DUNKIN' DONUTS'SYSTEM: InCS
Z. G. To DlID.' and COOrdlnltl,nt Grand 00'"1"9 Promooonal Aavlrllllno pro;ram lor IUCI1 eM" lavtnalll\Q
ornQfOlll II DUNKIN' DONUTS may ,_Iyl I.r tnl mn," .1>I",nQ .t tnl DUNKIN' DONUTS SHOP,
3, DUNKIN' DONUTS 'Q'"':
3. A.. To mllnllln I continuing aOVlIOrv rlllDonlnlo Wllh FRANCHISEE. inducSlnQ conluttabOn In tn. II'IU 01
marklung. mtrcnana111nQ ana gln.rli DUlin". 00.,.110"':
3. 8. To QrO'l'OI DOtflllnG rnanulil to FRANCHISEE. whlcn contllf\ tn. ,tandWI. IOlClftcaUOnl. procedure.
and t'cn"'OU" 01 tne DUNKIN' DONUTS SYSTEM. and 10 rIYlII. from Ilml 10 tlm.. m. contlnt of tn. manualllO
\nc:orpGflll new oevelODm,nll ,.oara'"O I\&nOWI, Il)eCItlCAllOf\" prOClOurll and tlcnnlQUll, .
3, C, To canMuIllIlfloM la maantaln hlgn and uniform lW\dardl at Quality, dl."unl". apPlarancl and IIMCe
II III DUNKIN' DONUTS InOpI. tnUI gratlcung and InnancanQ 11'11 rlgu&auan at DUNKIN' DONUTS anCIII'11 demand
tOf 11'11 groclUCII at tnl DUNKIN' DONUTS SYSTEM ana, 10 tnat Ind: 10 makl rluonaDl' IttonI to dlllermnatl 1\1
IWKIWI and Ipecd1caIIOnlto potlnull IUpplllrs ot FRANCHISEE upon ml wntItn rRuIII at FRANCHISEE;
3, D, T. r_ t.r _ III 0""",110 _"lI ana 0_ m......' rtlllllnQ .. FRANCHISEE',
DUNKIN' DONUTS OPlmonl prlpar.d Dy FRANCHISEE lor UII In tocaI actvlfU1lnQ; and
3, E, To &aml",llIr Tnl DUNKIN' DONUTS Francrull QwnerI Advlrul&nQ and SllII promouon Fund IInl "Funcn
and 10 direct 11'11 dlYIIOgmlnl ot aU IdVlrullnQ and prOmobOnal !:Irograml. On.trrtn of FRANCHISEE'. 5%lCNIrullf1Q
__bUllOn ""'.t tnl GROSS SALES .llnl SHOPl ""'bl U1IIl1Id, 11",1 dlacr....n of DUNKIN' DONUTS." 0-1
tar 11'11 admlnlltrallV. I.O.nsll ot tnl Fund and tar prooraml dlllQnIG to InerlUI llill and InnancI and tunntr
dMlop tnl puellc rlgUlatlon _nCllml;' ot DUNKIN' DONUTS InCl 11'11 DUNKIN' DONUTS SySTEM. Tht OIlInCI,
InduCllno Iny IntlflSI .arnla by th. Funo. Will 01 ulld tar lovtmllng and rllllld l"Olnlll. ConmOutlOnllO tnl Fund
In l..call at 5% at GROSS SALES snail 01 Ulla In accoroancl wltn Inl PfDgrlmllO whiCh tnlV flllte. Tnl conllm
01 aU IOVlrtllln;. U WillIS tnl mlClllln wnlcn tnl IOVIRlllng litO DI !:Ilaced Ino ml levlRlllng 1,.1. InaII 01 II tnl
allCl'ttJon at DUNKIN' DONUTS. Ugon r'Qullt. DUNKIN' DONUTS Will p'OVIO. FRANCHISEE - SII"mlnt at ,ecllP1l
and dllourslm.nl' at "'I Fund, orloarlet by en InalDlnalm Clnmla PUbtlC IccounWlt. tD' eacn tlleal Ylar at tnl
Fund,
6. FRANCHISEE 10f..':
continuing
leMe.'
Furnll- .Y
DUNKIN'
DONUTS
PAYMENTS:
IntUal Frlnch!"
. .. . FH
,nIlIo'Y to DUNKIN' DONUTS DOli I m
""'llIn"nQ tnllNITIAL FRANCHISE FEE. o,yl"'l II I.UOWI: FovI Tn 5,000,001 uoon tnl"_ I
attnl, AQrllmtnl; Tin lnousanCl 00111111510. on 01 tnl LEASE OF DUNKIN' DONUTS SHOP ana
tnt rlmllnlng unplICS bllance CI DV FRANCHISEE or FRANCHISEE', olllgnlllCS reprlllmawl 11
lhI DUNKI . nlng caur.. 0' (nifty 1301 CIV' pnor 10 tn. IChldUlla zae ng ot tne DUNKIN' DONUTS
e or 111 r.xc lisive Devel.lIlI""t Agreement da.ted '" h(, 1".3 . ~
4 B. For I new DUNKIN' DONUTS SHOP wnert ,n,locallon IS olveloOtO bV N,Iflk~c.. FRANCHISee. snail
gIVloDUNKIN'CONUTS :1l'!ll!:"- ~-;.-:- COllaIstS 1" nnn nn 'fepra- I
nil"'" ~ rce. payaoll. ... i i - ;__... ~~~ ~ ii~ IIi' ~i1!,~~.! ,;.;..1 .:.:: ::8-:it'Btt~~
"._.. _' .B_rlm. B811~T861 BP,UI"tDUNKlN'DONUTSSHOPlSnotOoenlollNlmlgenefIiPUDIICWlIt\In ~
I1ftlln II 51 monlns tram In. 0111 at InlS Agreemlnt Ine INmAL FRANCHISE FeE snl1l bllncreutd to In, tn,n current NIT
INITIAL FRANCHISE FEE. wnlcn snlll 01 paYlctllO DUNKIN' DONUTS uoon Olmand. unltSl DUNKIN' DONUTS IlectI
to IInn_nalllnll Ao,,,men1.
01 UlIIAQ,..mlnt aecomes aUI. FRANCHISEE may. DV wnnln noUCI.II""!" Ivlnl. DUNtoN'
DONUTS will "turn In, Inl~a1lnS1aUmlnl 0810 reamlnt.lessl cna,..,' at Two ThouunD Oolllfl RefundS
152.000.00110 5 10' assistance 'InDIfIG tD FRANCHISEE to tne Oatl at ,,"",nauon.
4. D. FRANCHISEE snail gay 10 me Fund Tnr.e Thousand Dollars 153.000.001, which InaU be nonrlfundabll after
tnl DUNKIN' DONUTS SHOP commlnCII oal'IUOn. to' I Grand OOlmng Promouonal Advlrullng prooram lor lucn
otner .DVlnlSlnQ groQ,am as DUNKIN' DONUTS mlV sPledyl. Plvmenlsnlll 01 midi In tuu DnOf lD .nlnaance t1V
FRANCHISEe or FRANCHISEE's DII19nateD rearl"ma1JV1111h' DUNKIN' DONUTS trIInlnQ COUrsl orlfttny (30) c:IayI
PMO' 10 1ne Icnldulea 001"109 at the DUNKIN' DONUTS SHOP. wnlChevlr al11 IS elrtler.
4, E. FRANCHISEE Snlll alY 10 DUNKIN' DONUTS II Post Otbcl Bo. 294. Ranaolgn, MuaacnUllttl 02358 tor
suCh omlr 100111111 DUNKIN' DONUTS Ihllllrom Ilmltoum' QIVltO FRANCHISEE In wnMg), on or Detore ThufICSIY
at lien WHK.' lum laulll0 lour and nlnlllnthl Qlfclnl t4.9~) ot tnl GROSS SALES 01 lnl DUNKIN' DONUTS SHOP
lor 11'11 IlVln m Day alnoD InDlng It lnt ClOSt of DUllnesl on Inl PflceCi!nQ SIlUfGIV. Thlllnn "GROSS SALES-
In ttuI "O,..me"1 snalllnctudl 11111111 miDI by FRANCHISEE pursuant 10 ,"II AQrltmlm. out Inall not IndWI1I'l1
sll. at ogarlnll. IIIl1lUtl or SImilar WIS.
4. F, FRANCHISEE ShIll Dlylo 11'11 FunClat tn. samlllml, forlnl laml 'IYIn (7) dlY ptnod,ln thl urnl mannlr
u. ana In IcClmon la, ml Olymlnts orOVlolC tor unCler ParlQl'1Oh 4.E. 01 tN. AG,..mlnt. 5% of tn. GROSS SALES
at 11'10 DUNKIN' DONUTS SHOP (I..ouomg wnollllll 11I11 to IccounlllOorove<IIn wnung, In 1C2YII'CI, t1V DUNKIN'
OONUTS) . In IOd11l0n. FRANCHISEE snlll OlroClDltl In ana mPI ladltlonll Olymentl to tnl Fund WIth rnpec:t to
all aavlmSlnQ. maneltlng and otner DUNKIN' DONUTS orograrM WhICh tram "mila uml Itl luoponld by' mIfDI'IfV
Dt QfOCIUClnQ DUNKIN' DONUTS SHOPS in tnl mllklt In WhICn 1"1 DUNKIN' DONUTS SHOP Is located wrth relOlCl
to IOCIl orooratnl. ana In "'I COntlnlnlll Unrtld 511111. With 'IIQlCl.IO ncon&I O,OOf'ln\I. DUNKIN' DONUTS rlleMl
m. hQn1 to tiS lOll ana IDI00ull CIscrlUOn 10 0lltgOll1 0' cnangl tnl comOOlIUQn ollhOO1lf\dUd1d In me bill tor
ouroosllot Q"ltmln,"q I mllontV. FRANCHISEE snlll nlVl comDltllOl1cr111Oh II 10 m. onen nlcnarvn toraroauct
sata In Int DUNKIN' DONUTS SHOP. NotntnCJ nl,,,n Inlll bl canluuld to .IQUlII FRANCHISEE to ..1IbUIft once'
In eccaraancl W1tn !:IfOQraml luaoonlc by lnl mllOfltY of InoQI.
Grind UOInln\l
C.nUnulnQ
PgnchlH F...
Adwr\IOlnQ
SEE ADIlmDll1
4.F.
SEE ADIlDlDlJol
4.G.
'. _I
I,
I
..
.'.5. FRANCHISEe unCllf"lnal ancOnowtedOIl "'It 1'1'''' al\ld at In. DUNKIN' olTS SYSTEM II Imoo,wU
to DUNKIN' DONUTS. 10 FRANCHISEE and UJ om., DUNKIN' DONUTS franchlHn W1 or f 10 dewelOD ana rnatmaln
hlgt1 and urutonn .tanGara. 01 QUlllty. cl,.nilM". ."P.atanclt. I'NlCt. tacalm... proauctl ana IlCtWQuelto IftCt.UI
Int a.manes tor DUNKIN' DONUTS p,oaucta and '0 plattCl ana .nn~ me repu\llKJn ana QOOOWlll at DUNKIN'
DONUTS. AcconllnQ~. FRANC..,uSeE 10"" 10: a,V011 lullllmt. tntfQY.na ,non to tnl manlg.m.m Ind optrauon
at the DUNKIN' DONUTS SHOP' obtlln trom DUNKIN' CONUTS gnot WOne" IPprOVII of aU wnol'WI Iccauntl: us,
bOIl_to mllllmll' Ill" 01';'. DUNKIN' DONUTS SHOP: .nllllllCCUlIlIlI_of GROSS SAl.ES to DUNKIN'
DONUTS; and m'lDlltn,nt all proctdU,1I recommtndld by DUNKIN' DONUTS to lnlrunul '"lp1OyH theft.
FRANCHISEE lunner 10'"' tnlllmC)loy..tntft Inall not r,h,.,. FRANCHISEe 01 tn. obhgabOn 10 make all paymtntI
10 DUNKIN' DONUTS baea an GROSS SALES PU'luanllD Paraorapn.. ot thiS AGre,ment and tnal accuratl r.ooruno
at GROSS SALES inCIuClII nnOlno aU &aI.1 In tn, casn "Ollt" It tn, 11m, Inl product II ClltN,rld to tnl putChUlr
InClucMg W\lnoI.llllm"atlon retlll, wnOlIlIlI, Dulk Cllscount lalll lna lalll tor WhICh paymlnl mlY b' Clell"ld.
FRANCHISEE Ilia 10,HI:
5. A. To USl III mlllnall, InO"Cllenls, IUppll", paD.r OOOClS, unllonnl, flx1urll, lurnllh'"OI, IIOnl, IQUlpm.nt,
mttnOClI 01 'II' nor anCllnterlor CllIlQn anCl conSlructlOn anCl memoClI at product pr'PllatlOn Ind dellV'ry pr'lCrlbtcl
by or wnlCh conlonn WlI" DUNKIN' DONUTS' IlanCllrClI anCllgecdlCAbonl anClto canv oul thl busanl" coy.red by
tnll Agr..ment In accorClanc. wltn Inl oPlrlllOnalltanClards ana IDlcmcabon. IIlIblllh.d by DUNKIN' DONUTS and
,,,forth In DUNKIN' DONUTS' oo.rlUnQ manuall and otn.r oocum.nts u tMy p,,"nuy llUll or InaU 'JUlt In tn. Murl
or u may D. otnefWIlI Cllldoltd to DUNKIN' DONUTS' franChII"1 from um. to tunl,
5, B, To "lrlln tram ullno or ..111RQ any pfOCluClS, ml1enall, ingredllntl, IUppllll, paper gOOdl, unIformS.
fixturtl, tumln'"OI, I10nl. eQUloment anCl mllnOClI at pf'OCIua ptlparatlon. mlrcnandll&ng. and dlllvery WhICh da not
m_ DUNKIN' DONUTS' ltanallClI ana IPecrhcluonl,
" C. To oftlt for sall only IUCh producnu lnau bl .IPflllty apptO'lld tor Ill. at thl DUNKIN DONUTS SHOP
In wnIIng In adYanCI by DUNKIN' DONUTS and to oftlt tor lall 111 prodUCII Nt have been d"iOnlltcl u appJOYed
by DUNKIN' DONUTS,
5. D. To malnllln It all tlmll a luftidenllupply at IDproved ProCluCIS,
5. E. To purena..111 tooa proaucll, SUPOIlII, IQulomenl ana mltenall rlQulrecllor tn. oCMIrabDn at the DUNKIN'
DONUTS SHOP from luppllers wno Clemonltrall, 10 Inl reuonlbl' Ullllactlon 01 DUNKIN' DONUTS. Inl atIIhty to
me" all at DUNKIN' DONUTS' slanolras anClsOIClflC&lIonl lor IUCh n.ml; wno poll..I aaequall caolCltY Ina
laclllllellO IUgglV FRANCHISEE'S neeasln IMI auanlltlll, al 'hi tlm.. ana wltn the relllblllty rlQUlslllto an .fflcilnl
ap"atlon Ina wno navI beln apcnoVla, In wfltmg, Dy DUNKIN' DONUTS. Pflor 10 purcnallng any Ileml trom any
sUPplier not prlYloully approvea Dy DUNKIN' DONUTS, FRANCHISEE snallluDmt 10 DUNKIN' DONUTS I wnnen
reaUII' tor aoproval of tnllugplllt. DUNKIN' DONUTS may reQUlfe Nt samo!" tram tn. luopber bl Clllrvered 10
DUNKIN' DONUTS or to I Cleslonated InCleolnaentlllt1ng laboratory tor tllllnQ pnor to approvat and lolli, A Chargl
n01IO IIC.ed tne IctulI cost oltn.tel1lna1l bl mlClI by DUNKIN' DONUTS and IhaU bl pala by FRANCHISEE:
gtOVlCled. now.ver. tnl colt 01 tnl flrsttesl reQUlltla by FRANCHISEE in any caI.ndarYlar Ihlll be bom_ by DUNKIN'
DONUTS.
5, F. To mllntlln, at FRANCHISEE's Iloense, I' IIlllmll,lhelnllnOf and ex1lnorotthe DUNKIN' DONUTS SHOP
ana all flllures. lurnlshlngs, Ilgns anCl eQuIpment In tn. nlOnllt aeo,ee of elelnlln..., oralnlnl",lanltlllOn ana rePlJr.
al ....onIDly "Quned by DUNKIN' DONUTS, ana 10 makl no matinal anera'lon, aCldltlon. "placlm,nt or
lmprovemenlln. or to, Ihe ,"Ierlor or IIlIrlor hncluCllng the Pllklno lot and lanClsclped areul at tnl DUNKIN' DONUTS
SHOP Wllnout tne Oflor Wflnen consenl 01 DUNKIN' DONUTS.
5. G. To manaoe Ine DUNKIN' DONUTS SHOP at all tImes With at least twO (2) IndlVlauals, one at wnom mUll
tlllnl FRANCHISEE or panner or InarenolClef of FRANCHISEE. Boln inDIVIdualS musl nave suceesslully COmPl.lld
Inl DUNKIN' DONUTS Irallung program al DDU. Botn InCllvlClullS mull navIllllracy anCl nueney 10 In. En911sh langulOe
suftlQent.ln tn. OooalallM OOlnlon of DUNKIN' DONUTS, to sallltlctonlY comptell trlln,"o at DDU anClto commumcall
Wltn .mployeel. customers, anCl supphetl 01 DUNKIN' DONUTS. In lne event FRANCHISEE applIes tor InCI rlCelVel
aDorovallo CllvelOO or ourcna"an aCldlllonal DUNKIN' DONUTS snoo, DUNKIN' DONUTS reQulrlltnatlne addrtlonal
snOD bl manageD Dy at III" ani DDU trllned lnaMClual _aprovea by DUNKIN' DONUTS.
5. G.'. To Insure Inat all emoloyeeS arl trameCl In accoraance wlln DUNKIN' DONUTS tn-lnOD Italnlno
Droclau'... AlSO. FRANCHISEE shall Insure tnattn, manager anCl all emoloyelS whOSI ClUIlII mduCle customer
$IMCel'lave surtlCllnt lIueney In IMI Engllln languaoe to ICleQuallty meet tnl auDIIC In tne DUNKIN' CONUTS SHOP,
5. G.2, To aRenD and to reoulrt Inost Imoloyea In Inl DUNKIN' CONUTS SHOP to anena IUCh !unner Ualf\lng
as DUNKIN' DONUTS shall from lime to tlml reasonaDly reoUlle.
5. G,3. To Day tne call at Ullnlno matenalS, salin", accammodatlonl Ind travII elOlnSll, it any. of FRAN.
CHISEE or any other IndlVldualemployla In tnl DUNKIN' DONUTS SHOP, FRANCHISEE Will also Deailnl COlt at m.
snoo Itllnlno pr09rlmS. The cost of prellnllno tne DOU Itllnmo program will be bOrnl by DUNKIN' DONUTS,
,. H. To keep lull. comotell anCl accuratl books anCl aceoun1SI" accofClanct With g.nerally aceeDlId accounbng
;lnnool" 11'10 In tne torm anCl manner DflScflDed Delow or as may Dt funner Pltscnbea by DUNKIN' DONUTS lrom
tlm. to lime.
5. H, t. To subtntt 10 DUNKIN' DONUTS, on or Dllore Thursaay 01 ,acn wllk, on an IOProvtCl form, IIIOntc:l
stltlment at GROSS SALES lor In, Slv.n m Clay Olnod enCllng allne ClOII 01 bUSln... on tne prlCedlng Saturday
Ilong Wltn IU monltl reQUIt.a to De paId unaer Paraoragns c,E. and ".F. of UUI AOreemlnt.
5. H.2. To lUOfM to DUNKIN' DONUTS, on or beforl tnl twentieth 12Oth) dlY 01 lach montn. on an Ipprovtd
lorm. I profit anCl Ion Itatement at thl DUNKIN' DONUTS SHOP lor tne prec.dlng CIl,nall 0' hlCll month prepared
In accoralnCI wllh generally acelPted IccountlnQ gflRCIOIII,
5. H.3, To suDmlt to DUNKIN' DONUTS, wllnln ,nifty (30) daYI atler Ine dOli of ,ICh III (6) month ptnOCI,
commenono Wlln the ooenlng oltne DUNKIN' DONUTS SHOP, on In aoproved form, a prottt and 10.. 11Ittm8n1 tal'
tn. III 161 monln oenoCl ana I OllancI sn..' llndudlng a sllllmenl 01 retllnlKl lamlnOI or partnersnlp account) u
of thl ena at Ihe glnOel, AnnUli finanCIal statemenll must DI clnlhea by In Independent cer1lhla PUbbC accountanI
Of sucn 01ner mdeglneslnt PUDhC accountlnt II may De Icceotable 10 DUNKIN' DONUTS.
5. H.". To suoml1 to DUNKIN' DONUTS suCh O1ner PlnodlC 10nnlanCl "portlll may be pflscnbtd and" the
times prllCflOtCI by DUNKIN' DONUTS.
coveNANTS
Of THe
FRANCHIS!!:
SEE ADDENDtl1
5.
SEE ADDENDUH
S.C.
ShOp
Maml.nanc.
Statrlng and
Training
Training
COItI
Booka. Record.
Ind R.pona
3
...
.'
~: H,S, To _tor. _"" C,.... ",."IN.. C31_ oumg "'" ......"'........... and tor ""'-
lhan_C3, VO...-ng... lonn at"". AgMft*ll, mm.EngtoaII_...--....-
documtntl rllaang 10 the FRANCHISEE', optrauanl und.r this Ag'ltmem. or any ..... with DUNtON' DONUTS Of
ill lublldlllY. mctudlnQ but not ..maed to:
L daIlY can -"pons:
b. cun recetplllOumll and glneralledglr;
c. casn d1lbunementllOumal and weekly payroll reQlster.
d. monthly bank stallm,"t., and dllty d,pollt 'liPS and canclled cnedll:
to all \Ill. relu",,;
I. luppk.t'llnYOlCII (p11l1 and unPlld);
g. dllld casn "01lt., taPe' Idl1&lled and IUmmary);
h. Hml.annUli baJanCe ,nlltS and monthly profrt and lOll Itatemlf1tl:
i. dailY prOduction. tnrowawIY and r"ulhlnG recordl and Wftkly IrWlIntan..;
I. record' at promolion and CQupon redemptions;
k. rICOI'd. of aM whoI..... Iccountalpnor wntlln approval 01 wnoleaaJI accounts by DUNKIN' DONUTS II
'lQulledl: and
I. such other rKOfOI as DUNKIN' DONUTS ma., from lime to lIm, rIQUI't.
S. I, FFWlCHISEE .....,Ialld all ""n on. cun '1QIIlIf, m. malia, ~ and _ - at -. hU bOOn
-...y__ mWl1llnQ by DUNKIN' DDNUTS; .ucncun,agoIIat............. d....._wolI,Ialld-.nUolaCl
_ andClMOllla IUn10d baCk or I..... and. baCk...., _oystam tor _ _In ""'..... at --,
5. J. FRANCHISEE"'" Qlocur., t>ator. ... _ncamont at bUll"", and .........In luIfoIca and -
durma tn, Inti" I.rm at tN, AQ,nment. at FRANCHISEE', lOll .apenae. an anlUfance polICy 01 poUcall protec:ang
... FRANCHISEE ond DUNKIN' DONUTS. and ...il dil.cun and .mplOyHS. _nit any IOU. liability or .-
wt\ItIOe'teftrom. wrtnouIlimrtauon. tn. personallnlUry, theft. atlU1. property damage Ot otn8I'WIH. &nllng or oc:cumna
upon or In connldlOn WIth tne DUNKIN' DONUTS SHOP or by feua" at FRANCHISEE', operatIOn Of occupancy at
tn. DUNKIN' DONUTS SHOP. SuCh policy Of polJQ" IhalllndUCSI comPflnlnl1Y8 Otneralliablllty mlUrancl. InctudInQ
but not I"",,ad 10. prQCJuct. contractual, and owned and non-owned vtl'\ldlliablllty coverage.. wrtn IlInoll brTVI of OM
mtllion dollat1 t$I.000.000) (Of such nlghe, Ilmrt u DUNKIN' DONUTS. in ltIlOI. and ablQtutl dllcretlon. tnIY from
time to time "QUI". ana as may be reQultld under tn. terml ot any II'.' tor thl DUNKIN' DONUTS SHOP) for bOdIly
inrury and proptny Damage comblnld. -All Risk- proplny almag' Insurance. Indudlno wlthOUllimltaUon flood and
earthQuake protection, tor tnl tuu r,p1aclment COil value at tnl DUNKIN' DONUTS SHOP and tn. cont.nts tnereat.
plate glnllnsurance and DOlle' Insurance. ,llPpltcablt, and wen statutorY Insurance as may be reQuued m tne state
In whICh tn. DUNKIN' DONUTS SHOP II locaIld. A1llnsutanee affOtCId by In. polIClIS r~ulfed under tne tenna of
111I. Paragrapn 1...11:
1. aewonen In the names ot FRANCHISEE, DUNKIN' DONUTS. and any other partiel u directed by DUNKIN'
DONUTS. IS mel' respeCbVe Inlerlll may appear;
2. Be wnften by ,nsuranc. campanili acceptable 10 DUNKIN' DONUTS:
3. COntain prOVISIons den'flng 10 me,nsurer ICQUlllllon by lutnogauon 01 ngntl of recovery againlt any PI'tv
namld:
4. COn\IIn Ihe pfOVlllon Ihat canceltt.Uon or alteration cannot oe maCSe withoulllleut thirty (30) ctaya wntten
notICe to any party nameCS: anCS
~. NolO' limited In any way by reuon 01 any Insurance which may oe maintained by DUNKIN' DONUTS 0'
any pany nlmeCS.
Dunng Iheltfm ollnls Agreement. FRANCHISEE shall prompUy (bUlln no event laterU'lan 1In (10) CSaY' an., any
suen po&Icy beCOmll e"lctrvl or such payment's duel tunusn DUNKIN' DONUTS With duPllClt1 angmlls of aU
InlUrance poUCall. mducSlnQ rentwIJ and repllelment pollCial. togtlhlf wdt\ tvtdlnctl thIl tne prll'Numl tharetor have
beln paid. 1111 any tlma FRANCHISEE lalll to compty with the ProYlllOnS at \hll Paragraph 5.J., DUNKIN' DONUTS.
In Idd\1lOn 10 III olner remldl" aVlllaoll, Ihall navI Inl opuon IbUllhall not bl 'IQUlred) 10 obwn 1ud1lnlurance
WIth rllalCllO tne DUNKIN' DONUTS SHOP. and ""liP Ihellml.n I"ect. FRANCHISEE shllllhereupon pay DUNKIN'
DONUTS whln and II blllld 10' Ina COlli ot Ine premlumllharltor. MaIMllnanCe of Insurance and th. ptrtormanCI
by FRANCHISEE at Ine ObllgltlOnl under InlS Paragrapn InaU no1 rellttYl FRANCHISEE 01 liability und.r the Indtmnlty
prcMlIOnlll1 tann In In,s AQreemenl.
~. K. II aU condlllonl eneced.nt 10 tne opef1lng oltn. DUNKIN' DONUTS SHOP navl been IlUltied, FRANCHISEE
snau promptly OPln tnl DUNKIN' DONUTS SHOP to tne g.ne'" pUblIC U soon u conltruCt/Of1 and tQUlPPlhQ tn.
DUNKIN' DONUTS SHOP II. Iublllnbolly complot., FRANCHISEE l/Iall \I111..ftll klltl \11. DUNI<IN' DONUTS SHOP
open and In normal operation 24 nourl I day on III dl'" Ixcept ChnllmU and T'hankIQMnQ Unltll pnoI wnIlen
approyllll ObWntd tram DUNKIN' DONUTS or unltSl DUNKIN' DONUTS oth,fWllt dirtdl in wntino. FRANCHISEE
II1aIl OOO,II.t... DUNKIN' DDNUTS SHOP 10 U 10 _.GROSS SALES and....__ all 1_01\11. DUNKIN'
DONUTS SYSTEM,
!l. L. FRANCHISEE Inall submrt III IdVtl'llllno and promotional matlnall prePlred tor Ult In local .,eu to AdYIrtlllng
DUNKIN' DONUTS pno' to UIt. 'n tn. ev.nt wnn.n dtUDProval at th. adv.rtlSlng and promotional mallnat is not ApprOVII
rlCOlYad by FRANCHISEE ftom DUNKIN' DONUTS """'n ""un lIS) d.yalrom \111 d.lI.ucn mal.nal iI_ by
DUNKIN' DONUTS, I&ld matenllllhall be csnmtd appravtd UN..I and unbllubltQuenUy CSIsapPfO'il'd,
5. M. In tne event DUNKIN' DONUTS dlYllOPI I new IhOp and IIISII lne DUNKIN' DONUTS SHOP to COmpany.
FRANCHISEE. FFWlCHISEE .gr_ 10 ,mil ,",0 . LEASE OF DUNKIN' DONUTS SHOP wnn, .t DUNKIN' DONUTS' Danlopad
0'-. DUNKIN' DDNUTS Dr .1 ,ontaI .ublldoary, FRANCHISEE '._.1 tnaL In \11. ...... DUNKIN' DONUTS or R." EaIaI.
Itllualldwy l,uII me DUNKIN' DONUTS SHOP 10 FRANCHISEE. rent payabl. und.rtneleue ....Ulnclud. addttionII
compensation 10 DUNKIN' DONUTS or IlIlublldiarY tor tnl ICQuiliUOn, by purchUI or leu', or QthIrMIt. at the
DUNKIN' DONUTS SHOP. In In. ewnt, dunno Ine linn of thll Agreement or any IJClIMian thttteot. FRANCHISEE
CSiltCUy or lMCSIrtctly ICQUIfII own.rsn,p Qt contrOl at thl property, FRANCHISEE 1110 IQfHI to grant to DUNKIN'
DONUTS. under ItS ltandard LEASE OPTION AGREEMENT, tnl OPtIon 10 ICQUIrt lhelOClbOh In the evIn1 at detaun
by FRANCHISEE unaer tnll Agrllm.nt or In thllYlnt of FRANCHISEE'S dtfault una.r any leuI or mongag. relatIno
to thl Pftmllll.
.'
"llIlat...
1_
SEE AOOENWl
S.J.
Contlnuoua
Operation
.
~. a. N. FOI.MWDUNKlN.DOAHOP___....tac:aIXJn..tabea..l1.ap.I~~HlSEE.FRANCHlSEE
_ III a_ ... DUNKIN' DONUTS SHOP In __ -. ...... I~' -.- . oncl
..-cMIIIlllJIOVOClIII- by DUNKIN' DONUTS: III _._ ona1OlIln'" DUNlCN' DONlITS SHOP_,
_. .a..""'" IIgnoonclmllOl1lll tromouppll.rowNCh-.....- by DUNKIN' DONUTS; 1lI_
... DUNKIN' DDNUTS SHOP Id -" III "'" pu'" ......11II"" 1151- trom...llatO oIlIloI AQfHmInl. oncIlO
QIII'lIll DUNKIN' DONUTS ... a_ Id """"'" ... _ III IhO ..... 01 a'- by FRANCHISEE ...- ..
~ '" In ... ..... 01 FRANCHISEE'S a_ ...- IIfI _ '" naIQOllI .-.a III Illo -
FRANCHISEE IiJO _ Id ..ocut., concurronlIY Wlln "'. ..lICUlIOII 01 .. ~ but -- 1>-.....00
_ III _ 011'" DUNKIN' DDNUTS SHOP, DUNKIN' DONUTS' FRANCHISE OWNER DEVElOPMENT
AIlREEMENT oncI DUNKIN' DONUTS' LEASE OPTION AGREEMENT (Wlln _I auly ..ocutocl In ,--
"'"" by FRANCHISEE oncI "'" _, 01... pro",,_,
5, 0, FRANCHISEE.vron Id rollCMlto _ rllTlOClol ... ...nor oncI ._ ot "'" DUNKIN' DONUTS SHOP
(lncjudillQ but not_lid III 1Ixtu,", 1umI1hlnQ>.llgnloncllQUlllllllnllllO _\111I1......... (101111_01...
OnQInal DP,rung dati of tn. DUNKIN' DONUTS SHOP 10 tn. U1en amen! a.1lO" tor ahOPI of c:;omparabIe -oe and
condItiOn. Thl nalur. and ICOP' at ,,"ovabOn and remodeling snail b. u tn.ng.nera&ty rl(lUlfed by DUNKIN' DONUTS
tor II'1OPI of comparabl. 101 and condition.
S. P. In 1M eyeftI FRANCHISEE. or any paIU'llf or Ihat.noaatr thereOf. hOtdI UI'f Interest In I DUNKIN' DONUTS
_II 0111..\111I1... DUNKIN' OONUTS SHOP, FRANCHISEE _... _ _ _ora otFRANCHISEE
wna own an Inln., In any otnlr trandUltlll 10fH to ..ecut. concurrenuv 'Mlh thtI AQrHfM"S DUNKIN" DONUTS'
AGREEMENT OF CROSS.QUARANTEE 10 DUNKIN' DONUTS 10,,,, poymont otlon. ro... _...or ollligoIIOIIO tar
tech tranctult In whtCt'I FRANCHISEE Dr any panni' or It\aIahCMder thereof hcMdl or acqutIIl arrv If'ItefnL
5, 0, FRANCHISEE_IllCQltllllypn>mpllyWllnIllIQlllil:olll'-, ruin. roguIOllOIII.ordl_oncl_
01 puIlIlc .UIIlOIIIllllfldU<lil1Q. bUl not limltlld Ill.lIcMmmIl1I A4lIflan. _ 01 fire U_ - --
organIZIIIOnl. Th. ttrm -aa..rrwnent Agenau. shill tnc:tud. wnnaut I6rr'IftIbDn all ga.....NnIt'1IaI unItI. hCIw'8YW
_gnolod.__roun.""".lIloly,_,.".,_o,___lIQaplroIIOr\SoI...OUNKIN'
DONUTS SHOP,
5, R, FRANCHISEE .groll" lubmll III DUNKIN' DONUTS promQlly upon ,_ ......., ",pOol 0111I_
complaints and notices and commurucabonl tram GoYemmlnt: A;enan and heNtJ'f~.. GoYemmentAglnciel
to prcMd' dlFKUy 10 DUNKIN' DONUTS COP_" 01 a11lud'l nobCn and c:ommurucaDOr'll.
5. S. FRANCHISEE agrees to ,nleflnlotn'l Agreement and tne vanoua ather agreementS with DUNKIN' DONUTS
u an IndlYidull.lndMdUlla. general pannt"M) or corporallon prOVIded that a1IlndlVidulll. general pannI", otftcell.
IhItIhDldlrl and dlrlCtQrl (It. corporatIonl Will bl feQuued to plrsonaity guarantee full payment and pertormanc-
of FRANCHISEE'S money and ather obliQauona under tnll Agreement and IllY..... tor tn. prema... with DUNKIN"
DONUTS Of .. lubIldioIy,
5, S,I, II FRANCHISEE II' ",rporobon, SlId "" ....llllon mU1l..1n """pbItlCO Wlln... roquir_ oW"'""'-
to COfl)Orlbons III forth ,n paragraph 'D.C. herIOt;
5. 5.2. FRANCHISEE m.y not be . limrted pannersnlp, trust or other entity nat lpedfIcaIIy llUthOnZed han.
8. A. In orcllf to p,nlrw tn. validity and Int,gmy of the PROPRIETARY MARKS and to usura that tn. atIndardI
and lpeglicabons of tnl DUNKIN' DONUTS SYSTEM art property employed in thl OPIfabOn at the DUNKIN' DONUTS
SHOP, DUNKIN' DONUTS. or Itsaglnts. snail havl tn. ngnt. IlIU tun... to em.r ancIlnlpect the DUNKIN' DONUTS
SHOP and In. nom to "led matlnall, IOQrlcsllms. products. lupplill, paplf good.. unrlorml. ftxturn. fumahlngl,
ligna and IQUlpmlnl for evlluauon Duroosllla Ulurl tnal 1n.1. ..ems conform 10 tn. aandafd. and lpeallc&ticMlI
of It'l. DUNKIN' DONUTS SYSTEM. DUNKJN' DONUTS may utQulr. FRANCHISEE to remove any 111m whk:h doe. not
conform Wltn appllcabl. standardl and lpecrficabanl, DUNKJN' DONUTS my rlmew. or d.1U'OY at FRANCHISEE'I
.apen.. any 111m wtllch doel nen conto"" 10 applicabll slandWI and lpeaticabonI,
6, B. II, WlUUn IWlmy,tour 12.) nours lallowlng wnnln nouca by DUNKIN' DONUTS reQuesung tnl corTtCttOn of
an unn.altny, unl&Ntary or undlan c:ondlUan. or WIthin tmrty (30) days following wntl.n nouce by DUNKIN' DONUTS
tlQunung repairs, Il1lflllans or painting allnl Cl.NKlN' DONUTS SHOP, FRANCHISEE hll nol COrrtded thl
condition or comolltild tnl repairs, lIlerlllOns or painting, DUNKIN' DONUTS may, wnhout bttOO guilty of, or Iiabll
tor,UllPUI orlan and WIthOuI prerudtella any otner ngtttJ: Of rlmedllS, emir tn. DUNKIN' DONUTS SHOP and cause
Inl repairs, a11'rallOnl Dr palntlng 10 be comgltled, Dr U1e conclmon 10 be correald, 11 U11 IlPInle of FRANCHISEE.
6. C. DUNKIN' DONUTS' reprn.nlallVeS lnall nave tnl nohllo IlWnlne FRANCHISEE'. anQInal book., recordI
and luppomng documents a' reuanabll limes and10 pertann sucn Intlancl anaJyIlt u It: deems approP"..llovenfy
GROSS SALES, II In ....".nablll1 rovoall.nl1 In. GROSS SALES roponlld by FRANCHISEE III DUNKIN' DONUTS...
Iou ""'" ... GROSS SALES ucorwnod by Inl ......natIDt1, """ FRANCHISEE Il\IlllmmocllOt.ty ply 10 DUNKIN'
DONUTS IIfI IItKlIlntJ OWlngto DUNKIN' DONUTS oncI... Fund ond DUNKIN' DONUTS' rlntJllubsidioly - upon
""''''!tOCtIldGRDSS SALES,Al1.umonallonaslllll..I1....llllOns.oIDUNKlN. DONUTS;_r,lIon.-
rllultl from FRANCHISEE's lalIurllD grepar.. deIN.r or pr.llrvl.tallmentl or recordl required by Paragraph 5.H.
olINI AorHmlnl. or reluttl In tn. dllQMlry at I dlacrapancy In the GROSS SALES reported by FRANCHISEE,
FRANCHiSeE srwl pay, or relrnDufS' DUNKIN' DONUTS lor any and all l..p.n..1 conneald with U1. lxammatton.
~u(Mg, bul nal limned la, reasonable accounting and legit leiS, tnl unpaid amounts owed 10 DUNKIN' DONUTS,
itS rtntallublldlllY and tne Fund, and Inlerllllt'llflOR from"'l dall paymenl wu dUI..1S% per annum orUte twghII1
plmlllllb6e fill. SUCh payments will be wrtnout prerudlc. to any omlr remldlll DUNKIN' DONUTS may haYI under
1m Agrumem,lnctuding Inl nghlla l.rmlnall. WIthOut OppDrtunlly 10 CUt.. in m. cue ollnlentionll uncW.r.~tg
01 GROSS SALES,
e. 0, FRANCHISEE and all pannlrs end .harlnolde,. 01 FRANCHISEe lhaII, upon U11 requIst at DUNKIN'
DONUTS In connlCllOn Mlnlne eJ.ll'l'lnabDn at FRANCHISEE'I bookl and rtCOtdl under PII8QfI.Ph I.C. of Ita
AgrHmlnl, provtdl DUNKIN' DONUTS' reprtllmaUVII wt1h personal federal and ItIlI tax mums. bank Illtlmlllll
(Including dlpald IIII'I and canceHed chtCkl) and lucn oIhIf docum.n1a and Infannabon u DUNKIN' DONUTS fM'f
In bIOI. dlscrtllon rlQU'" in connedlOn wrtn DUNION' DONUTS' ettanIloVlnty GROSS $AlES reponed 10 DUNtON'
DONUTS una., thiS Agreemlnt or any LEASe OF DUNION' DONUTS SHOP, Personal1U rlt.umJ and ftnanaIi data
unrNIed 10 In. franChIse bUllnl.. nled nol bl provtded by any partnlr Of sharehOlder 01 FRANCHISEE who t\II nac
bien actIVIln tnl bullnl" and, in IddibOn. hu not dirtctty Of Indlrectfy owned or controlled 1111.. ma;ortty trrt.....
In "'" "'_1' '" IIl'/ LEASE OF DUNKIN' DONUTS SHOP, II"",, Dr m tonjIJl1CllOIIWlln lIfIoII1orfllraty -. '"
rel8led entrty. .
S, E, FRANCHISEE her.by grants DUNKIN' DONUTS". IlTlMlCOllI' ngtIIllI inspocl"" roconll oIlIIluppIIoro,
dlstribUlDB, group purchUmQ PfOQramI. d1llnbutlQR cenll". and other tnlrd p&rUIIIUpplytng food products, luppUII,
IQUIpmtm and mallna!l1D FRANCHISEE and hereby Inevocabty lutnOnllS IUcn parull 10 rel.u. luch rec::ordl to
DUNKIN' DONUTS,
.--
DowiopOll
Rill .-
SEE ADDEllOOH
S.N..-
R_.I
c......
-
ComP'. ICe wtth
R",,-
P_I
QuerantHI
c:-.. Rlghto
Dl DUNKIN'
DDN\rT'S
~
..
7,' '" FIIANCIIISEE _.. ODUNKIN' DONUTS" "' ,_OCI._&' allId..... nu"on
MClIl_UlIIClIlYDUNKlN' DONUTS"'IlY..__oncl-""'allId~-""-
PROPRIETARY MARKS, ",...n1IV _1lY DUNKIN' DONUTS......." may .. _uorOCl WI ,'IOIuIUf., ..........
IlIIl at "" DUNKIN' DONUTS SYSTEM'" "'" .,,_. ~ II _OCI_'" .nacnOCl \D -........
"" _ PROPRIETARY MARKS, FRANCHISEE 'Qfll' \D U.. allId........ In. DIn.. PROPRIETARY MARKS only
.. III -' and lO In' ...... ._ ......., IlY .... AQt-, FRANCHISEE IuMl' .g,"' "'" 11I'/
UMUthOnled "'I Of contInutd UII ,ftlf N tlrmnauon 01 tnlI AGt""""' shIM conaUlUt. lf1'epII8Dle nann auDtIc.t tD
........ _I, .
7, "", FRANCHISEE und........ lnll FRANCHISEE" lIC.... Id U.. .ny .. III at In' PROPRIETARY MARKS
II narHadUlld and flilllllCllety 10 tn. k)CIuon .et torth In paragrapn ,.A. a' hi Agr,emlnt. FRANCHISEE fuM,r
acMowtlGg.' tnll DUNKIN' DONUTS. In 1\1 lOll CUICf.uan, nu tn. nght to optIfll. Of trancru.. DIner DUNKIN'
DONUTS SHOPS .ncl..... OUIIIII unCI'" and td gllllt otIlllllc:an,.. Ill, Incl lO,lII'/..1II attn. PROPRIETARY MARKS,
1ft .acn CUI I' .ucn lQCa\lonl and on IUcn """1 and candrllDnl II DUNKIN' DONUTS diems acclCMblI.
7. "-2. FRANCHISEE 101.1. thai. dunnam.l.nn attN_ AQ,nm.nI and aft"tn. IxPlratlon or 'Irmnattontnlreol.
FRANCHISEE tnall not dlflCtlY Of l~rK\ly conlll1 or AId '" cant"U"; m. VallClltV Of OWMflmp at tn. PROPRIETARY
MARKS,
7, "'3, FRANCHISEE .g.... Id nll\Jfy DUNKIN' DONUTS g._ at 11I'/ h1'g.uon ,n.lrtUI.d IlY FRANCHISEE,
Of by any perlOl1. hrm Ofcorporl1lOO 101lnl' FRANCHISEE. rtllttngtatn. PROPRIETARV MARKS. In tn. event DUNKIN'
DONUTS """_.. tn. dot.n.. .. groHCUllOll at 11I'/ .ucn 1lIIQIIlOII, FRANCHISEE .g.- ,g ..OCUI' 11I'/ and III
dOCUmtma and Cla.ucn ICtI and U.ngl U may. In the WruDn of counllllot DUNKIN' DONUTS. be nKflsarylO cany
QUI IUCh CStl,"" or prolKUtlOn,
7, B, n ",,,,,"IIY 'KOQnlZad \n&llll'/ lncl"l 0- _lOCI WItI\ tn. PROPRIETARY MARKS, ,n_
11I'/ ~....." moo'" .. d......d to navollllan tnrouoh FRANCHISEE'. ac:tM\l", IIlur.. dlfOCllV and .1IdU1lVllV
lO.... _ at DUNKIN' DONUTS,
7, C, FRANCHISEE ,""IOg,""' _..... Incl gromat.tn. DUNKIN' DONUTS SHOPundartn. nomo "DUNKIN'
DONUTS-. Wllh no accompanYing wordl or lymbOll at any natur.. .~PI u may be Oth,nMII r.QUlrld by ....
FRANCHISEE lhall not UII. u pan at III carporlt. Of om.r bUlln... nlln'. anv PROPRIETARY MARKS ulla bV
DUNKIN' DONUTS. indualMQ, but not IUN.a to. .DUNKlN DONUTS.. -CUNKlN-, -DUNK- or any lann or vanauona
trllflOl Whlcn. In Ih. tuaOm.nl of CUNKlN' DONUTS. II IlkllV 10 caull Ihlra "analS 10 b. conluHCI or nullak.n WIth
fllpeel 10 In. IIPlf11l leI.ntltlel 01 DUNKIN' DONUTS Ind FRANCHISEE.
8, A.. Dunn; tn. linn of 'hll AQ'lImenl Of Iny ,.,.nllon merlOt. and tOf a plnod of IWO (2) Vi.,. Ih.r.afttr,
reQlldllll 01 tn. Clull of Itrmnlllon. nlrmtr FRANCHISEE. nor any pann'f. II FRANCHISEE il I panntrsnl", nor
any ~tr, II FRANCHISEE il a \oYI'wOllllDn, anaH. .xceP' Wtth r.IDldIO U'l1 ownmt\lP or op.ratlon DY tn.
FRANCHISEE 01 addlllonalllCtnltd DUNKIN' DONUTS lhOClS:
I. A..1. DiYlf'lor antmClt to dlV'" any bulln..1 Dr cultomer attn. DUNKIN' DONUTS SHOP to anycomplU1Or.
byalftct or IndlrlCllnaucem.nl or othtfWtll. Of dO or ptrtonn. dlfecUy or IndUtctty, any olhtr act Inluncul or pr'ludtCIat
'Igh QOWMlI..lOClOlld ",In DUNKIN' DONUTS' PROPRIETARY MARKS Ind In' DUNKIN' DONUTS SYSTEM:
I. A..2, EmClIoy Dr I"k 10 .mClloy any person whO II at thl' 11m. tmg6Oy.cs by DUNKIN' DONUTS or by any other
DUNKIN' DONUTS lrancnl"l, Dr Oln.Mllt dl"CIty or IndlrlCltY Indue' IUCh perlDl'110 I...... IUCh .mplOymehl:
8. A..3. Own. mtIntaln, .n;I;.ln. b. .mglDY'CI by. Of nay. any Intlrll' In any other bUlml" whICh IIUI or otIlfS
10111I any PfodUct at. tyDt onerld Dy I DUNKIN' DONUTS IhOCI; prOVIded thaI. dUMQ tn. twO (2) y.ar Plnod tOlIDWW'Q
tJpnllon Dr ttmunlllon ollhlS AQfnmlnl aNy, Iht ClrCMSIOM at thll subparaQflPh 3. InaII not apply to anotner
bUIlnnl tocat.d mOl.lnan flVIIS) malll from tnl DUNKIN' DONUTS SHOP or trom any om" DUNKIN' DONUTS ShOP.
Either party 10 Ihll Agfttm.nt, uDQn nOIlCtln wnllhg to Ihl otn", shall haVlln. nOn, 10 nave C1t1lrmtned whttner IlKS
IIVtI un milt fac:JIUIII. "asanG" '11tncIlon on FRANCHISEE" actMIIlS C1unnQ Uld two (2) V.ar p.nod tJy feQUIIUnQ
IhIl me mlDer D. auDml11tCS to arblIrIbDn In accorQInC' WIth m. ruin ot tn. Amlncan AlblVllJon AlloaabOn tntn
apCJtlCIblllof convntroal e11lputO. In luch evtnt. lacn pany ahIIIltltct on. arblUItor and the twO ahIIIllllCt. third
anCIlhl ctIQIIO" at In. IfC)IUltors IhaU bt 'Inlland Dlnalno upon In. pmll. FRANCHISEE lunner IgfllS tnlt.ln""
IVInt Wtrluon II flQUISlld, FRANCHISEE WIll '"9lg.ln no comgetl1JY' IClMUII p.ncllng flaaluttan ollhl dlIDUl';
or
"""-IV
-
...
Rt.'rletlona
on 'h'
FRANCHISU'S
_"
8. A.. CommUftlCl,lI or drwlg. 10. or use tar tn. benefit ot. any otntf CIIrson. p.raons. Clann.rshID. UlOQlbon
or caroorlllon any InformatIOn or knD'MIdOt canc"nlno tn, ml1nodl at construCllno. eQU'gpIng or OCllfltlnQ I
DUNKIN' DONUTS IhoD ana III olhtr Intarmallon or knowllClgl whlcn DUNKIN' DONUTS CSllml con'ldtntlal wmc:n
may .. commuNClIIO 10 FRANCHISEE, or 01 whIch FRANCHISEE m.y g. .ggn.OCIll'f Vlnu. gl FRANCHISEE',
operattOn uncler the Itrms 01 thai Agreemlnt. FRANCHISEE IhIII arwlQI lucn conflCltnllal information only to lucn
GillS tmp60yell U mull nave -=-" to II an order 10 OCllratl tnl bClnltCS bulln'lI. My and all mtonnabOft. knowttCIQ.
and knowohDW IndUCtinG. WJtnOUt IlfTUIIbOn, drawtnQS. m&1lna1l. IClec:ilabonl, IIchn1aull. and other dati. wt'ICh
DUNKIN' DONUTS CStllOnlllI u canbeltnull Ihlll be deemed canhCItnUallot gurpoHI at tnal Aorument. DUNKIN'
DONUTS IhIIl nav. lnt norHlIctUlIVt nont to Uti anCIlncofPOf'll.ln tnl DUNKIN' DONUTS SYSTEM, tor tn. bIntM
at ItSIlI and other tranenl"n 01 thl DUNKIN' DONUTS SySTEM. any modlflcltlDnI, chInO'" and amDf'QYtmlntJ
dlYlkJOtd or ClllCO'ltrtd by FRANCHISEE 0' FRANCHISEE'I tmc:MoYell or 10lnll In connlCllOn Wltn tn. bClnted
tNIlMII, WItnOUI any "Ibdlly Of otJIlQltlon 10 tht devtlOper In.reot.
8. 8. Thl COYlf\lntI contained In Ihll Paragrapn 8 Ihall be constrUtd U IlYIrabl. enct indlpend.nt and IhIII
bllnteromlCl and Ipgta.d CDnlllltnUV WI1h tnl rlQUlrem.nts 01 fluonabltntU and IQUItY, II atl Of' Iny poftJOn of a
covenant In un PlIlQlapn . il n.kS unrluonaDll Of untntorcl:lbll DY I coutI or agency haVlnQ valid JUnIdtctIOf'I In
I dlCtllOf110 WhICh DUNKIN' DONUTS il . pany, FRANCHISEE .llPfnlly IOrllllo be bQUnCI DY any II"" ccwenant
Inducted WIItun th. IInnl of IUCh g,.llIr covenant tnlt amposo me mu;Jmum duty permrtltCS t1y laW. u d the tel..,
covenant wert I'Dlfltlt'( Itlted In. and mldt I PI" 01. 'hi' Plflgraph.
8, C, FRANCHISEE uncllllWld' and _gll tnaI DUNKIN' DONUTS SlIIII nave tn. IlQhI. In os sot.
CIIICrIt:lon. toredUCllh.ICDDI at any covenant 1"1oM In tNl Paragraph'. Of of any pomon or poruonI mlfeot, WIthOUt
FRANCHISEE's conllnl. and FRANCHISEE l;fHI to comcMv fortnWllh WIth any COYInant u rnodJMd, wnacn INA be
tulty .ntorclabll. tnl provaltanl at ParlgrlP"1 t..A.. and/or t5 01 tnll Agfttmlm f\D1WrthIW\dlf\G,
I. D. FRANCHISEE IQfHI that thl '1IIlttnel of any duns Igllnl' DUNKIN' DONUTS whIIhtf Dr not ,"lInQ
IrOm ""I Agreement. snlll not conltItUtt a CSlfenlt to tn. .ntore'"""' by DUNKIN' DONUTS ot tn. coy.nantI In an
p_n8,
I. E. FRANCHISEE ICknowttd;1S tnat FRANCHISEE'I VlOllUon at Iht terml 01 thlt para;fI.l)h 8. would rnun
1ft ."tparlDl. IftlUry to DUNKIN' DONUTS tar wnlCh no adlQUlte remlCly It laW mlY DllYaatatJl., and FRANCHISEE
accordlnQt'( conllntl to tnlllluance at an anJU1'1CllDn QfOhlbltlng any conauCl by FRANCHISEE in vtQtIbDn olth.1tnnl
at \hII PIIOQrIlln 8.
9. A. FRANCHISEE snlll bl In attlull under tnll Agrttment: OII.un
6
: . I. A.1. "FRANCHISEE ahallbeCDI~ IftIOtYent or make an UIlQnmtnltDrN A c:r1lCMOl'l. or" I DIWDtI
m bll*NO\CY JI hied bY FRANCHISEE. or .ucn I ontlOn II NICI aQa'nIt ana c:onaamed UI bY FRANCHISEE. Of · not
dlllTlUICI """"" UWtY 1301 dlVl. or d FRANCHISEE II IGludlcaled I blnkNPL or" I bill '" .QUItY or otnI'r protHOlng
tar tn. IQC:lOIl1UMf'I of I rec'lV.r at FRANCHISEE or other custodian lot FRANCHISEE', buIIMIl or UHtI II fi&ICI
and .. cons,m'd 10 bV FRANCHISEE or II noI dllmllllO Wdhtn Inlr'V (30) days. or . rKeNer or otMr cullOdllll II
appolntICI. or it PlQCHdtnQ. tor COfI\C)OI4IOn wdh crldltOrl undlf any .111. or tedn law .nou&d b. ",.tItUtId by or
IQIlIlII FRANCHISEE 0' dtnlllll 0' PI""" pro..1lY 01 FRANCHISEE IhIIl bllOlCllllIvy 1I111111pon by 1IIt-.e.
rnararw or conltlbl..
t, A.2. If FRANCHISEE 11Ils" comPlY wnn ony low, flllU....." ....., 0' DUNKIN' DONUTS 'W1<IIId IIlobnO ..
hlllth,""""" ..101I1'(, 0' d FRANCHISEE CIUII" 0,,"11, .ut.... not """""lhl DUNKIN' DONUTS SHOP
lot I penod of forty 'Ign! 1_81 hDurs WIIhCMn tnl PlIOf' wnnln conllnl 01 DUNKIN' DONUTS.
I. A.3. tf FRANCHISEE I.it.. retus... or negild' 10 PlY wh.n dUtlIO DUNKIN' DONUTS any monlH owmg UI
DUNKIN' DONUTS or 10 In. Fund.
I. 14._. It FRANCHISEE IAllllo comPly ~tn any ot FRANCHISEE'. obllgauon. undlr tnl' AQrllmln. nOl OU'l.FWlI'
lit torUIln Paragrapn I at IhI. AQrlament: or It FRANCHISEE fltll to carry aut an III r"pldS ria ob61glllOM uncler Itrf
I.UI tor tn. DUNKIN' DONUTS SHOP. or under anv monOlgl. eauapmen1 aOreement. PromtUCHV nat.. conditional
..... contrIct Of otner contract mII.nally InlC1tno tn. DUNKIN' DONUTS SHOP to WftldI tn. FRANCHISEE lal patty
or by whlCft FRANCHISEE i. bOund. wh.tner or not DUNKIN' DONUTS I. · patty ~.
9, A.5, If FRANCHISEE ollonclon, 'hi DUNKIN' DONUTS SHOP: Of If FRANCHISEE Inti_IV Unol"-
GROSS SALEl .. 'II""" hnlllClll .110: or If FRANCHISEE'III_ tor tnl DUNKIN' DONUTS SHOP wnn DUNKIN'
DONUTS .. . 'U_IIIY of DUNKIN' DONUTS II t_ .. "_,
9, 8, ExcoPl U O\hOfWllO prcMdod .n PIII911ph 9 of tnll AQIIItMnt, FRANCHISEE IhlllhrII tn. riOh! to curl
FRANCHISEE'a dtfautl under 'hI' AQfltmlnl WIthin tn. appItcaDI' penod .It tonn blkM. IoIIoMnO wnften nooce ot
cetaullllom DUNKIN' DONUTS. In thlev.nt Nt I .talutll" tn.IlAI' wneretn tnI DUNION' DONUTS SHOP I. k)caI8d
rlQuartl I CWI p.rIOd lot tn. apptlClbl. d.tault wncn 1.IOnQIf trlan tn. CUt. penod ,pec;afied blkM. tn. .tllutory cure
ponocIlI\IIlltlPl'/ '
9. 8. t. A tw.nty lour 12_. nour cure Plnod .nall IPpIy to the y,gIllton ot any law. reoutabon. order or DUNKIN'
DONUTS .tanaerd FllIltnQ to health. laMabon or sal.ry: or If tn. FRANCHISEE ceUII 10 operll.. but don not
IbanaDn. Ine DUNKJN' OONUTS SHOP lor I PlnOd ot lorty Ilgnt 1-8) hOuri WIU10uttnl pnorwnntn consent 01 DUNKIN'
DONUTS,
9. 8.2. A IIv.n (7) day cur. ptnaa snail aopty If FRANCHISEE IliI.. retulla. or nlOllOI to PlY wh.n dUtl to
DUNKIN' DONUTS any mona.. OWIng to DUNKIN' DONUTS or to tn. Fund. or It FRANCHISEE filii to mIInllm tn.
inaurance coverage III Iortn In Paraorapn 5.J. 01 tnl. Agreement.
9, 8,3, A ""1lY 1301 .ay CUll ponod IhOlI opply " FRANCHISEE llill to comply wnn lilt of FRANCHISEE'I
ObltglbOnl under 11''11' Agr.ement. unle" atnlfWlU spaid en Paraoraph e of tN. AQr.ement. or d FRANCHISEE tailI
10 carry out In III r..pect. III obbO'uona under any I.... lor the DUNKIN' DONUTS SHOP. or under any mortoaQl.
lQUlP'"tnt loreemlnt, prorruSlOry not.. condfllOnallIIH contraCI or eMer contraCt mat.naJty dlCltng tn. DUNKIN'
DONUTS SHOP to wnlcn FRANCHISEE is a Party or by whlct1 tn. FRANCHISEE it DOund. wh.tner or nat DUNKIN'
DONUTS i. a pany Iner.IO.
.,. S._. No cur. plnod .nau be lvaallDl. If FRANCHISEE abandOn' tn. DUNKIN' DONUTS SHOP; or "
FRANCHISEE inltnbOnllly unc1e",DOr1I GROSS SALES or tllslfies finanCIal data: Dr If FRANCHISEe', I.... lor tn.
DUNKIN' DONUTS SHOP Wllh DUNKIN' DONUTS or a SUbSidiary of DUNKIN' DONUTS i. lermmat.d Of '.plrtl.
9. C. t II FRANCHISEE lall' 10 Ie"", when due any paymentl reqUlrlO under thll AQrHfnlnt. FRANCHISEE
lor... to PI., III cotteclton COlli. reuonlDl. Ittom..,', fe.. and mil"" on u,. unPIKI amountl It 18% per arw.m
Of' tn. hIOh... p.fmllllbl. rll.. In Iddlbon 10 tn. unPAId amounlJ.
9, C.2 If FRANCHISEE tall. 10 cure I deflult. follOWIng nottce. wrthin th. appIabI. time Plnod alt tonn in
lubPlrlOrapn 9,B.. or" tnll Aorllm.nt II t.rmlnalld. FRANCHISEE .hall PI., 10 DUNKIN' DONUTS all aamao", COlla
ana ..oen.... IndUdlnO Without hmtlaUon Int.rllt II 18% per annum. or Ihe hlOh.1I p.mdllbl. rill. and reuonabl.
lnom..,,' f....lncurred bY DUNKIN' DONUTS u. r..un or any sUCh defaull Of IInntnallon: and IIId Inler"t and all
dlmag... calts.na 'IIDtnlll.lnoudlno rlllOnaDll .norney..,.... may bllnduded In and tonnl pan oItn.1UdQfMnt
aWlrald to DUNKIN' DONUrS in any protelOlnO' brouOhl bY DUNKIN' DONUTS aOllnll FRANCHISEE. ContInUed
u" by FRANCHISEE of DUNKIN' DONUTS'lr.aemark.. trade nam... PROPRIETARV MARKS. and ..Me. markS.fI"
"rmnlbOn of thll Agrllmenl .haIl con.trtutl WIllful tr.a.mallc Inlnno.m.nt by FRANCHISEE. Notntno In inti
AQlHmlnt .nasl preCludl DUNKIN' DONUTS I,om ..eklno any remlOy unaer IIdlral or .tall Law lor 'MIllul trademark
Inlnng.~.nt. Indudlng WlthOutllmltaUon ueDtI aameg.. ana InfUncbVI 111111.
9. D. ElcePl u ..t fonh In ParagraPh 9.E.. if FRANCHISEE flila to tUf. '0 DUNtaN' DONUTS lllisfldlOn WIthin
Ih.app&ab!' penod toaOWlnQ notice tram DUNKIN' DONUTS, DUNKIN' DONUTS may. In addition to all otner remedl"
II law Of In 'QUIfV or 11 othel'Wl" IIllonn In tnll AQrlemlnl. Immedl&tltV lermnat. tnt. AQreemem. Except u Ht
lann In ParaorlPn 9.E.. sucn terminatIOn Inlll be etteC1lV8lmmlOlalety upon receapt or I wnnen noac. of tlf1Tlf1ltiOn
'rom DUNKIN' DONUTS,
9. E. Thi. Agrllment 'hllllmmtalll'tv termlnlt. upon tn. occurrence of IItV event lit tonh In Paragraph IA1..
WItheM opponuMy' to cur. or notice olllrmtnaUon.
9, F. Upon In., IIrmtnatton or ..parlbon at IhI. AO!HfT'IInt:
9, F,', FRANCHISEE ,hill promOllY pay'o DUNKIN' DONUTS II1IUfT1I_0r acauod on.." luen tonnnl\lClll
.. "_Ibon tram FRANCHISEE 10 DUNKIN' DONUTS,IhI Funo, an. DUNKIN' DONUTS' rontalluOliCliary, SaId IUITIO
IhllllllO Includ. Interllt at 18% Der Innum or tn. hlOh..' OlnnllllDlI rail and any darNOtl. COltS and .JIC)enHI.
inc1udIRQ ,.asonIDl.lnomey I '....Incurred by DUNKIN' DONUTS by reason or dltault on tn. pan 0' FRANCHISEE.
9, F.2. FRANCHISeE ,halllmmecutlty CIU. to Uti. by al2Vlrtlllno or ,n any other manner wnatsoever, IItV
metnodl UlOCllttd Wltn Ih' name "DUNKIN' DONUTS.. any or all of t". PROPRIETARY MARKS ana Iny DlMr trad.
.tctetI. conbdln1ll1 tnfOrmlbOn. OO'''IUnQ manual'. IIOOIN. ,Ion., .ymbOl. or d.Vlces tonnlnQ part Of tn. DUNKIN'
DONUTS SYSTEM or atnll'WlII Ulld In connlCtJOt1 Wltn m. operatIOn at tn. DUNKIN' DONUTS SHOP. FRANCHISEE
IQrHltftlt any unallthOmla UII or contlnuea UI. after tn.llrmmlbOn or thI. Agr..ment anau can.tnutl mlpatltM.
nann ,ubllCllO InlUnctNl rlttet.
9. F.3. FRANCHISEE .hllllfTlmlCllt.ty retum 10 DUNKIN' DONUTS a!I operauno manual.. pllnl. .p.obw.bO.~
and DInar mltlnaJ' contllnlRQ IntonnatJon pr.pllld Dy DUNKIN' DONUTS and r"llM to Ih. operatIOn at. DUNKIN'
DONUTS SHOP, Ino
9.F.4. FRANCHISEE Shill con11nueto comQlywrtn. forml oenoa .oeoftlOtnlfetn. Paragraph 8, of thI. AQreetMnt.
."
sm ADDf1lI)ltl
9.1",4.
sm ADDEJIDUI
9.A.5.
cunPaflod
SEE AIlOENOlIl
9.8.3.
No Cure Period
sm ADDENll\I1
9.8.4.
1_" and
CO'"
Tlrmlfll!lon
7
...
:~. Q. No nght Of remedY h""" ~ Upon Of ,nerved to DUNKIN' DONUTS '1 &IIVII at any om... ngnt
OtremtGY"""'" 01 DY laW 01 eqUItY prcMCIlCI Of permRteCI. but ,acn 11\III ~ cun"I&.IIUVe of 1IfrY OUt., nUM Of' remeay
gMn Nf.uncltr.
10, ", _~"'.... """ 10 lI10 _hi at lI10 .ua:o..... IIld _ at DUNKIN' DONUTS, DUNION'
DONUTS JhIM NvI t1l1"hQ1'11 to IUlQn 1\1 ngntI uncser \nll Agreement 10 any person. ptrIonI. pannerIIUP. 'I'~"""" Of
_.......",llftWIdI<llllllll1O__In_IO.........DlllIQMD1I_byDUNKlN'DONUTS-
IIldFAANCHISEE'_........."'''''"'llOIhDUNI<IN' DONUTSancll1l_101IIII1ft1d. UllOflaucn-"-
1Ild_ DUNKIN' DONUTS .111I1 bt urnllf no 1urlI1O' obbgabOn _If, ._Ior ocaued -. d Olff,
10, B, Elocolll U _ p""",ed, n.""'" FAANCHISEE. nor Olff paMIf, d FAANCHISEE i.. o"",""'IllIl. nor
",,_,dFAANCHISEE i..CUfJ)DlRDn. _DUNKIN' DONUTS' pnorwnll"'con.......... by_at
laworOU*'MH.'II6, UIIO". tranIftr. convey. gIV.away. PIIdQI. mortQ8OI orothlfWtll encumDIttaany p.raon. ptfIOl'll.
PIMIfIhIP. ur,ocaDaI'I or corgoratlDn. any mllrn1lfl UUI AotHmlnL or any tn1ernt In tnI trancnlH grantld narlby, Of
I1ff intII'm In '"" propnllcnJ'\lP. pannenhlP or corporaoon whld'l owns any "'MIl In 1M tranc:nll'. nor Oftit'. pennll Cll'
auffer the urn.. Nrt purgonea UllgNnlnt or uansfer not haVInO tne pnar wnatn consent of DUNKIN' DONUTS shill be
nul and VOId and snail conlWM detaun hereunder. Arrt P<<JOOIIO transt" mull mett a111he feqUllementJ 01 DUNKIN'
DONUTS Inducmg. but not ImtlCllo thOS. setlonn In Paragraph 10.C. and the IDlkJwlng:
10. B.l. FRANCHISEE ,nail hlY. operatlCll". DUNKIN' DONUTS SHOP for. penodot IlX (6) montnl pnortolhe
..- uanatIf,
10- B.2. Th...... pnco at 111. .....1110 bt convoyed IhalI not bt ID high. In lI10 QDDfllollh iudQmIfll at DUNI<IN'
DONUTS. U III -=' lI10 _ at In...,,...,.. 10 _no OpOrol' IIld _. tl1I DUNKIN' DONUTS SHOP
_ end mill'" _ _10 DUNION' DONUTS, \IlIId pony ._... end"-, ---
not...... Olff_ onlU polio! DUNKIN' DONUTS 10"," _ In "'"......_ DUNKIN' DONUTS_"'"
...- onesll1OlranSlIfH _ _ dll!lculll..,
10. B.3. The tranlftrH fftIY not bl alimhd pamerVip. \NIt or QthIr IntItV nOl ,pedl'aItv a1JhOnlld he,.,,;
10, B,4, N. __ money obl1981>Dnl at FAANCHISEE 10 DUNKIN' DONUTS, '"" Fund. DUNKIN' DONUTS' ,.....
1ullIlCI/Y, end Obl_ 0' FAANCHISEE _ DUNKIN' DONUTS has guotIIlIlId. ~..., d"'_ ,.... end""'"
~Unolfll1O L.EASEOF DUNKIN' DONUTS SHOP. deny. .hIIl_blln_ pnorlO_nmen1Df_.
10. B.S. The DUNKIN' DONUTS SHOP. indudlngeQUlpment.llQns. buildlng.lmptO...,mentl.intenof and .xtenOI. ahIII
De 11'I good DDem"Q condlllon and repaar and In comPlaance Witt' DUNKIN' DONUTS then<Urrent Itandan1S. IndudlnQ
wMOUt IU'ntIbOn rel'i&Ctmtnts and addrbOn..
10. B.6. FRANCHISEE and arrv Uanmer" n".by agrn not to auert any lecuntY mterest. Hn. daIm or noM now or
....._., ""'IrIncrllH...._.gqnledlOlI1O_, orl.uo Iorll1O DUNKIN' DONUTS SHOP 1Ild__
11III Olff _........ "",,, CIIIm '" 11Q", 1SIIf1Ifl_ _10 ony......... _ IIlI1O'-' --.... not
IrQ.IOI any aftlr-acawld prooerty ana &nil be Iubfed. IUMX' and SubOrdll*l to Iff'f secuntY mtereIt. lien. dim or ngN
now or ne,.."" UIlRed by DUNKIN' DONUTS. III luc:ctIIOl'1 or UIlgl"lI.
10. 8.7. In 1M evenl the tranlleree. or any paMer or ,narenoldtr lnereol. hOkb anv mllrest In . DUNKIN' DONUTS
tranct'uI ottler tnan the DUNKIN' DONUTS SHOP. thl transteree and tne paMefI and Inattno6dlf'S thereof wno own an
.......'n CIIIlIf DUNKIN' DONUTS ,rancnoll,.I.haIlIXocut. DUNKIN' DONUTS' AGREEMENT OF CRoss-aUAlWlTEE
to DUNKIN' DONUTS fa' WI payment at I.... rems and otner obbgCOns tot.acn DUNKIN' OONVTS tranchtS.ll) in whICh
the vantflfft or any partne, or snarehOlder thereat hOlds or ICQUlI'II any ,",ifill
10. C. DUNKIN' DONUTS ahaII nOl unreasonably wrtnnoId ItS content to any uansf., referred 10 ,n Paragraph 10.B.
ot tt'd AQlnmenI When reQuested. pfCMded. hQWWYer:
10. C.1. II FRANCHISEE IS an IndMdual Of partnershiP and desns 10 UIlQf1 and transter thls Agreement to I
_~IbDf1:
L Slid ttInItlfel corporaban anau be newty arganaud and ItS dW11t' snail provide that itS adMtill IN
c:onIw1edIX_lOo_gDUNKlN' DONUTSIIlDCI u_ undlf""'~
b. FRANCHISEE Dr. I' FRANCHISEE IS. partnershIP, the parme" Qnsed hlftln to operate 'h. tranc:nIH
IhIII be tne owntt' or owners of the mI/Of1lY stack m1erest at the transtIfH CQr1XN'8IIOn.
c. FRANCHISEE Dr. I' FRANCHISEE is a partnership, an. of the gaMefS lICensed hentln 10 aoerate the
franchi' IhaD be me pnnQDIt ,.ecutlV8 otIlCer of tne corpcnbon.
d. Th. transferee corporation and .. sn&renalders of traI'1SIet.. corponItIOn and 1m" mta . wnatn
1SJ9'VMm. undlr sell. In . form SItIItaaary to DUNKIN' DONUTS, W1Ih Ihl transfer.. corporaIlOn assumtng III of 1M
FRANCHISEE', otlbgltlan. under ttu. Agreement.
t. Allhlrenoldtrs at the transferee corpcntlOn ahal ,mlf V1IQ. wrmen agreement, I". ronn. II' i V
III DUNI<IN' DONUTS, ICl'"1l'f 1Ild'''-'' \lIIIIInI""'lI In. tu. poymonI ones porlormInCIllltl1l_ ~..._i'
_10 CUNKlN' DONUTS,
t. Eacn StacX Cll'1lhcatl at tn. lransferee cCWPOrabDn anall have CQf'lSDICUOUsIy endDrHd UDQn It altltlmM1l
tn.I It IS netd IUblIQ to, and tnal furtner UIlQnmlm Of tranlfet menlOlI' IUDttCt 10. au ,e.b.ctlOl1l ampased upon trInIftrI
by....~_:1Ild .
g. No nM snarn at cammon or greterred VOIInQ IIDdt In the transfef.. COf1)Of8IIOn shall be Issued 10 any
penon. persons. O&Mt1IhIp, usooatlon at COf1XRIIO" wrtnOUI Otllall"lnO DUNKIN' DONUTS' pnor wnftIn constnt. wtw:n
st\II not UNluonatltf be WlU\fteId,
10. C.2. III nnsttr,lIOnI or toQIIher WIth 011'1" prevtOU1. Ilt'l"IJftIneOS or proposed tranIferI, whitner reIItId or
unrelated. wNd MYllfIe effld at uansfemng an u'IIerest at trfty Ptn:enI (50%' or men In IhI trand1tII icIt'1Hd hlfWl,
or lI1O.11D1y llOicIlng.ucn _., 10 __ Dt/1If INI1 on Df9NII9*DfY DI \hIS ~
L The transferee and lien olttner and anarehOkflf of Iran",," must be I UniIId Statn CItIZ.In at I8WU
rlSldtm lite" at tne UOIted SIIIII and snan be of gOOd mo,. cnaractlf ancI rtpullllDn and snail nave I good crIdlI rung
and buSlnesl QuallbcIbons rtuanabty acceOl&bl8 to OUNKlN' DONUTS. SUCh QUlllIicabOn.lnctudl, 'NlIhcUt 1II'1"IabOn.
......., end ItuIncy In lI10 EngkIn 1onQUIQ' .uttc.... In m. QDDCllollh __ at DUNKIN' DONUTS. 10 """"""'**-
t,flC)ICten, customerI, ana SUCOUerl 01 DUNKIN' DONUTS and to ~.t complet. tran"Q at 000, FRANCHISEE
IhII pI'OVlC11 DUNtON' DONUTS WlU1 Such IntormIhOn as DUNtON' DONUTS may rlQWllO make sUCh detennnaoon
COl.ol,RMIQ tleft SUCh propostd lransferee:
b. The b'InIfe,lt mUll c2esagnata two manaoen lOr the DUNKIN' DONUTS SHOP, on. 01 whom must be
I tranJferH Of a oannlf or snartnolc2er at tn. trInIfef.., Pnot to tnI trarmer. bOth manaoers must auc::c:natullV c::orrcHtI
tn. DUNKIN' DONUTS lI8InInQ COUt1. thin '" etftd lei tranchtIIIs;
T_ol
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',' Co Tho...-....-.m-... .....__at.._....ond--"Y.......
anDlJNlQN' llONIIllr..................F_~-ont---~rDIdng
_....-.. _ paymanI ~ d 1Ill>iGblO. _ DUNKIN' DONUTS. Tho _ on paymanI...-
.....-.___..... ."'._.._ atont""'" 1D"*,payn'*a III .._torllla
purtNH at .. DUNKIN' DONUTS SHOP _ III DUNKIN' DONUTS anclIOr .. .- ..- urat "'. F_
~ and ........... paymanIIlD DUNKIN' DONUTS. IIla Funcl.lU1d DUNKIN' DONUTS' .-.-v"'-
_. WIII1 fOIIlIdlDlIla.......... F_~ no~......_ ..goo 0I11laGA0S5 SAL!S""-
~by PIIIOQfOIlI1I4.E. and 4.F.lhOIIbe~.
d. Tho_.II1ll.. _uaIIllftlClOIlIllIlD_an_inllla_. ."..........ganaraI
_ _.. 10. 01.. clama.QIlIlIl DUNKIN' DONUTS and. _ Ol payrnonl'---"~'
.. U_.kIngorponaclis.g_upon by DUNKIN' DONUTSlU1dlhlnnataraa. "'....mollila F_
~'IQUII..............IUIIPOIOQ"""'_betorlha llIlI>IIlUdlarmol"'~-""-
..... ponacl_I/Ian'" uno...,..larmat '''' ~ I. _ UIlIlIIby DUNKIN' DONUTS. -.".. pay
no INIT1AL FRANCHISE FEE n _.. on PlIOgropn .. at ... AQ..........
r. tt tIMI1ItM II . corporaon:
111 Eadl_"_ ul "'. nnataraa _ .llalIhho ~.- upon..
I1aIIment tnII " II held IUbtId to, and thII tunhlf awgnm.nI Of uanster tt11fe01 ill Iubltd 10. all rntncSIDN mpoIICI upon
-by"'~
121 Non...onarnofamnonorprotalTad-.g_OlIha___...-.."..be_lDont
__._..._~orco...........__DUNKlN'DONUTS'_--and
(3) MIh...lOIdnofthl.....WWII........diOI,IhIII.,..,tnlD.wrIlIn~ln.torm.. '.,
.. DUNKIN' DONUTS. joonIIy and"""'" QUOIOI1lIOII1IlIhI" payrnonl and ....~.._oCI of.. -.. -............
~..ID DUNKIN' DONUTS.
g. FRANCHISEE _ hholully pOld lU1d _ II at FRANCHISEE'. ~ID DUNKIN' DONUTll. T_....
Iha Fund. and DUNKIN' DONUTS' ,..... .-v lU1d DUNKIN' DONUTS ..... _ baarl pOld. T_ FM aquoIlD
lha_atFaurThouundDcllllo'Sol.OOO.OOl.i..........bya%_lIV'AIIIIIydunng..larmat...~
and...,ran__or.
(1) a% 01 "'. Ad,...,.. Silo Pnc. of.. DUNKIN' DONUTS SHOP' "'. ul.lako _ WlIIin uvaa (3)
yura aftIf Ih. dati on wndl FRANCHISEE OPined InII SHOP to h pubic lu I new snap). or the dmt on whid"I
FRANCHISEE 0Cll""" "'. SHOP In. pmolIIy oporalacllhOPl: or
(2) 3% of 1110 Ad!uItad SliM pnca of "'. DUNKIN' DONUTS SHOP '1Ila ul.lako plaCa _1Ina (3)
_ ""'" thO date an _ FRANCH1SEE oponad 1110 SHOP '0 IIla puIllic In . now 1hOP). or Iha data an "'*"
FRANCHISEE_1Ila SHOP In. .__IhOPI.
Tho Adjullarl 5IIn Pnca __. _ -. c:.uh. ........... of dollC. --
~. _ d_ finananQ _ amourllalllocat.. III _ 01 ....., klncl. "....lU1d dnc:npllOn: -,
_. .ogno. _ ._ and inYanUlf\'; .xdudlnQ 0"" .....- fluonaIllY _Ill land and -'
_by FRANCHISEE. II It 1nI_......IIl_.manlObe pOldlO FRANCHISEE. or forllla_of FRANCHlSEE.
_ dlllQllOl..II1ll_lfornol_ in"'. COntraclof SII. _ bed_ panoflhaAdjullarl SliM Pnca
1ncluQnQ. tlUI noIby w.., of firndllllll\. .....-1Ilocat..1O. covenanl noIlD __ or.........""- ~
Tho AdIUll" SIIn Pnca .".. be tno SII.. pnca 10 be ........ by FRANCHISEE upon _ of Iha
DUNKIN' DONUTS SHDPI...II1e..-ontpOld by FRANCHISEEforIl1eDUNKlN' DONUTS SHOPHpun:IlUarl"""'-
_M or from DUNKIN' DONUTS 0 . .........., 0....... .hOP. No adjuoImInt _ be mad. for .....- pIId In
COI",_.1.Q.\ WIth tn. develOpmtnl of. new DUNKIN' DONUTS Ihop.
DUNKIN' DONUTS'" _..""'_Ia%) or uvaa _l3llo)l. tlUI noI"" fill.. IN 01 Sol.OOCI
''''''''''0 ineronel on connar:oon _ \fIfIIf1f ofllla DUNKIN' DONUTS SHOP 10 FRANCHISEE'S 1llClUI' orona or """"
01 FRANCHISEE'S .....ran ........ "'... in DUNKIN' DONUTS' gOO<l _ _. FRANCHISEE hn boOn In ..
arnpliance _ tna.onns of III .g,oom.... _ DUNKIN' DONUTS lU1d .. rlf1lOl.UOIidiaIy. HowaYar. II1e FrancI1iIO
AgrHmem tISued 10 the .pouse and/or CI'1atdren WIlt be on 1M then ami", farm in u.. at the trTIII ottranlfer ~ tne
tntn current Transfer Fee ptCN\SlOM.
For DUf1)OMI of detemll'WlO tn. COlTId Transftf Fee, DUNKJN' DONUTS rlHMl tn. noM to rallcJeata
IITIOUl"ICI wncn FRANCHISEE and 1M ull\lflfft nave a1lOC11ed to lInd. bUlIdanO. IQUlpment. covenant agaanIt c:ornpntIOn,
......... llMea ogroomont. or llI/1e1WIS. '.,n II1a QOO<IllIl1l1 Oil""" of DUNKIN' DONUTS.1I1a alloCaIlCln ot IIla _It
_ in '_'0 II1e vllua of IIla trancMa<l _.11 DUNKIN' DONUTS _1110 DUNKIN' DONUTS
~HOP from FRANCHISEE by 0""'" of lIS ng.. of first rlfuul undor.",,-,"" 10.F. _.1110 T_ FM_
be payabI' by FRANCHISEE 10 DUNKIN' DONUTS.. H FRANCHISEE hacl_1ha trancMa<l_1O .11*'I..,.,.
h. Upon compllO/1Ca _ Iha ._ c:oncll\IonO and DUNKIN' DONUTS' approvII 0I1ha -.
FRANCHISEE and Int lharehOlClet1 or partners p&I1IOpaIlnQ In I&Id ttanster and. to IhIIJdInI at the IntIfnt 10 b _...... ..d.
thereupon be rtillYIO of tunnlf 0DUQIb0Ni undtf thlllnns at trd AQttemenl. ,xcegt thIl FRANCHISEE and any tonnIr
_'" 0' pannllI of FRANCHISEE IhIiI lI"",n oOOgal..lor FRANCHISEE'. money ~ unclaf PIIOQIOIlh
.... UVDugn tnI datI of 11I1, and under the rl1UCY8 covenantS contIlMd '" p~ B.. aftIr the dill 01".
10. C.3. 11.__hava",oottldoltrans1amng an'...rntoflorly......porcain (4") or I..... 1Ila_ T_ 01 Laaa
_ h.lIIn. or IIla 'nIIIy holding .ucn _. '0 .....-. 0111.. tnan an ongonaIllQIIOlOfY at II1It AQr.-ant: 1han c..-
L The tranlflfH and .acn PIltntr and anarehOldlf of transferee must be . Uruttd Stain cmun 01 aewu
,1Iidont a1ion of II1e U..... S"'OIlU1d _ be of QOO<I moral cnoraalf and .._II1ll..... hho. QOO<I"- raano
lU1d _. QUIilf........ fluonallly _"0 DUNKIN' DONUTS. FRANCHISEE _..-. DUNKIN' DONUTS
WIIh aucn tnfarmDon u DUNKIN' OONllTS may flqUll'l to make sUCh dtt.n....ilDOI. ............-mang NCh IUd'I ~
-:
b. The Ulnsfer" must ddQInatl1WO managn fot tn. DUNKIN' DONUTS SHOP. one of wham mull be
. UlnlfIfH Of I oartnlf or INtehOk:IIf 01 tnall'lnlflree. Pnor to tne transfer. DOO1 rnIMQefS mull aucceufultv CClI'T1PIttI
1M DUNKIN' DONUTS ttal"*'O courH then In e"lId tor tranc:::NHn:
Co Thonnataraa..ndudlnQlII._III_pannlllofln.nnataraa. .....joonIIyll1ll--"Y..--
... AQraarnont II1llI1ff oII1ar 1WllIOftl_ ~ .ndudlnQ -....-.. - paymont ...- ·
_.._DUNKlN' DONUTS. Th._onpayrnonlagreamonl...provIClo._....._.IIlO1.II1a-
.. unaIlI... ""_10_' _1D1ha_'orll1O.....,... ofllla DUNKIN' DONUTS SHOP II1llID DUNKIN'
DONUTS anclIOrllS_lU_ urarln. Frand1IIa ~ lU1d Lau..IIlO1_1D DUNKIN' DONUTS.1I1e
Fund. and DUNKIN' DONUTS' '_IUOIl<llaIY'" hho _.
d. The transteror and IIIndMduIlI PrDPQIlnO to transfer an lOt"" In tne tranc:nn. shIII..ecute. generW
,...... under .111 at II dunS .ganst DUNKIN' DONUTS ana I onont'f In payment Il)rItrnIf'l!. If ~.
I. tt tllnltIf'M III """".ACcon:
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It) Eacn IIOCM ctftIhcaI. $I. nrwterM ~pOlllOn IhIII haW COI If .e endQrHd uoon".
NIemtnI that It il nttcIlubted 10. and tnal tunnIr IIIIGfI'N"I Dfnnlfeftnereof tllUCJteCIlD. II ,..--1ft1C)QUCI upon
-by.... AQIaamI":
(2) No nn lnaruot convnon Of Dfl"terr1Cl votmO ItocX In th.ItanlferH GOo....... dOli. IhII be llauedlO any
PIfIQn. persanI. p&rtntfIhIp, UIClClUOn Of """t:lOl'lll0h W1thOU1 DbtIInlng DUNKiN' DONUTS' pnor wnun coni,",: and
(3) AII'hIr,rodm attn. transfefle corpornon lhIIIeri. mco I"'" agqwntnt. '". farm. . ...,..,
III DUNKIN' DONUTS. IOnuy and .......1'1 QUIIOI1I",ng In.luII_m II1ll par10rmIncII 01 tna tranI_ -..........
OllllQOl>OflllO DUNKIN' DONUTS.
I. Upon _ """ "'. aIOr..... CO_" and DUNKIN' DONUTS' Illl>IOYIi 01 II1a 1lanIIIf.
FRANCHiSEE ana any InatenaICIl,. or aartnm paRlClpabnQ In IIId tlanlter shill. to tn. extent at me ""ifill 10 tf'InItttTeCI.
_DO'- ul iUrtnor.-. unolfll1a 'onn. 01... AQI......m.._ UIat FRANCHISEE lU1d"" tormo,
II\IfenoIdIfS Of paMirs of FRANCHISEE &nII6 "mil" DbttQIllCI fof FRANCHISEE', money ot*gaDOnI under ParagrIPh
4.. tnrougn tn. 011. 01 Ill'. and una" lne ,..mew. cov.nants conlllneclln Paragraph 8.. aft" tn. GII' at III..
10. D. In tnt event of 'h' dllU'l 01 FRANCHISEE. Of Iny pann" Of anarlhOldlf tntf'IOf It any tlme dunno the term
of this Agrnmtnt. tn'lfOll r.gmtntltJYo at FRANCHISEE. Danner Of 1NtehD6d1f, Ic)OIthIf WIth a11IUNMnQ pam.,. or
&narenoICHfI,. If any. )Olnlty, ,nail. WIthIn In," 13) monml of .UCh....."' appty, In wnttng. forU\. ngmtouansfertn. trancnll'.
ortn'lf'II"nI ofrneaeceulO panneror snatlndd"I"lucntrancnlH.l0IucnoersDnOl' petSOnIUlM" reornen&alrYe
may 1llOQIy. Sucn 1ranI11f.naII.. __by DUNKIN' DONUTS upon tna 1uIl_ 01 III of II1a c:onclmanl.lI_ In
PlIOQIOPfll0.C.2.or 10.C.3.ln .00"c....1 ofthllAQI_ ._Ulatno_........ ba'_ 11110_
.. .1lanIlI:Iary or h.. of FRANCHISEE.
10. E. KIha 11gaI__ and lllUMWlQ _ 0"_. 111ft. dO noI comply""" 1I1a__
_ 01 P~ 10. or dO not pflllXll' .IlanIIIfH _'10 DUNKIN' DONUTS unclarlha _ .11""'"
on PnQraIlh 10.C.2. II1ll 10.C.3.. II rIg"'llcanlod 10 FRANCHISEE undar... ~ .....,armonata - and
.............., ...... 10 DUNKIN' DONUTS. DUNKIN' DONUTS IhIII ha>o 1110 flllhIlU1d -. _ upon IUCI1
'_10 1I\o<ChUI1ll1Uml1ur..lucIurn. ~gno. _pmanlll1l101narcnatlala .,.pnca IDbaOQlOarl upon bylha_
or, d no IgrftrTllnc u to pnc:e II ,.acned by 1M parHI, at.ucn cmce u m8V be dl'lermlnld by. QUIkfItd appIWIIf.
_by llOlI1_..ucn......... not ID bau__. DUNKlN.OONUTS___ot..inI....
to I.erasl UId opctan no lat., thin twenty-one (21) daya pnor 10 ItmmIbDn.
10. F. II FRANCHISEE. 01 any sn...lhOIO., Of gaMer thlftof. no recetY8d and 1311I1..10 acc:ept. Ilgned. bona hdt
Wl"Iften off" tram. U\lnl Patty' to Durcnast FRANCHISEE'ltranaull or Shaltt'lOldlf' Of panner', Im.~III" In. IJanc:f1lIl,
FRANCHISEE or aucn lhIlanotat' or paMtr IhIII noutv and plCMCI. DUNKIN' DONUTS \NIth . copy 01 .ucn ott.r, and
DUNKlN' DONUTS ahaI have en. nont and 0QtI0n. IxlfalltM' Wlthln forty.f1Ye (45) dayS.fllt III rlQltPt of . copv 01 tn.
otfw to pufChUt FRANCHiSeE'S hnchaH. or Such IharlhOlder', Df partnIf', interest an the tranchM. on tn. umltlfml
lU1d 0.."",""''' uol1_by_IIml O""f. DUNKIN' DONUTS' .._ot"flllhIlOpun:nua FRANCHISEE'._
...........".. noI ,..... FRANCHISEE ot..1lanIIIf IN ollllQa1IIlII'o DUNKIN' DONUTS undlf PIIOQIOIlIl 10.C.2.Q.
Should DUNKIN' DONUTS nDI ,xtra.. tntI opbOn and tn. tennl of tn. uMCC81X1d otter be 1ItIred. DUNKIN' DONUTS
. Shall. in tach InstInCt, De notltlld of In, chanQtd oftit' ana IhalllgaJn nave tony.fMt (45) days to purchaH on tnllIlINd
terms. ShOuSd DUNKIN' DONUTS not IXerClH thts optlon. U1ttennl at Paragraph lD.C.2. and 10.C.3. (u appbcabt'llhaI
appty to any lransl., whICh may be CCnttmcNlld.
11. A. This Agrttmlnt dotl net COOItllUI. FRANCHISEE an 101nl. 110&1 reOflsentatMI, JOInt Yenlur.r, partner,
emptoytt or IIfYanI 01 DUNKIN' DONUTS or ItS IUOIIdaary lor any purpose wrwsoever. and illl deemed undemooa
belWHn lne olRlU hereto lhat FRANCHISEE shall be an Ind,penalnt contraCIDf and II In no way .uthonled to make any
eontrId. 'Qmmen.. warranty Of reorllen1ltJOn on behalt of DUNKIN' DONUTS Of lIS IUblldWyor 10 creatl anyobbQCGn,
IlQrftlor Imolled. an Denan or DUNKIN' DONUTS or IIIIUbstOary. The parties lorN lnet thll Agreemenl does nQl crUle
. flduOlry retallOnshlo bMWfln DUNKIN' DONUTS or IIIlubs.dtary and FRANCHISEE.
1" B. Under nocrcums1lnCes IhalI CUNKlN' DONUTS or FRANCHISEE be habl.ror any.ct. omlUon,dlbtarany
0II1If otlIlQaIIOn 01 thl other. Eaen party InaII maemnrfy.na UY8 tnI otner harmlln .gatnst.ny lucn dam end tn. COlI
of defendtno IQIlnst IUCh duns antmg directly or lf1d1flt1fy tram, or U I resun or, or In connecnon WIth, FRANCHISEE'I
0_ ot 'h. DUNKIN' DONUTS SHOP.
12. No tadure or DUNKIN' DONUTS to .xerosl any power relerved to It hereunder. or to Inlll1 uPOn IIRel c:omg6IInC.I
by FRANCHISEE wath any ODllQlbon or c:onartJOn hereunder, and no custom or oractlCe of Ihl parties In vanara WIth the
1",", hereof. snail constitute. WIMtf' or DUNKIN' DONlITS' nghttOdem&nd Itncl compqnclWl1n mlllnns nlreof. WINfJf
by DUNKIN' OONlJTSof any partlCUlardeflun by FRANCHISEE shall not affect or ImOllr DUNKIN' DONUTS' nonll" rllC)lCt
to .nylubS8OU,mallaunottnl same Ol'Ofadlfterlmnature: norsnallanydellV, warver. totbearanceoromslK)f1~OUNKIN'
DONUTS to I"tale any powtl'or nontsanSlno out at anvbreachoraetaull by FRANCHISEE of any of tnl terms, DfQYlIO'\I
or cavenantI nereof allect or ImDlll DUNKIN' DONUTS' riQhtl, nor ShIIIIUCI1 conttrtull a wllYW by DUNKIN' DONUTS or
any nght het'lUIlder or of tne fI9hI to dldarl any lubSequlnt brlach or detauIL SubSeQUent accePtanCe rI'f DUNKIN"
DONUTS at tne paymentS dUllO II hereunaer IhIII not bl dnmed 10 bl . wwver by DUNKIN' DONUTS 01 any prteedlnQ
-by FRANCHISEE 01 ..., IIrma. covtnanlS or _n. 01 ... AQloamem. AocapWlCO by DUNKIN' DONUTS 01
paymenII dut II hereunderlfO'ftlny OIrson or Irmv otnIrtnan FRANCHISEE IhaII bedetmedto be a~ from 1Ud1
PIfIOl'1or entrty u an loent of FRANCHISEE and nOlIS rec:ognrtlOn oIluch person or emny u an Ullgn.. or luc:cnsor
'0 FRANCHISEE.
13. All noIICOI .'flUnd" by DUNKIN' DONUTS 10 FRANCHISEE .1lalI .. DUNKIN' DONUTS' OllUllll.' 0IfIIlI\Iily
dellvered or I,", by IIItcOOIer, or DrepaId Dnvate couner. or cenmtd m8i11O tne FRANCHISEE at tnl aoar"l HI Ionh bIIOw
or IlIUCh othtt IdOttSII. FRANCHISEE may fTom lime to bmI OM nObCI at 10 DUNKIN' OOMlTS, AI nobceI htrlt.ftder
by FRANCHISEE 10 DUNKIN' DONUTS .IlalIO. 11m by call1f>od _'0 DUNKIN' DONUTS INCORPORATED. POll otl1CI
Bax 317, RandcltDh. Musaa1u11t11 02368, Ann: Senor VICe Pr8Sldtm and aenerll Counstt or at 1Ud'1 crtner lOOtISI u
DUNKIN' DONUTS may Ilom _10 bin. ~ 01 FRANCHI 1/.
To FRANCHISEE; '/ ~ ? ',/
(I .:1
14. A. Thil AGreement. andtne documents reterred 0 hlre,n Ihall betne Intlre.1utI and comet"e eoreementDelWHn
DUNKIN' DONUTS ana FRANCHISEE concerrnng 1hIIUD!lCtmatltr nereol, ana Supersedllall Dnor agreementS. no Dlhtr
reptlllf1tDQn F\a'Mg lnauced FRANCHISEE to execute U'us AQtetment: .na mere.... no reoresentl1lonl. lnaucementl,
proms" or ''7"fT\IntS. an. or DtnIrMH. betWMn tnI parlin nDlemDOdted hlrttn, WhICh.... at any Iorc8 or ttfect WIth
retertnce IDUUlAQrnmem or01herW\II, NoamenamenLcnanoe Dtvanancfl tromtntlAgreemem IhIII be blndmQonellh"
pany Unletl 'XICUlId In wntInc;.
'4, e, The tuc:ceu at tn. bus""1 ventUre comlmQtlted 10 bl undlMken by FRANCHISEE by VIftUI at tht1
~ Illoecu&IWt.na aeoenal, to I IItQIelllnt. upontnelbllrly 01 FRANCHISEEu an anceoenaem bUllnltll'nlt1.
u wtII U athtr taaon. DUNKIN' DONUTS doel not maltl any reoresentCOnS or WWTanty U to tnl DOIentlaI "-CCftI 01
tne buSlnesl vemurt c:amemotlted nereov. FRANCHISEE ICtlnDWtedgIs tnaI II no lf11erea IntO uu., AQt.tmtnlllltr
malonO an lnaeoenalnt InvenQltlon at DUNKIN' DONUTS' operatIOns. ana not UPOn.ny rlQtfttnlltlOn 1110 profltl WhlCf1
FRANCHISEE In oll'tlCUtar mlQf11 DI IxQeCted to feWI, nor nas anyone madl any other reoreslntallon wfICt1 II nOl
exoro.,., set forth nltl'eln. 10 Induce FRANCHISEE to .ccegt tnlS Irand1IH ana lI1al11 tnIS Aq1eement.
EntIre
Ag,"""nl
Tranaler on
DaaIh
Righi 01 F1f1t
Rotuaal
AtIaUonahlp 01
PatIlat
NonaWalYer
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PEIISONAL GUARANTEE OF OFl'lCERS. SIWIEIIOLDERS
. AND DIRECTORS OF II CORPOflAnoN
...
W.,Iha_od_fl..".-.anclIOr__anolananunoraollOOlloI parcant of" 1lIIQUIOI...... 01 cap.
ItllItaCk at CHESTNUT ENTttPRtSF.!L tHe
. ~..-1IlIlOl1 orQIRlZld unaer tn.1awI at tn,lIIS' of P.nntlvlv.,,<f A
_ .omanoll1ll.-a, nOflby. _ and ........,.1l..-aIIY _ tna lull paymant 0I1ha -.....-..
_1lOOQOlIIlI\I under P~', lU1d por1IlnlW1CII of ",. _""'....... _ obliQaIIIlI\Iund" on F_
AQr--. ond\ldlIlQ P~ a in..._ r_IDIIla""""'" an"" _n 01 FRANCHISEE -.....
IIlI\IlIy agrM U1II .... P_", .1lalI be _ on aacn 01 UI poroonaIly. n I aacn 01 u. -- FRANCHISEE.
Tho "",,-""". _ andllYOlOilY. _1IlOI DUNKIN' DONUTS may, _ noIICO ID or """"'" 011110_'
1IgIlarl. (11_."- or on pan. tIlOIlmOtorpayrnonl 01"" COl...-.'. _~.. undOtPngraph
'; (bl..-.v._Iha_oI"'.__..._or-OllilOOllCll'O-or: _Iel_._
or .........~.... any cIUn of DUNKIN' DONUTS ~ FRANCHISEE or..., of1h' UllllaraIQllOd. 011_ in..., Wft/
-.a tna...- _011110 ...ldarllQl....
'Il1Ia_"..0n0..ID....._n._-
the at II ltn... (a. all). It
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DUNKIN' DONUTS INCORPORATED
FRANCHISE AGREEMENT
DDF.....IVO
CDlIV1!IlSIDN
TN. AQ".men'. d.,od R.J.Go.1- ;'l' . 19JL.. IS m... by and balw.en DUNKIN' DONUTS
INCORPORATED, a Oelawar. corporatlon having Its pnncipal plICe of bulin'lI in Randolph. M....chu.1ttI
(h....inaft.r ref,nld 10 .. .OUNKIN' DONUTS" and the follOWing individual. or entity (heftt"anl' relined to
COIlectiYIty II -FRANCHISEE-): CItESTNUT ENTERPRISES. INC.. a Penn.vivant. Cornor'ticn;
and W, JOHN CHESTNUT' JOHN DOUGLAS CHESTNUT: and SHIRLEY M. CHESTNUT
DUNKIN' DONUTS. as the result 01 the Illpendilur. of tim.. .ffor1 and monty, hu acquired Ixperience and
.kiU In thl development. opining and operating 01 ShOPI and distribution ouUltI invOlving thl prOduction.
merchandising and lilt ot donuts and other related prOductl utilizing a specially dniQned building or tacil4ty with
Iptdalty developed eqUipment, equIpment layouts, Intenor and extlrior Icc.alOn". IdentificatIOn .Chem... prOductS.
management programs, standllldl, dl'lIibutlon and delivery meum., .peclflCation. and propn.tary marks and
Infarmltion. all at which III "flnld to In thl, Agreement a. the -DUNKIN' DONUTS SYSTEM:
DUNKIN' DONUTS has dev~OPed and uled and continues to un and control the ulag. of, In connectiOn
Wdh Ita bUlln"l and the bu~n... 01 it. DUNKIN' DONUTS franchl...., cenain propnltary Intl"lII, tradem8fkl,
service markS and trade namll, Including "DUNKIN' DONUTS-, whIch Is regl.t.rod I' . trademark on thl PrIncipal
Regilt., ot the UMlt.d StatlS Palent OffiCI (tne .PAOPRIETAAY MARKS"'. to Id.ntlfy tor tn. public the source ot goods
and "MceS mark.t.d tn.reunder anel to repre.ent to the publiC high and umform .tandardS at quality, cl.anlin....
appearance and ..Mca,
FRANCHISEE. b.lMg cogMlzant 01 the dlstlncttve and valuable Signlficanc. to the public 01 all at the tor'Qoing,
d.~r.s to make use of the trademarK "DUNKIN' DONUTS", and to enloy the benefIts of that mark, tn. other
PROPRIETARY MARKS and tha DUNKIN' DONUTS SYSTEM.
FRANCHISEE und.rstands tne importancI of DUNKIN' DONUTS' high and uMltorm standards at quality,
d.anlin..., appearance and ,eMce to tne valu. at the DUNKIN' DONUTS SYSTEM and tne necessity at OPIning and
opoflting FRANCHISEE'. DUNKIN' DONUTS SHOP In contormlly WI'" "'. DUNKIN' DONUTS SYSTEM and In
ac:corcIance witn DUNKIN' DONUTS' standards and speaficatlons,
In recognitIon 01 all tnl abovl, tne parties agree as tallows:
1, A. DUNKIN' DONUTS h.reby grants to FRANCHISEE dunng the telm h.reof and FRANCHISEE accepts a
!ranChill to operate a donut shop utiliZing the DUNKIN' DONUTS SYSTEM in accordance With the terms, covenants
and conditions at this Agreement, at one location only, sItuated al
1186 Harr1Bbur Pike Carlisl. PennB lVBn1a 11013
iHoI l'" IC""OI 0..... i .. I I
(lhe "DUNKIN' OONUTS SHOP" or the ~SHOp..l. The term of this Agreemenl shall ex1end I .Ifil, (301 I" I 1m" ...,
J~U lI,a &118P !... . I.!., ,1I.1. !AS8 III a II JI J 81'111.. II ,. a", IIlIF1U\lIlii - '~I 11-1"1', i', -. until
AUltURt: 17. 1012. ,t<l11::11 11 III-I.. This franChii'll indudel the nght to USl,ln connection
therewith and at the agrelCllOCltlon, the trademark .OUNKIN' OONUTS". along With other PROPRIETARY MARKS
owned and ublized by DUNKIN' DONUTS In connection With other DUNKIN' DONUTS shoPI, and tne nght to UII the
DUNKIN' DONUTS SYSTEM Indudlng confidential and valuable Information Which now el.ista or may be aCQuired
hereafter and let forth In DUNKIN' DONUTS' operabng manuals or othel"WlSl disclosed to DUNKIN' DONUTS
trancNlles,
I, B, For a new DUNKIN' DONUTS SHOP where Ihe location is to be developed by FRANCHISEE, this !ranchise
is CJranled to FRANCHISEE sublect to land shall becoml e"ecttvl only upon comphance Wllhl the terms, covenanta,
and conditions ollhe DUNKIN' DONUTS FRANCHiSe OWNER DEVELOPMENT AGREEMENT executed concurrentty
h'fIWl,h by DUNKIN' DONUTS an. FRANCHISEE.
I, C. This Agreement shall aUlomaticaily expire upon Ihl earlier expiration of any 1'''1 relatino to the
FRANCHISEE'. occupancy ol'ha DUNKIN' DONUTS SHOP.
I, 0, FRANCHISEE and all partn.rs and shar.nold.rs 01 FRANCHISEE reprellnt and warrant 10 DUNKIN'
DONUTS that each IndMdualls a UMlted Statll CItizen or a lawful resident aliln ollhe United Statll, that each
corporation is and Shall rll1\8ln duly organized and in gOOd standing dunng the term 01 this Agreement. and that all
nnanaal Ind other information which FRANCHISEE has prOVIded to DUNKIN' DONUTS In connection With
FRANCHISEE's application lor this DUNKIN' DONUTS !ranchlSl is true and accurale,
2. DUNKIN' DONUTS .g,eeo:
flUDn (I) to aCQult1 conlrol at the reallllete tor thl term of this Agreement, and Ill) to ca KIN'
DONUTS SHOP the constructed, sublect to Ine regulatiOns 01 all governmental ving jurisdiction,
and to thereupon I.u. Ihe D 'NUTS SHOP elth.r dlrectty or thro Ildlary to FRANCHISEE, In the
evtnt DUNKIN' DONUTS IS unable to lease KIN'DON 0 FRANCHISEE. FRANCHISEE 1hal.1 have
the optiOn to I.nnlnalllhls Agreement and obtatn a r INITIAL FRANCHISE FEE paid to DUNKIN' DONUTS
or to accept a .Ublblutllocatlon shaul reposed 10 F b DUNKIN' DONUTS;
2. B, For I new ONUTS SHOP where tne locallon is to bl develop CHISEE, to approve
els Ihe standardS employed by DUNKIN' DONUTS in lelecting olher Ioca~ons I: and to
2. C. To make Ivallable thl speolubons and/or requlrem.nts tor the .qulpment to bl ubllzed In Ihe DUNtoN'
DONUTS SHOP;
2, D. To malte aV8Ilableto FRANCHISEE and FRANCHISEE', desIgnated reoreSlntatlve, prior 10 the opening of
the DUNKIN' DONUTS SHOP. D U81nlnQ program at Ine DUNKIN' DONUTS UnIVerllty Corporal. Training Cent.r tDDUl
WIth respect to Ihe operation ollhe DUNKIN' DONUTS SYSTEM;
TI1Ia PC ...2llL
R_ PC'o:
PROD.
SAT.
EDA
OTHER_
c.uLISLE. FA
P-'
'ntroducllon
a_ 0' tho
Fr.chl.1
I
ro
IntUal Service.
Fuml.had by
DUNKIN'
DONUTS
jJ
Z. E. To ptOYIda OPOfllinll procadu,.. 10 nllll FRANCHISEE In comptyi"ll- DUNKIN' DONUTS' .-
methOds of record keeping, centroll, SllltIng and tfllning requirement.. and prOductIOn methOd., and In dlYIW)ping
approyed .ourc.. 01 IUPpty;
2. F. To make IVIlIablt 10 FRANCHISEE alllllanCl, bUld on tn. Ixpenlnee and ludgment 01 OUNKJN'
DONUTS. In thl preoplnlnQ, optmng and IMial cplrlbon of the DUNKIN' DONUTS SHOP and In contonrnnO 10 the
reqUiremenll at the DUNKIN' DONUTS SYSTEM; and
2. G. To prepa', and coofdlnalltht Grand OpenIng Promotional Advlnllino Prooram lor IUcn other actvtrtiling
program u DUNKIN' DONUTS mav speedy) tor IhllnltiaJ openmg 01 the DUNKIN' DONUTS SHOP.
3, DUNKIN' DONUTS ag,..o:
3. A. To malMlaln a continuing advtSory relalionShip With FRANCHISEE. indudlng consultation In tht ar... of
marketinQ. mercnandlling Dnd general bUllne" Dc.rallons;
3. B. To prOVide operating manuals 10 FRANCHISEE. which contain th, standards. Ipeolicalionl. procedU181
and technique. of the DUNKIN' DONUTS SYSTEM. and to revtse, Irom 11m. to lime. the cont.nt of Ihe manual. to
incorporate new d.velopm.nts regarding slandards, speclliCl.llons, procedurll and lechmques.
3, C. To contlnu'lll .ttons to mllJnlalO high and uniform standards 01 qUality, cteanlin.... app.arance and IIMCe
at all DUNKIN' DONUTS IhOPI. thus protectlOg and .nhanclng In. reputation at DUNKIN' DONUTS and the d.mand
tor the productl 01 tn. DUNK1N' DONUTS SYSTEM and, to thai end, to make reasonable ettonl to disseminate its
standardl and speclhcallonl to polenhalsupplie,. ot FRANCHISEE upon the wrlnen request at FRANCHISEE:
3. D. To r.....ew lor Ipproval all proposed adveniling and promotional matlnall relating to FRANCHISEE's
DUNKIN' DONUTS operluonl prepared by FR,At.lCHISEE lor use in local advertiSing: and
3, E. To adrTunister The DUNKIN' DONUTS Franchise Owners Advertising and Sales Promotion Fund line .Fund'
and to direct thl developmenl at all advemsin; and pramouanal programs, One.fltth at FRANCHISEE',S'" advertising
contributIOn (1'" at tne GROSS SALES of tne SHOP) will be utIlized. at the discretion 01 DUNKIN' DONUTS, to provtdl
lor the admimstraWI ellpenSII 01 tne Fund and lor programs deSigned to increne ,ales and enhance and funher
develop the publiC reputallOn ana Image at DUNKIN' DONUTS ana the DUNKIN' DONUTS SYSTEM, The balance,
induding any interest earned by the Fund, Will be used tor advertISing and relaled expenles, ContnbUUans 10 the Fund
in exce.. of 5% of GROSS SALES shall be used 1M accordance WIth the programs to whIch they relale. The conlenl
of all advertiSIng, as well as the medIa In which tlie advertiSing IS to be placed and tne advertlsIMQ area. shall be at the
discrellon at DUNKIN' DONUTS. Upon reQuest, DUNKIN' DONUTS will provtde FRANCHISEE a statement of receipts
and disbu,.emenls 01 the Fund. prepared bV an independenl certified publiC accountant. lor each fiscal year 01 the
Fund.
4, FRANCHISEE agrell:
ContInuing
-.
Fumlahod by
DUNK'N'
DONUTS
PAYMENTS:
Inm.1 Franchi"
FM
,
'0 DUNKIN' DONUTS Dollars IS
reprele the INITIAL FRANCHISE FEE. payaDle as fallows: Five Thousand Dollars ($5,000.00) upon th ecwon
of thilAgr.e I; Ten Thousand Dollars 1$10,000.00) upon execution of the LEASE OF DUNKIN' 00 SHOP and
the remaining un balance prIor to anendance bV FRANCHISEE or FRANCHISEE's deslgna representattve It
tnl DUNKIN' DONU aIM,"g course or thirty (30) days pilar to the scheduled apeMlng e DUNKIN' DONUTS
SHOP, whichever date is ler.
4, B, For a new DUNKIN' 0
pay '0 DUNKIN' DONUTS
senting the INITIAL FRANCHISE FEE, pa . as lallaws: Four Thous
this Agreement: and Ihe remaIning unplld ba e upon wllnen
location Iorlh. DUNKIN' DONUTS SHOP. 11th. DU . DON
filleen <<15} months Irom the date 01 this Agreement, the
INITlAL FRANCHISE FEE, which shall b. payable 10 D
to terminate thil Agreement.
4, C, Al any t.me pllor 10 the time Ih e second paymenl reqUI under Ine lerms of Paraoraphs 4.A at 4.B
at this Agreement becomes due, FRA ISEE may, bV written nollce. termln hiS Agreement. In Ihal evenl. DUNKIN'
DONUTS will return thelMltlal insl ent PllJd upon execution of thIS Agreement, I
($2,000.00) to compensate KIN' DONUTS lor aSSIstance rendered to FRANC
Franchise tee, are not twlse refundable.
SEE shall pay to the Fund Three Thousand Datlars ($3.000.00), which shall nretundable after
the DUNKIN' NUTS SHOP commences operation, for a Grand OpenIng Promotional AdVlf1lsing am (or luch
other. mslng program as DUNKIN' DONUTS may IPecify). Payment shall be made In full prior to an
F HISEE Of FRANCHISEE's deSignated re~fesentattvl al the DUNKIN' DONUTS training course or thirtV (
4, E. FRANCHISEE shall pay to DUNKIN' DONUTS at Post Office Box 294, Randolph, Masl8chul8nS 02368 (or Continuing
.uch other address u DUNKIN' DONUTS shalllrom lime to lime gIVe to FRANCHiSeE in Willing), on or betare Thursday Franchi.. FH'
ot IKh week, a sum equal to tour and nine tenths percent (4.9%' at the GROSS SALES at the DUNKIN' DONUTS SHOP
lor the .even (7) day paned ending allne dose of business on the preceding Saturday. The 'erm -GROSS SAlES.
In thls Agreement Ihalllnctude all sales made by FRANCHISEE pursuanl to this Agreement, but Inall not Indude the
sale of cigarettes, sale. taxes or SImilar lUIS,
4. F. FRANCHISEE shall paVia Ihe Fund althe lame lime. for the sameslY8n (n day periOd, In tnesame manner Advertising
u, and In addition 10. the gayments provided tor under Paragraph 4.E, of Ihis Agreement. 5% of the GROSS SALES
of the DUNKIN' DONUTS SHOP lexduding wholesale Iale. to accounts approved in Wilting, in advance. by DUNKIN'
DONUTS) . 'n addition, FRANCHISEE shall panietpate In and make additional payments 10 the Fund With rllpect to
all advenlsing, martle,,"g and other DUNKIN' DONUTS programs wnich from lime 10 lime are supponed by a ma;onty
at prodUCing DUNKIN' DONUTS SHOPS In the market In WhIch the DUNKIN' DONUTS SHOP Is loCated With rllpect
10 local programs. and In the Continental UnIted States, WIth respect to nallona! proorams, DUNKIN' DONUTS IIseNII
th, nohl In ItslOte and ab.oIut. discretion 10 designate or change the compollbOn 01 IhOps induded In the bUI tor
purpolllofdetemuning amaIOtI"'. FRANCHISEE shill navecomplele dlscrellon U lathe pnces ne charglslor product
IOId In the DUNKIN' DONUTS SHOP. Nothing ner81n shall be constNed to require FRANCHISEe to establish price.
In accordance With programs sUClponed bV tne malOllty of shops.
JiJ
'"
I
Rltund. ~~.
Orand Opening
Z
5. FRANCHISEE und.,.lands and ~~."ctg.. tnat every dltall of th. DUNKIN' 00. SYSTEM ilimportant
10 DUNKJN' DONUTS. 10 FRANCHISEE and to oth.r DUNKIN' DONUTS franChIS"1 '" order to d.....lop and nwnlaln
high ana untlorm ltandards of QUality. cl.anlln.... appearance, llMee. facdlliel, prOductl and technlQUIIIO mereue
th. demand tor DUNKIN' DONUTS products and to protect and enhanCI thl flPutauon and goodwlU 01 DUNKJN'
DONUTS. Accordlnglv: FRANCHISEE agrltl to: d.vole full time. energv and effort 10 the management and operalion
of thl DUNKIN' DONUTS SHOP; obtain from DUNKJN' DONUTS pnOt wnnen epproval of iii whOlesale lCCQuntl; un
belt eHortl to nWlImiz. MIll of th. DUNKIN' DONUTS SHOP; .nsure accurate reporting of GROSS SALES to DUNKIN'
DONUTS; and Implem.nt aU procedurel recommended by DUNKIN' DONUTS 10 minimize employ.. 'hell.
FRANCHISEE further agre.. thai employeelheft Ihall not flhevl FRANCHISEE of thl obligallon to make all payments
to DUNKIN' DONUTS bUld on GROSS SALES pursuant 10 Paragraph 4. of this Agreemenl and thai accurate rlporting
01 GROSS SALES Includes MnglOg alllales In tnl cash register at the lIme the prOduct Is d,livered to Ine purcn""
including WllhOulllmllatlon relBlI. whol..a1.. bulk discount sales and Salll for which paym,nt may D. dellned.
FRANCHISEE also lo,e..:
5. A. To use all materIals. ingredients. ~uppl1e5. paper g-.lOdS, unllorms. II.lures. furniShings. Signs, eqUlpmenl,
methods at extenor and IOtenor design and construCllon and melhods ot product preparation and delivery prllcnbed
by eN' WhIch conform wIlh DUNKIN' DONUTS' standards and speclhcallons and to carry aut the Duslness covered by
thil Agreemenlln accordance With the operatlonalstandal'ds and specdicatlons eslabllshed by DUNKIN' DONUTS and
IItlor1h in DUNKIN' DONUTS' op,raling manualS and other documents as Ihev presently ,xlsI or Ihallexlsl in theluture
or II may b. oUlefWlII disclosed to DUNKIN' DONUTS' Iranchllles Irom time 10 time.
5. B. To retfllln Irom uSIng or sellino any products. malenals. ingredients, supplies. paper goods, unlforml,
tlxtur... furnlShingl, Ilgnl, equipment and methods at product preparauon, merchandlSlng, and delivery which do not
mHt DUNKIN' DONUTS' standards and IplClflCluonl,
5. C. To ott.r for sale only .uch products as shall be expressly approved tor Iale al the OUNKlN DONUTS SHOP
In woling in advance by DUNKJN' DONUTS and 10 after tor sale all prodUcts that have been deslgnaled al approved
by DUNKIN' DONUTS.
5. D. To mBlnl8ln at all limes a sufticientlupply 01 approved produCll.
5. E. To purchase all food products. supplIes. equlpmenl and matetlal, reqUIred lor Ihe operation of the DUNKIN'
DONUTS SHOP from suppliers wno demonstrate. 10 the reasonable satlslactlon 01 DUNKIN' DONUTS, the ability to
meet all of DUNKIN' DONUTS' slanaardS and speclllcallons lor sucn Items: wno possess adequale capacity and
faCilllles to supply FRANCHISee.S needS In the Quanlltles. al the times and With Ine reliabIlity reQuISlle to an etf1clent
operation and WhO have Deen approved. in Willing. Dy DUNKIN' DONUTS. Prior 10 purcnaSlng any Items tram any
supplier not preVIOusly approved by DUNKIN' DONUTS, FRANCHISEE shall submll 10 DUNKJN' DONUTS a wntten
requesl tor apprOVal ollhe supplier. DUNKIN' DONUTS may requlrllnat samples from the supplier be delivered to
DUNtON' DONUTS or to a designated indep.ndenltesung laboralory lor tesling prior to approval and use. A charQ.
not 10 .xc.ed tne actual cost 01 the t..tshall De made by DUNKIN' DONUTS and thall be paid Dy FRANCHISEE:
provided, however. tne cost 01 the Ilrsl test requesled by FRANCHISEE in any calendar year shall be bOrnl by DUNtON'
DONUTS.
5. F. To maIMtalO, at FRANCHISEE's expense. at a1lllmes.lhe inlenor and exterior otthe DUNKIN' DONUTS SHOP
and all fixtures. turnlshinQs.su~ns and eQuipment In 1ne hlghesl degree of cteanhness. orderliness, sanitation and repair,
as reasonably requited by DUNKIN' DONUTS. and to make no matinal alleratlon, addition, replacement or
Improvemenlln. or 10.lhe inlenor or extenor (inCluding the parking 101 and landscaPed areu) ollhe DUNKIN' DONUTS
SHOP Wlthoutlne pnor wfltten consenl of DUNKIN' DONUTS.
5, G. To manaqe I'" DUNKIN' DONUTS SHOP at all limes wllh at least mo (2) Individuals. one of whom must
be the FRANCHISEE or panner or snareholder of FRANCHISEE. Botn indiViduals must have successlully completed
Ihl DUNKIN' DONUTS trainIng program at ODU. Both IndIViduals must have hteracy and fluency In thl English language
sutflcienl,ln the gOOd tallh opinion of DUNKIN' DONUTS, to satlslactorlly campi ell training al DOU and to communicate
with employees, customers. and suppliers 01 DUNKIN' DONUTS. In tM evenl FRANCHISEE applies for and rlCltIYIS
approval 10 dftVelop or purchase an additiona! DUNKIN' DONUTS shop. DUNKIN' DONUTS require' thai the edditlonal
shOp be managed by at least one ODU traIned individual approved by DUNKIN' DONUTS.
5. G.l, To ensure lhat all employees at' trained in accordance WIth DUNKIN' DONUTS In.snop training
procedures. Alia. _FRANCHISEE shall ens:,ne lhal the manager and all employees whose dulles Inetude cuslomer
IIMCI havI luftlcl'nllluency In the Enghsn lanQuage to adequately meel tn. Pl.:tlhC In Ihe DUNKIN' DONUTS SHOP.
5. G.2. To anend and 10 reQuire those employed in the DUNKIN' DONUTS SHOP to attend such funher training
81 DUNKIN' DONUTS shill tram lIme to tlml reasonaDly reQUIre.
5. 0.3. To pay the cost of training materials, salaries. accommodations and Iravel expenses. if any. of FRAN.
CHISEE or any oth,r IndiVIdual employed In the DUNKIN' DONUTS SHOP. FRANCHISEE WIll also Dear the co.1 of In.
shop IrBlmng programs. The cost at presentIng the DOU training program Will De borne by DUNKIN' DONUTS.
5. H. To kee", full, compl,le and accurate bOOkl and accounts in accordance Wltn generally acceDted accounting
prlnaptes and In the lorm and manner prescnbed below or as may De tUlther presenDed by DUNKIN' DONUTS from
lime to ume.
5. H.1. To submit 10 DUNKIN' DONUTS. on or belore thurSday 01 each week. on an approved lorm, B slgned
statemenl of GROSS SALES for Ihe seven 17l day pened endlnO atlhe dOli of DUllnes. on the preceding SalUrday
along Wllh all monies reqUIred 10 De p8ld under PareQrapns 4.e. and 4.F. of thiS Agreement
5. H.2. To submll to DUNKIN' DONUTS, on or betore the twenlieth (201h) day of eaCh month. on an approved
form. . prolil and 10llstalement 01 the DUNKIN' DONUTS SHOP lor ,n, preceding calendar or fiscal month Pflpared
In accordance Wltn generally accepled accounting pnnoptes.
5. H.3. To submll to OUNKI~' DONUTS. Within Ihlrty (30) days alt,r the dose 01 each SIX (6) month plnod,
commencmg Wltn Ihe openIng ol,ne DUNKIN' DONUTS SHOP. on an approved lorm. a profll and loss llalem.ntlor
Ihe IIX 161 month PInOd and a balance sheel hndUdlng a stalement 01 re111ned earmngs or pannershlp account) U
of the end of lhe penod. AnnUallinanCial statements must b~ by an Independenl cenlfled puDhC accountanl
or such oln'r independent pUbliC accountant as may De acceptatllelO DUNKIN' DONUTS.
5. H.4. To suDnut10 DUNKIN' DONUTS sucn 01n8' penodlc lorms and repon. as mav De prescnbed and at thl
tim.. prescnbed by DUNKIN' DONUTS.
COVENANTS
Of TH!
FRANCHII!!:
Shop
Maintenance
Slamng and
Tfllnlng
Training
COI"
Booke. Recorda
and Reporta
*prepared
IHmAL
110
J
5. H.5. To pre..rve for. Plriod 01 nOllelllhan thre. (3) .,..,. dunng the term of thtt Agreement and lor not leu
than thrH t31 ve.. follown1g tne term ollhts Agreement,ln Ihe Englllh Ianouage, aU accoUntinQ records and SUppDnlng
documents relatlng to Ihe FRANCHISEE's operations under this Agreement, or anV leUI WIth DUNKIN' DONUTS or
illllUbatdialy, including l1ut not limited to:
L daily c:uh repens;
b, cash receipts journal and generalledoer;
c, cash disburaements )Durnal and weekly payroll regilter;
d, monthly bank ltatemenls, and dilly depollt llips and canceled checkl;
e. III tax relurns;
t. supplier', inVOlClI (plld and unplldl:
g. dated calh regtller tap" (delllled and summary);
h. lemi.annual balance sheels and monthly profil and 1011 stalements;
I. daily production, Ihrowaway and finishing records and weekly invenloMel;
I. records of promotion and coupon redemptlons:
k. records 0' all whCltelale accounts (pnor wnnen approval 01 wholllale accounts by DUNKIN' DONUTS II
required): and
I. IUch other records al DUNKIN' DONUTS may from lime to time requIIl,
5. I, FRANCHISEE shall record a111a111 on 8 cash reQl.ter, the make, model and..riaI nl.mber 01 whk:h hu been
indMduaJly IJlIlfl>Varlln Wf1IltlQ by DUNKIN' DONUTS;.uch c:uh reQlI1If.haI1 conlain. OIYlC.II1atWl1l reconl_
IIIn and cannot bllumed back or rll81. and a back-up power tyIlem tot memory lloraQl in the event 01 power ku,
5, J, FRANCHISEE Ihall procure, belore Ihit commencement 0' buain..s, and maintain in fulllorce and Inlet
during thl enllre lerm of Ihll Agreement, at FRANCHISEE', loti e.penae, an In.urance poliCy or poIlc1" protecting
the FRANCHISEE and DUNKIN' DONUTS, and tnelr dnecto,. and employee., agl.lnlt any loll, liability Of expense
whatsoever from, WIthout limltalion, fIFe, perianal injury, tl'\eft, death, property damage or othel'Wllt, ansing OfOCCUrring
upon or In conneCllOn With tne DUNKIN' DONUTS SHOP or by realon 01 FRANCHISEE's operalion or occupancy 01
thl DUNKIN' DONUTS SHOP. SUCh policy or pohclllshalllndude comprenensive generat liability Insurance,lnduding
but not hml1ed to, product, contractual. and owned and non-owned vel'\iclella~hty coverages, Wllh a smglelimit at one
million dollarl ($1,000,0001 (or such I'\lgher limit as DUNKIN' DONUTS, in ItS sole and ablolute discretion, may from
time 10 lime require, and as mav be reqUired under tho lerms 01 any lease lor Ihe DUNKIN' DONUTS SHOP) lor bOdily
injury and property damage combtned, "All RI'k" property damage Insurance,,, ~j~d.. ':lI . II ~~ll , U _ . II.!.!.! a.. .
__II .._!II .flllllan. for tl'\elull replacement COlt valut'ol the DUNKIN' DONUTS SHOP and the contents m.rlO',
ptat. gln.inlurance _ ,d t.v,l. 1.!. '1," applICable, and auch statutory Insurance as may be required in Ine ltat.
in wtuch the DUNKIN' DONUTS SHOP II located. AU Insurance afforded by the poliCIes required under the 'ennl 01
IhII POIOQllph .hall:
1. ee wnnen in the names of FRANCHiSeE, DUNKIN' DONUTS, and any other pani" U directed by DUNKIN'
DONUTS, as tl'\eir respectIVe interesl may appear;
2. ee wnnen by insurance companies acceptable to DUNKIN' DONUTS;
3. Contaln prOVIsions denying 10 the Insurer acquilition by subrogation of rights of recovery agllnat any party
named;
4. Contain Ihe prOVIsion that cancellalion or alteration cannot be made Wltnout alleast thirty (30) days writt.n
notice to any party named; and
5. Not be limited in anV 'Way by reason 01 any insurance which may be maiMtillned by DUNKIN' DONUTS or
any party named.
During the term at lhis Agreement, FRANCHISEE shall promptly (bulln no evenllater than ten (10) daysaftlr any
such policy becomes effective or such paymenl is due) furnish DUNKIN' DONUTS with duplicale orlginall 01 all
Insurance policiel,lnduding renewal and replacemenl poliOI., together WIth mdence thai the premiums thereforhave
b"n paid. If al any time FRANCHISEE lails to comply with the prOVisions 01 this Paragraph 5.J., DUNKIN' DONUTS.
in IddiUon to all other remedies available. shall have the option (but shall nol be reQuiredllo obtain suCl1 insurance
WIth relpect 10 the OUNKIN' DONUTS SHOP, and keep the same," effect. FRANCHISEE shall thereupon pay DUNKIN'
DONUTS when and as billed for the costs ollhe premIums Inerelor. Maintenance of Insurance and the performance
by FRANCHISEE of the obligations under this Paragraph shall not relieve FRANCHISEE of liability under Ihelndemnity
proviSions lit forth In Ihls Agreement.
5. K. It all conditions precedent totne opening 01 Ihe DUNKIN' DONUTS SHOP have been satisfied, FRANCHISEE
lhall promptly open Ine DUNKIN' DONUTS SHOP to the general public as loon as consUUctlon and equipping the
DUNKIN' DONUTS SHOP are .ubllanbllly compl".. FRANCHISEE .hll.'h....nlf k..p 'h. DUNKIN' DONUTS SHOP
open and In normal operation 24 hours 8 day on all days e.cept Christmas and ThanklgMng unl..s poor wntten
approval Is obtained from DUNKIN' DONUTS or unle.. DUNKIN' DONUTS olherwise dirtctl in writing. FRANCHISEE
shall operate the DUNtoN' DONUTS SHOP 10 as 10 muimize GROSS SALES and mllntaln a1lltandardl ofthl DUNKIN'
DONUTS SYSTEM.
5, L FRANCHISEe shall submit all advertiSing and promotional malenals prepared for use In local aren to
DUNKIN' DONUTS prior 10 use. In the event wrltten disapproval of lhe advertiSing and promotional matlrialll not
received by FRANCHISEE from DUNKIN' DONUTS 'WIlhln IIlIeen (t5) daYI from the date 'uch mattnal i. rtc:lfVed by
DUNKIN' DONUTS, s8ld malenall shall be dttmed approved unllls and until subseQuenl1y dilapprovN.
5. M. In the lVent DUNKIN' DONUTS develoes a new lhop and 'e.sel tne DUNKIN' DONUTS SHOP 10sFRANCHISEE, FRANCHISEE agreel to enftr Inta a LEASE OF DUNKIN' DONUTS SHOP With, at OUNKIN' DONUTS'
Opllon, OUNKlN' DONUTS or itl rental SUbSidiary. FRANCHISEE recognizes that, in UlIlVenl DUNKIN' DONUTS or
11Isublldwy leasel the DUNKIN' DONUTS SHOP 10 FRANCHISEE, rent pavable under thel,..e Wllllndude addlllonal
compensation to OUNKlN' DONUTS or ItS lubStdiary for Ihl acqUISition, by purCl1ue or lease, or olhlrwill, 01 thl
DUNKIN' DONUTS SHOP. In the event, dunng the term of this Agrttmenl or any extenlion thtflOf, FRANCHISEE
dlrec:Uy or Indirectly ICQUllII ownerlhlp or conlrOl of the property, FRANCHISEE alia aorees 10 grant to DUNKIN'
DONUTS, under Its slandard lEASE OPTION AGREEMENT, Ihe optlon to acqUIre Ihe location in thlevenl 01 default
by FRANCHISEE under this Agreement or in the event 01 FRANCHISEE'S default under any le.se or mortgagl retatlng
to the premt....
RO\Ilatara
Inauranc.
*nev or used
!itJ
ConUnuoul
Operation
Advertising
ApptOV.1
Coonpany.
0...10...
R... Eolal.
4
a. N. For a now DUNKIN' DONUTS SHOP whollln. _uon "'0 b. dovatopod by FR..... .HISEE. FRANCHISEE
10'''' 10 dlWlop tna DUNKIN' DONUTS SHOP In accordance With planl. lpecrficationl. clocumlf1latton and
procedure. approved in wnhng by DUNKIN' DONUTS; 10 purChase and lnatallln lhtI DUNKJN' DONUTS SHOP fixture.,
turn&ahCng., IQulpmlnl, I.gna and matInal, f,om luppli'" whICh haYI bien approved by DUNKIN' DONUTS; to CAUU
thl DUNKJN' DONUTS "SHOP 10 Optn to Ihl publiC wllhin fifteen t 15) monthl trom tnl dati 01 lhi, Agrllment, and to
grant to OUNKlN' DONUTS th, option 10 acQU1r1 tne IocIUon In Ih, ,vlnt of dlfauh by FRANCHISEE undt, this
Agreement or In In., IYlnt 0' FRANCHISEE'S default under any IIU, at mortgage relating to the pr.".....
FRANCHISEE 1110 Igr... 10 '.ecule, concurrently With lhe IJ.lCUUon 01 Ihil Agreement. but belCH'1 PerrMUno
conl1ruClJon to blg,n on Ih. DUNKIN' DONUTS SHOP, DUNKIN' DONUTS' FRANCHISE OWNER DEVELOPMENT
AGREEMENT and DUNKIN' DONUTS' LEASE OPTION AGREEMENT (v.'" anacnmlnlllduly ..oculodln recordabl.
fann by FRANCHISEE and tnl Ilt1downtt oltnl premls".
5. O. FRANCHISEE Igrl" to renovall and remodeltne intenor and IxtlricH at thl DUNKIN' DONUTS SHOP
lindudinQ but nolllmlted 10 fixtures, furnIShings. sIgns and equlpmentl nQ later than thl tenth (10th) anmver..ry of thl
. to the then currlnt deSIgn tor shops at comparlble IgI and
condition. Thl nature an\1scope 01 renovallon and rem ehng shall be as tnen generally required bV CUNKlN' DONUTS
'Ot shops of comparable Ige and condlllon. (late of this Agreement
5, p, In the .vent FRANCHISEE. or any parlner or shareholder therect., holds any inter..t In. CUNKlU' CONUTS
tranchlse oth.r Ihan the DUNKIN' CONUTS SHOP, FRANCHISEE and the pann.,. and sher.noId.rs of FRANCHISEE
who own an Inl,rlll in any other Iranchlse(s, agr.e to eaecut. concurr.ntly With thiS Agre.ment CUNKlN' CONUTS'
AGREEMENT OF CROSS.GUARANTEE to CUNKIN' DONUTS lor the payment at t,.., rents and oln.r Obligations lor
each tranchill in whiCh FRANCHISEE or any pann.r or shareholder thereat holds or acquit.. any Inler..t,
5. Q, FRANCHISEE aore.. to compty promptly With III applicablelawt, rulli, regulations, ordlnancll and Otdera
of public aulhontltl indudlng, but not Iimted 10L Government AgenClII, Board 01 Fire Underwnlerl and olh8l1imdar
organiz.Itionl, The lerm -Government Aoel'lCl"- shall Include Without limitation aN govemmenllJ unlit, however
dllignated, which addrlls health, sa'ety,' sanltallon, etMrDnmentaJ or other i,suII anlCtlno Dp.rabonl of the CUNKlN'
DONUTS SHOP.
5, R, FRANCHISEE agr,e.ID submIt 10 DUNKIN' CONUTS promptly upon rlCllpt thereo', copi.. at all customer
comptaints and nDbc.. and communlcallons from Government AgenCleland heleby lulhotizlI GovernmentAgenci..
to provide directly 10 DUNKIN' DONUTS coj::lIes 01 allsucn nDtlces and communicabons.
5, S, FRANCHISEE agrees tD enter 1010 thIS Agreement and tne vanDUS olher agreements WIth DUNKIN' DONUTS
81 an IndMdUm.lOdlVldualS, general partnershIp or corporallon prOVlded that all indiViduals, generlJ partners, Dnee,.,
lharenolders and dlrecto,. III a corporallon) Will be reqUired 10 personally guarlntee full payment and performance
DI FRANCHISEE'S money and Dlher obligallons under this Agreement and any leue for the premises W1th CUNKlN'
DONUTS or Its lublidlery,
5. S,'. It FRANCHISEE Isa corporation. said corporation musl be In tomp'iancewith the requirements applicable
to corporations III forth In paraoraph 10.C, hereot:
5. S.2, FRANCHISEE may not be a limited partnership, lrusl or other entity not sPlClfically luthonzed heroin.
8. It. In order 10 preseNe the validity and integnty Df the PROPRIETARY MARKS and lO usure tnat the standards
and speclflcallDns of Ihe DUNKIN' DONUTS SYSTEM are property emplO'ftd In th, operation Df the DUNKIN' DONUTS
SHOP, DUNKIN' DONUTS, Dr its agenls,shall have the nOhl, al all times, 10 enler and Inspect the DUNKIN' DONUTS
SHOP and the nghl to select matlnals, moredienls. prOducts, supplies, paper OOOds, uOllorms, fixtures, furnishings,
Ilonl and equlpmenl for evaluation purposes to allure that these Items conform ID the standards and splClficattona
of the DUNKIN' DONUTS SYSTEM. DUNKIN' DONUTS may require FRANCHISEE to remove any item whtch does not
conform with applicable slandards and IPeollcations, DUNKIN' DONUTS may rrmove or destroy 8t FRANCHISEE',
elpenll any Ilem whICh does nDI conlDrm 10 applicable standBfds and ,pecdicationl,
8, B. II, WIthin twenty.lour (24) hours follOWIng wnnen notice by DUNKIN' DONUTS requesting the correction of
an unheanny, unsanitary or undean condition, or WIthin thirty (30) days following wnnen notice by DUNKIN' DONUTS
requllllng repllrs, alleratlons or pamllng Dt the DUNKIN' DONUTS SHOP. FRANCHISEE has nDI corrected the
condition or completed the repllrs, mterlllons Dr palnllng, DUNKIN' DONUTS may, Without beinQ gUllly of, or liable
lor, trespass orlort and WltnoUt preJudice 10 any Dlher righls Dr remedies, enler the DUNKIN' DONUTS SHOP and caull
the r.pairs, alterabons or PllnllOg to be compleled, or the CDndltlon to be corrected, at Ihe eapense 01 FRANCHISEE.
8. C. DUNKIN' DONUTS' representatlves shall have the nght to examIne FRANCHISEE's anginal books, records
and IUPportIMg documents at reasonable times and 10 perform suCh leslS and anmyses as it de,ms agpropnatetovenfy
GROSS SALES. II an laa""nallon reveals that the GROSS SALES reported by FRANCHISEE to DUNKIN' DONUTS 11I1
'''I than the GROSS SALES aSClrtalned by the eaamlnallon, then FRANCHISEE shall immechately pay to DUNKIN'
DONUTS any amountsOWlng to DUNKIN' DONUTS and Ihe Fund and CUNKlN' DONUTS' rentaJ subSidiary basld upon
the COlrecled GROSS SALES, All examlnatlDnslhall be Illheelpenllof CUNKIN' DONUTS; however, if an examination
rHuIII from FRANCHISEE's failure tD prepare, deliver or prellNe statements or records reqUIred by Paragraph 5.H,
of this Agreement. or resutll In the discovery of a discrepancy in Ihe GROSS SALES reponed by FRANCHISEE.
FRANCHISEE shall pay, Dr reimburse DUNKIN' DONUTS fDr any and atl eapenllS conn.cted With Ihe eaaminatiOn,
induding, but nOlllmlted 10, reasonable aCCDunllng and legal feel, tne unpaid amounts owed 10 DUNKIN' CONUTS,
its rentallublldiery and the Fund, and inl,rest thereon trDm th, dale paymenl was due at 18% per annum orthe hlghe"
permiSSible rate. Such payments WIll be WlthDut prejudiCe ID any other remedl" DUNKIN' DONUTS may have under
'hil AGreement. Indudlno the nght to lennlnate, Without opportunity to cure, In the case Df InlenliOnal underreporting
01 GROSS SAlES.
8. D, FRANCHISEE and all partners and shareholders DI FRANCHISEE Shall. upon lhe requllt Dt DUNKIN'
DONUTS in connection Wllh Ihe ellllmlnation 01 FRANCHISEE's books and records und,r Paragraph S.C. ot this
Agreement, pf'OVld, DUNKIN' DONUTS' representlJltVes wllh pellonallederal and stat. tax rlluml, bank statements
(InctUdiMQ deposit sliPSInd canceUed checks) and suCh other documenls and Inlormation 81 DUNKIN' DONUTS may
In itlloIe dlsClellOn reQullt In CQnnlCtJDn Wllh DUNKIN' DONUTS' e"onllo verify GROSS SALES reported 10 DUNKIN'
DONUTS under thiS Agreement Dr any LEASE OF DUNKIN' DONUTS SHOP. Personal tax returns and finantlal data
unrelaltcS to the tranchlll bUllnes' need not be P'OVldtd by any partner or Ih8Ieho.tder 0' FRANCHISEE who has not
b"n IctJvlln the bUSiness and. in addition, has not dlrectfy or indirectly owned or CDnltOlled at le8lla m_ortty Intmat
in Ihe franchise or any LEASE OF CUNl(lN' DONUTS SHOP, alone or in COnjunctlDn With any other Iamly memblt Of
"Ilted entlly.
8. E. FRANCHISEE hereby grants CUNKIN' DONUTS the irrevocable tight 10 inspect the record. of atlluppllers.
diStributors. group purChaSing programs, dlstnbutlon centers, and other third parullsupplYlMg food Products,supplill,
eqUlpmenl and matenall 10 FRANCHISEE and hereby Irrevocably authonzes such parbll to release suCh rlCOl'dl to
DUNKIN' DONUTS.
FrMChl....
Dnolo...
Rail Eatat.
R_.I
gJ
Compllanca wtth
Regulatlona
Plnonef
Guarani...
C.rtaln Rlghls
01 DUNKIN'
DONUTS
a
7. A. FRANCHISIE 'cknowl..g.. 111II "DUNKIN' DONUTS" II . r~lIl1arl _ tI1aI.... ff\IItl hu baarl
and tI being used by DUNKIN' DONUTS and by itl franchllln and lic.n..... thlllaid martl,lOgether WtU'l tne other
PROPRloITARY MARKS, ..n,"Uy ownarlby DUNKIN' DONUTS or which may ba acquor" "' "'. Mull, r:onali1ul..
'*' of 1M DUNKIN' DONUTS SYSTEM and thai valuable goodwill i. '11OQI,1ecl WIth and attached to IIld mark and
Iha PIllar PROPRIETARY MARKS. FRANCHISEE .g....1O UI. .... mark and tn. otne' PROPRIETARY MARKS only
in the manner and to the exttnt IpeahcaUy liCtnHd by hi AgreemenL FRANCHISEE fuMer ear... ttwt any
unauthortled UII Dr conllnued u.. ane, U,. t,rmlnallon of thit Agreement .hIiI COr'IIUtutI~' nann subject to
Injunctive ,eli,',
7. It..,. FRANCHISEE undl"tands thai FRANCHISEE',IIC.n,. 10 UII any or ad at the PROPRIETARY MARKS
II non..IlClUINI and rNI.. SOIIIy 10 th,locallon ",forth in Pltlgrapn 1.A, 01 this Agreement. FRANCHISEE further
acMowIldgtl that DUNKIN' DONUTS. in III 101, discretion, hat tn, ngnt to op"atl or franchl.. othl' DUNKIN'
DONUTS SHOPS and .11.. ouUtta und.r, and 10 grant Q1htrlicln...ln, and to, anvor all olth. PROPRIETARY MARKS.
In tach cu. al such locallOnl and on such ttrml Ind condllion. I' DUNKIN' DONUTS dtems acceptable.
7. A.2. FRANCHISEE IQrelllhat. dunng th'l.rm at this Agreem,nt and after th, ,xplrabOn 01 l,mnaliOn 1hertol,
FRANCHISEE Ihall nol dlrlCUy Of IndlrlCUy conlllt or lid tn contelhng tne validity Of own,r'hlp at tne PROPRIETARY
MARKS,
7. A,3. FRANCHISEE .gllll to no',ty DUNKIN' DONUTS prornpUy 01 any itig.bon inlli1ul.. by FRANCHISEE.
or by anyperson, firm or corporation 10llnll FRANCHISEE, r.lllIng totne PROPRIETARY MARKS. In the event DUNKIN'
DONUTS uncIenaxlltn. d.len" or prosecution at any ,uc:n "ligabon, FRANCHISEE lore.. to 'lIecut. any and aU
documents and do auCh ICtI and tning,.. may,ln the Oplnlon 01 counsel for DUNKIN' DONUTS, b, necessary 10 cany
out IUCh def,".. 01 prolecution.
7. B. l'lt "p..llIy 'ICOQnlz..1haI any and III gOOdwlU UIOCia'" _ "'. PROPRIETARY MARKS,lndudIng
..., g00dwili which miQht ba .Mmod to ha>o anoln 'rvough FRANCHISEE'I actIVttIII, inur.. <llrldly and .lCCIuIIvoIy
to 1110 _ 01 DUNKIN' DONUTS.
7. C, FRANCHISEE ,hall opellll, ......... and _" 'h. DUNKIN' DONUTS SHOP under"'. name "DUNKIN'
DONUTS., wilh no accompanYing WOfdl OIlymbt't. of any nature, .xcepl u may b, oth.rwill ,equlred by law.
FRANCHISEE shall not U.., U PM at itl co,porale or oth.r bUlln.1S nam., any PROPRIETARY MARKS Uled by
DUNKIN' DONUTS. Indu.'ng, bu' noIllmll",o, 'DUNKIN DONUTS", "DUNKIN", "DUNK" 0''''' Iorm or variallana
th_1Ot which. in tn'lUdom.nt ot DUNKIN' DONUTS. II likely to cause tnlrd partlll to b. contused or mlltD..n With
r..pect to th. ..paral. Idlntlhes 01 DUNKIN' DONUTS and FRANCHISEE.
8. A. During the Ilrm at this Aoreemlnt 0' any 'IItenSlon thereol, and lor a penQd 01 two (2) y.ars th.r.a"."
'1QIf'dI... 01 tn. cau.. 01 termnatiOn, nlltner FRANCHISEE, not any partn.r,1I FRANCHiSeE la I partnership, nor
"" 1/IaraIlokl1f. I FRANCHISEE II . _. II1aIl. ....pt _ r..poc:t to "'. OWIlIfIhip Of oporatlon by "'.
FRANCHISEE 01 _lIllcanl" DUNKIN' DONUTS lhoPl:
8. A.1, DIvet1 0' anempt 10 dlv." any bulln... at CUltom., at th. DUNKJN' DONUTS SHOP to any competitor,
by direct or Indirect Inducem.nt Ot oIh.lWlse, or do or perlorm. dl,ectty or IndlrtctJy, any olh., act InJurtou, or prejudicial
to IIla g00dwili _t.. WI'" DUNKIN' DONUTS' PROPRIETARY MARKS an. "'. DUNKIN' DONUTS SYSTEM;
8. A.2, Employ Of ..ek 10 .mploy any ptl'lOn who is at tnat time employed by DUNKIN' DONUTS or by any other
DUNKIN' DONUTS trancni..., or oth.rwllI diredly or indlrlCUy Induc. luch p.rson 10 'elVtlluch Imploymtnt;
8. A.3. Own, malnllln, Inglo.ln, bl emp'oyed by, 0' have any Int.r"t In any other buSiness whd1l1l1. or ofte...
10 IIl1 "" ....UCIol. typl one,.. by' DUNKIN' DONUTS IIhop; P,......II1a,. .unng ""IWD (2) Y'" p.nPd loIIowing
e.pUaUQn 0' terminabQn 01 thiS Agreemenl anty, the prOVIsion. ollhil lubparaoraph 3. lhall not appty 10 anoIhIr
bUlln.:. tocalld mort than fiv.t5) mlllI trom the DUNKIN' DONUTS SHOP ortrom any olher DUNKIN' DONUTS 'hOp.
Either party 10 thll Agreement. upon notice in wnhng to the oth.r, Ihall have Ihe righllo have dltermlned whethe, utd
five (5) mile radiUS IS. reasonable reslnCtion on FRANCHISEE', IctMtlll dunng IIId two (2) year period by ,equHUng
that th. matter be .ubrMlld 10 atbItrabOn in accordance WIth the rules at th. Amencan ArbiUabon Assodation then
apptiCabI.lotconvn.raal disputes. In such event. each party shad .tled on. artHtra10r and the two IhalIltledl thtrd
and th. dlQllon ollhe IIbltIatorlshall be final and binding upon the partlll. FRANCHISEE furth.r 10'ItIIhaI, in th.
evtnlarblttatlon is ,.qullled, FRANCHISEE Will engag'ln no competitive aclMtill p.nding resolution of the dilput.;
0'
P,oprto..y
-
R.ltrictlonl
onlll.
FRANCHISe'S
-.
8, A.4. CommunICate or dl't'U~' 10. or use lot 'h. blneflt of. any OI"er p.rson. p'l'SOns, partnership, aslOCl8t1on
or corporabOn any mlormallon or knowledq. concernlno the methOds at constructing. eQuipping Of' operabng .
DUNKIN' DONUTS shOD and all oth.r In'OrmBtJon or knowledge whtCh DUNKIN' DONUTS deems confid.ntlal which
may b. communicated to FRANCHISEe, or of which FRANCHISEE may b. appnled by VlltU. 01 FRANCHISEE'.
operltion under the tenns of this Agreement. FRANCHISEE shall divulge .uch conridential intormatJon only 10 IUCh
at Ita employees u must nave acasslo illn ord.rlo operat.th.lIC1nsld bulln.... My and a1llnlonnatiOn, knowltdQ.
and know-how induding, wrthout bmitatlOn, dr8WIngs, matInal.. IpeaficatlOnl, tlChnlquII, and oth., data. wNch
DUNKIN' DONUTS dUIOMlles IS confldentlal.hall be d.emed confld.ntlal tot purpos.. of thil Agreem.nt. DUNKIN'
DONUTS .hall hay. the non...cruSivt nght 10 UII and incorporate In the DUNKIN' DONUTS SYSTEM, for the btneIlI
ot ils," and oth.r Iranchlsees 01 the DUNKIN' DONUTS SYSTEM, anv modifications, Chanoes. and improv.ments
dtwloped or discovered bV FRANCHISEE or FRANCHISEE', em~oy.tI or aoents In conntCIton Wllh the licensed
businnI, WIthout any liability or obligabon 10 the devetopll' tn.reof.
8, B. Th. COYtnantl contAIned In lnis Paragraph 8 shall be construed asseverabl. indlndependent and IhaII
blintlrptl1ld and applied consi'tlnlly WIth the reqUirements ot reasonabl.n.., and eqUity. It an 0' any ponton of.
covenant In this Paraoraph 8 is held unreasonable 0' unenforceable by a cou" or agency having Valid Jurisdiction In
. deCIIton to whICh DUNKIN' DONUTS is . party, FRANCHISEE e.pressly agrlls to be bound by any I....r covenant
indudld WIthin tn.lennl ot such oreller covtnanlthll impostlth. maximum duty p.rmllted by law, u" th. II...,
covtnant WIf. Itparatlly stated In, and mad. a paIt 01, lni' Paragraph.
8. C, FRANCHISEE understancs and acknOWledOes thai DUNKIN' DONUTS shall ha.... the nght. In Itl 101.
dlscretlOn,lO reduce the scapi ot anycovlnant III'O"h In Ihls PiU'aorapn 8. or at any pornon 0' pofIIon, thereat, WIthout
FRANCHISEE', conlin', and FRANCHiSeE 80reello com~ torthwlth Wltn any cov.nanl IS modified, which Ihd be
tuttv .nlorceabl., the prDVIslans of Paraoraphs 14 A. and/or 15 01 this Agrttmlnt notwrthSlanding.
8. D. FRANCHISEE aorees tnat thl eI!stence 01 any dalms aOainlt DUNKIN' DONUTS, whether or nOl arlIing
trom thll Agreem.nt, ,nall nol constltul. a detenll to tn. .ntorcemenl by DUNKIN' DONUTS olth. covlnanllln thl,
PlIOQIIPhB.
8. E. FRANCHISEE aCknowledges that FRANCHISEE', VlotahOn at Ih. tenns 01 thll Paraqraph 8. WOUld r"un
IJ1 irr.parabI. '"Iury 10 DUNtON' DONUTS 10, wt\ICh no adequate remedy It law may b. avaKable. and FRANCHfSEE
ACClOI'dIngty consenll to thellluanc. 01 an InlUnctlOn prohlblbnO any conduct by FRANCHISEE in VloIabQn of tn. terml
olthll Parlor_ph B.
9. A. FRANCHISEE Shall b. In dlfault unde, this Ag,eement:
Dolaull
B
I
,~, .
a. 14.1. If FRANCHISEE thlll become inlOlv.nt or make an ullgnmlnt for tht beMM 3ed,torl. or If I pntk)n
In bankruptcy i. filed by FRANCHISEE. or luch. petltiOn i. flied Iglmlt and contentld to by FRANCHISEE. 0111 nOl
diamlued wltNn thutv (30) dIVI. Of I' FRANCHISEE I, adjudicated. bankNP1, or If. bill In eqUity or other proceeding
fat thl appointment of . recllV,' of FRANCHISEE or Dlher custOdian for FRANCHISEE', bUlln... or 11111111 Ned
and 11 con..nt.d to by FRANCHISEE or '1 not allm.lled WIthin thirty (30) day.. or I rKIN" or othlr cUltDdlan II
appointed. 01 If "roc'edlngl to, compolltJon WIth aeditora under any atatl or ftd'fIitaw IhQUtd bl inltrtUttd by or
Iglinat FRANCHISEe 01 It the 'laI or personal property of FRANCHISEE ahall be IOId IlIevt ther,upon by any antnff,
matlhal or constable.
8. A.i. II FRANCHISEE f4lt. 10 comply WIth any law. regulation, order or DUNKIN' DONUTS standard rtlltlng to
hlatth. IINtatlon OIlIt.ly; or If FRANCHISEE ceas,.IO operate, but d081 not abandon, \hI DUNKIN' DONUTS SHOP
for . perIOd of forty eIght (481 hours WIthout tne pflor wnnen consent of DUNKIN' DONUTS,
9, A.3, If FRANCHISEE faill, refulls, or neglects to pay when due to DUNKIN' DONUTS anv manl" crMnQ to
DUNKIN' DONUTS or 10 the Fund.
9, ".4, II FRANCHISEE fails to comply WIth any of FRANCHISEE's obligations underthil Agreement not OU\Irwil'
Ie' tanh In Paragraph 9 at thLs Agreemenl; or II FRANCHISEE failllO carry out In all rllpeetsltl obllgahonl under any
I.u.lor the DUNKIN' DONUTS SHOP, or under any monoaoe, equipment agreemenl, promllsory noli, conditlonlj
aaln contllct or other contract matenally _",ctIMO the DUNKIN' DONUTS SHOP to winch the FRANCHISEE II. party
or by which FRANCHISEE il bound, whether or nOl DUNKIN' DONUTS II a party thereto,
9. A,5, If FRANCHISEE abandons the DUNKIN' DONUTS SHOP; or it FRANCHISEE intentionally underrepona
GROSS SALES or falllfiea financsal data; Of I' FRANCHISEE'I leue for Ihe DUNKIN' DONUTS SHOP With DUNKIN'
DONUTS or I lubtldlary of DUNKIN' DONUTS II terminated or e.pir...
9. a. Except I' OthlfWill provided In Paragraph 9 01 this Agreement, FRANCHISEE ,hall have the right ta cur. Cure P,rfod
FRANCHISEE'I default under this Agreement wltt1ln tne applicable penod let torth below, Ioll000ng wnnen notice of
olfault Irom DUNKIN' DONUTS,ln th....nt IIla'a llolUt.ln Ill. 110.. wnlfoin 1111 DUNKIN' DONUTS SHOP II Iocalod
requlr.. I CUfl period for the applicable default wnich Illonoer than tne cur, periOd ,plClfied below, Ihe ltatutory cure
panpd IhllllpplV,
9, a,1. A twenty lour (24) hour cure penod Ihall apply to the violation ot any law. regulation, Qt'der Qt' DUNKIN'
DONUTS standard relatLng to health, saMatlon or safety; or If the FRANCHISEE ceases to operate. but do.. nol
abandon. the DUNKIN' CONUTS SHOP for a penod ollorty eloht (481 hours Wllhoutthe pflorwllnen conlent of DUNKIN'
DONUTS.
9. a,2. A liven (7) day cure period shall apply If FRANCHISEE laill, refuses, or neglects to pay when due to
DUNKIN' DONUTS any moniel OW1ng ta DUNKIN' DONUTS or to Ihe Fund, or II FRANCHISEE faill to maintain the
Insurance coveraoe III tanh In Paragraph 5.J, olthl. Agreement.
9, B.3. A IhIIly (30) dlV CU'. Plriod Ihlll apply" FRANCHISEE flJlI '0 comply wilh anv 01 FRANCHISEE'I
obUgatlOns under IhLI Agreemenl. unle.. othefWISllplClfied in Paragraph 9 at this Aoreeme"', or If FRANCHISEE llils
ta cany out in all respectl its obligations under any lease for the DUNKIN' DONUTS SHOP, or under any mongaoe,
equipmenlagreeme"', promiSlOry note, condlllonal Iales contract or other con1fact materially anecting the DUNKIN'
DONUTS SHOP to which FRANCHISEE Is a party or by which the FRANCHISEE il bound, whether Qt' not DUNKIN'
DONUTS is a party Ihereto.
9. a.4. No cure penod shall be available " FRANCHISEE abandons the DUNKIN' DONUTS SHOP; or if No Cure Period
FRANCHISEE intentionally underrepons GROSS SALES or falsifies flnancal data; or If FRANCHISEE', lelse lor the
DUNKIN' CONUTS SHOP with DUNKIN' DONUTS or a SUbSidiary of DUNKIN' DONUTS Is terminated or e.plles,
9. C,1 It FRANCHISEE falls 10 remit when due any payments reQulJed under this Agreement, FRANCHISEE Int..lt and
aorees ID ply all collection colli. roasonable attorneY'1 fees and Interest on the unp8id amountl a118% per annum Costa
or tne hiOhest penrnsSible rate, In addItion 10 the unpaid amounts,
9, C,2 II FRANCHISEE lalls to cure a default, following notice, WIthin the IPplicable time period lit lorth to
lubparagraph 9,a" or If this Agreement IS terminated. FRANCHISEE shall pay to DUNKIN' DONUTS all damao.., coltS
and eltpenllS, includino Without Iimltabon Interesl al 18% per annum. or tne hlgnesl permissabl, rail. and rellOnabte
anomey.' feel, incurred by DUNKIN' DONUTS as a result of any suCh delaull or termination; and said inlerest and all
damages, costs and e.pense"lMduding reasonable anorneys' Ie.., may be induded In and form a pan otthe judOmenl
awarded to DUNKIN' DONUTS in any proceedLngs brought by DUNKIN' DONUTS against FRANCHISEE, Continued
use by FRANCHISEE of DUNKIN' DONUTS' trademarks. trade names, PROPRIETARY MARKS, and seMce markllner
termlnalion ot Ihis Agreemenl shall constitute Willful trademark Infringement by FRANCHISEE, Nothing In thll
Agreemenl sl'\8ll preclude DUNKIN' DONUTS from seeking any remedy under federal or state law for WIllful trademark
Infringement, Including WIthout limitation trebl, damages and Injunctive reliel.
9, D, Except u sel fonh In Paragraph 9.E" it FRANCHISEE tails to CUrt 10 DUNKIN' DONUTS satls'aCtiOn wittVn TermlNlllon
th. appltCable pened '011 OWIng nOhce from DUNKIN' DONUTS, DUNKIN' DONUTS may, in addlhon to all other remedle.
at law or in ICIUlty or as othefWIse I8t fanh In this Agreement. Immediately terminate lhis Aoreement. ExcePI ., III
fonh In Paragraph 9.E., such termmahon shall be effective Immediately upon rec81pl of a wnnon nollce at termination
lrom DUNKIN' DONUTS.
9, E. Thil Agreement shalllmmediltety terminate upon tne occurrence at any event sel fonh in Paragraph 9A 1"
without opportUnity 10 cure or notice 0' termination.
9, F. Upon any termination or e.plration of this Agreement:
9, F.1. FRANCHISEE shall promptly pay to DUNKIN' DONUTS all sums OWIno or Iccrued prior to such terminatiOn
orl.piration from FRANCHISEE to DUNKIN' DONUTS, the Fund. and DUNKIN' DONUTS' rentallubsldiary. Said ,urnt
shin also include Interest 0' , 8% per annum or Ihe highest permISSIble rate and any damag.., cosII and e.pinto,
Indudi",O rellOnaDl, anorney'slees, Incurred by DUNKIN' DONUTS by reason of delau" on the par1 01 FRANCHISEE.
9, F.Z, FRANCHISEE shall Immediately cease 10 use, by advertlSIRO or In any olher manner whatsoever, any
methOdl uSOClated WIth the name -DUNKIN' CONUTS., any or all 01 the PROPRIETARY MARKS and any olher trade
aec:rell, conhdential inlormation, ope,atlng manuals, Slogans, Signs. symbolS or devices lorming pan of the DUNKIN'
DONUTS SYSTEM or othlfWIlI uttd in connection W1lh the operation 0' the DUNKIN' DONUTS SHOP, FRANCHISEE
agrell that any unauthonzed use or continued use after thetermlnahon 01 this Agreement sl'\8l1 constitut.lrreparabfe
harm lubl8Ct to InjunCtive reliel,
9, F.3, FRANCHISEE shalllmmeaiatety return to DUNKIN' CONUTS all opera1lng manuals. plans. speclicatlonl
and other matenals contaming IR'ormatlon prepared by DUNKIN' DONUTS and relative 10 tne operahQn 0' a DUNKIN'
DONUTS SHOP. ano
9.F,.. FRANCHISEE .hall conllnue to comply with, for the pened speolied therlln, Paragraph 8. otthIIAg"ement.
7
I. G. No ngnt or rlmldy h.r..n contened upon Of' r.I.Ned to DUNKiN' DONUTS II ucluliVe at any Dthef nght
Dt rwmedy herem, or by law or eqUIty prCMded OJ pennm.d, but.ach lhan be curnutative of every otneJ nght or r.medy
given hereund.r.
10. A. ThIs Agretmtnt lhaIIlnur. to tn. benellt of the luccellOfl and alltOnl of DUNKiN' OCNUTS. DUNtON' T..-ter D'
DONUTS IhIII haW U1e nght to UIIgf1It1 nghta under thll Agreement 10 any p-.on. PerIClnl, pannlrlhiP, lllOO,hnI\ or 1"","*
co.........."p_"""...IIonIt...._on"",",olOuaumolll~._byDUNKlN.DONUTS-
lU1dFRANCHISEE ,_a .latemantlrom bOIh DUNKIN' DONUTSII1ll'II_Ill"""'lIacl. Upon.ucI1l1OlQMl1f11
and 1IIl.mPbOr1. DUNKIN' DONUTS shall b. under no furtn.r otJllOallOn h'reundll,'1CIPI for.ccruld MabditieI, If 1IYf.
10. B. Except u herllnlfter P<<Mded. nllther FRANCHISEE. nor any paMef, "FRANCHISEE II a pannersnip, new
af'i Iharlh06der, " FRANCHISEE is a corporabOn. WllhOut DUNKIN' DONUTS' poor wonen con"",, ahaII, bV operatIOn at
law or otherWIH, IIU. HlIOn. lranafer, conv.." QMt away, pledg., mortgag. or otnefWlM encumber to any perlOr1, persons,
partnerIhlp, UIOQ8bOn Of corparatlOn, any Inler.1t In thiS Agreement. or any Inllf'" In the francRH granted hereby. or
any Internt In any propn.torShlP, partnershlp or CQfPOIallOn whICh owns any intlftst In th.IranchIs., nor off." pennd at
lUff" th. aamt. Any purpQr11d aSlIgnment or !tansler no! haVIng the ~nor wnn.n consent at DUNKIN' DONUTS IhaII be
nul and void and IhIII contIltut. default h.reunder. Any proposed Iransler must meet a~ the reqUlfIfn.ntl 01 DUNKIN'
DONUTS IndudinQ, but not limited 10 thOSe set lanh in Paragraph 10.C. and lhe tollO'Ning:
10. 8,1, FRANCHISEE .hall hove opera'.. 'he DUNKIN' DONUTS SHOP lor a ponod 01 11'(6) men'" pnor'OIho
propooacl.....fer.
10. B.2. Th. sales pnc. of the Int.r.sllo be conveyed shall, not be 10 high. In the good tarth itJdgn'tent of DUNKIN'
DONUTS, n ID jaOpoId~' IIle abolrty ollila .....,01" 10 ma"."n, 0_' lU1d promol. 111. DUNKIN' DONUTS SHOP
propo"., lU1d mHl No fil1Ol1Clli obfiQall<>n.1O DUNKIN' DONUTS, third pony .upplioralU1d crarlrtora. Thl. pIO'Iillon -
noI......., IIIbiIity an... port 01 DUNKIN' DONUTS '0 tt.. _ in............ DUNKIN' DONUTS approynlha
Ira1ItIr and the tranaferH .Jlpenenc:es fInanaaI ditliaities.
10. 8.3. ThallonltllM may noI ba alimll" penn_lp, lrult or athar en1ily nOl .paaficaJIy aUlhorlzarl he...,;
10, 8,4, A1111CC1Uarl money obfiQall<>ns of FRANCHISEE '0 DUNKIN' DONUTS,... Fund, DUNKIN' DONUTS' 'onIIl
IUllIkliIIy, and obIiga1lon1 01 FRANCHISEE whicl1 DUNKIN' DONUTS hu gUlfllltNd, ti'nI, 0_ fI'" and aJI_
obIiQaIlana under 111. LEASE OF DUNKIN' DONUTS SHOP, II..." .hallhho """ IIbar... poor '0 UIiOrvn.'" or .....fer.
10. B.S. The DUNKIN' DONUTS SHOP,lndudingequlpment,aigns. budding, improvemenl1, Inl.nor end.denor,1hII1
be In good operating conthllon and repalr and In compliance with DUNKIN' DONUTS th.n-current standards. tndudlOQ
W1thoul iimltallOn flPKements and additions.
10. e.8. FRANCHISEE and any Uansferee her.by agree nOllo au.n any UCUnIV Inleml,li.n, claim 01 nght now at
h........ln thillrandllll. the fnInchls.grantedtothatransllJH, or I....torthe DUNKIN' DONUTS SHOP and IurU1lfaQfH
IhIt In/ lecunty mllJllt. lien, claim or nght alllJlld WIth reapect to any personal properly' 11 the above ~ shill not
Indude any aftar-acqured PfOPII1V and shall be subject, jUl'llOf and subordil\ll. to any HCUntV Intlllll. U.n, c:Iaim OJ nght
now or hlJ8lller asserted by DUNKIN' DONUTS, IlIsua:e11Orl or 811iQnt.
10. 8.7. In the ....nt the transfera., or any partn.r or shareholder lh.reof, holds any int.rest In a DUNKIN' DONUTS
franchise other than the DUNKIN' DONUTS SHOP, the lransf.ree and Ih. partners and shareholders thereof who own an
I",,,,",,,, 011111 DUNKIN' DONUTS Irenc:hA"('I.llalIe.ecu1e DUNKIN' DONUTS' AGREEMENT OF CROSs.GUARANlEE
to DUNKIN' DONUTS lor 11'1. payment olfns, ,.ntI and other obliQlbOns for.ach DUNKIN' DONUTS franchise(s) In which
the transf.ree at any panner or lharenold.r th.reof hotds or acquires any interest.
10. C. DUNKIN' DONUTS shall not unreasonably wllhhold itS cons.nt to any Iransf.r referred to in Paragraph 10.B.
ot thil Agreemenl when requested, PrcMded, however:
10. C.l. II FRANCHISEE is an IndMdual or pannershlp and d.Slres to assign and transfer this AQreemenl to 8
corpcnbon:
L Said transfer.. COtPQfatlOJ1 shaU be newty organized and its Charter IhaII pfOVlda that ItS aC1Mtin are
confined .xclUSiVeIy to op.ratlng DUNKIN' DONUTS shops .1 IlCensed undlJ this Agreement.
b. FRANCHISEE or, II FRANCHISEE is a partnershIp, the partn.rs licensed herein to operate the franchise
shall be the owner or owners of the mB/OnIy slock interesl 01 the transler.. corporatIOn.
c, FRANCHISEE or. If FRANCHISEE Is a partnershIp, one of Ihe partners licensed herein to operate the
tranchls. shall be th. pnnopal ellecubv. ottlCer ollhe corporatIOn.
d. Th. Iransleree cOfpQfatlOn and an Ihar.hOIders of transferee corporatIOn shall enter into a wntten
8SIIQIVMOt. und.r seal, In a fann sausladOry 10 DUNKIN' DONUTS, WIth th. ll'ansfer" corporatIOn assurrung all of thl
FRANCHISEeS obligabons und.r tnl' Agreement.
.. AlllharehOkS.rs of th.lransf..... corporatIOn shaD ent.r inlO I wnnen agreement. in a form I81lIfadory
to DUNKIN' DONUTS, ;oinUy and severa1ly guarantHtng the full paymenl and p.rtonnance of the transfer" corporatIOn'.
obliQatiOnllO DUNKIN' DONUTS.
I. Each stOCK certlliCBte of Ihe transferee corporalion shall have conSPlCUOUsly.ndorHd upon It a stalement
thai it II held sublect ta, and that lurther aSSIgnment or Iransfer Ihereof is subtlCl to. all reslnCbOns imposed upon transfers
by INs AgrHment; and
g. No new shares of common or pr.ferr.d votlng slock in th. transf.ree corporatiOn shall be issued to any
person. personl. partnership, assoaa1lon Of corporatIOn WIthOut obtalnang DUNKIN' DONUTS' priofwnttan cons.nt, which
shall not unreasonably b. WIthheld.
10, C.2. II a transfer. aIon. or logeth.r WIth Oth.r pr8VlOUS, simultaneous or proposed translert, wnether rNtld or T,...., 01
unrlilted, WOlid have lhe ."eel of lranslemng an Int.r.sl of fIfty percenl(5O%) or more In the franchlH lcenled htflln, CDntraI
Of the entity holding such franchis., to someone other than an original SicJn810ry of Ints Agreement:
a, Th. lranslerH and .ach Dartner and shar.h06der 01 transfe.... musl be a Unded Stat.s CItiZen or tIWfuI
resident aIi.n of the Unlted Stain and shall be of gOOd morat charact.r and reputabOn and IhaJI have. QOOd cred1l rating
and bUII'\ftSI QuallhcatlonS r.asonably acc.ptabl. to DUNKIN' DONUTS. Such QUlktiCatiOns includ.. wrthout 1mtIbOn.
htlJlty and ftuency ,n tne EngIllh Ianguag. luffiCIent,ln the good faith opnon of DUNKIN' DONUTS, 10 communiClleWtU1
emQlC.r,n. customers. and luppIItrI of DUNKIN' DONUTS and 10 satlstactonly complet. trIlfVIQ 81 OOU, FRANCHlSEE
Sh8II provtd. DUNKIN' DONUTS WIth IUCh intormabon as DUNKIN' DONUTS may require to make such dltermtnltion
CQ lC*. ';'lQ each such ClfOPOsed Iransf.....;
b. Th. Iransfer.. musl dlSlQnal. two managers lor the DUNKIN' DONUTS SHOP, on. of whom mull be
a tranlfertl or I partner or lharehOtder of Ih. transferee. Plioi' to Ih. transfer, bOth rnanaQIf1I must lucceutuay compfetI
the DUNKIN' DONUTS Irllr'lng cours. then In .fleel fOf franchisees;
8
.0. .
Co Th._,IncluQnQ.._lU1d_oflha_,.....~and--'Y......,
an DUNKIN' DONUTS' _.....nt lanni, a FranchII AQr_ and..., otha,._ 0I1ClIIty ~ lncIudInQ
__a_paymonl_, 1000000000000', wolh DUNKIN' DONUTS. Tho _in paymont IQ!_~
WIll prcMdI, In'IOf'IQ other things. thai if tne tranIferH il unable at any blne 10 mak, PlymentllO lhe tranIfefot for U\I
__ 011110 DUNKIN' DONUTS SHOP lU1d 10 DUNKIN' DONUTS and/or III ,0!Ul .ubIldlaIy undlf 111. F_
AQl",,,,~ and Lana, """"""""10 DUNKIN' DONUTS,Iha Funcl,lU1d DUNKIN' DONUTS' ,.......-v........
prIOr1Iy, WlIh fOIIlId 10 1110 IIlon currant Franchl_ AQroomonl. no groater __ 01 Iha GROSS SALES 1IIIn...
raquiIarl by P...gropn. 4.E.lU1d 4.F. .1lalI b. roq..r",
d. The tranIftrot. and aIIlndMduals proposIf'IQ to transfer an internt in the franchlM, IhaII.r.ecutll gtrWII
,_ under 1111 01 111 c:tIlI11Iagllnlt DUNKIN' DONUTS lU1d a pllOl11y In payment a_... " 0IlIliiC0I>I..
eo UnInIllOnQlI penod i._greed upon by DUNKIN' DONUTS and tntttanafetH,lhetermot tn. Fl'II1Ctde
AQrHmtnt required PUtluant thiI subparagraph shall be for the unexpired term 01 this Agreement. EAcept in the tnItInce
lhIIa perIOd tonger than the unexpired term at thil Agreemenl i. agreed upon by DUNKIN' DONUTS. trlf\lferH IhIII pI'f
no INIT1AL FRANCHISE FEE u pr...... in POIIQraph 4. ollhi. AQr.om.nt.
I. If transferee il a COfPOl'abon:
(1) EIch stock certificate of the transf,r.. corporatIOn shad have contpiCuCluaty endorMd upon It .
ItIlImtnt that it II held lubttd to. and that furthe, IISIQnment or I1BnSfer thlfeOf is aubilCt 10, a1I rntnctionl impOUd upon
_bylhl.AQr_
(2) No now.twoaot common 0' prolorrarl VOIlng IIDCI<1n IIl.1fInI1areo corpoIOtion IhIlI ba -lOont
-. _ parlnar1hIp, ....,..11Ian or _ wrthClUt obllining DUNKIN' DONUTS' _ wn1Ion CIlI\IOIIl: lU1d
(3) AIIIharthddIf1 of the tranIfereI corpoIOtion IhaII ant., into . wntten Igreement, in aronn . '" tAr "::l ~ 'i
10 DUNKIN' DONUTS, jointly and......uy gUlltlltoalng 111. .. paymont lU1d porfonnanCII 011110 _ o..flOo-",
olllIo".6.lIlO DUNKIN' DONUTS.
g. FRANCHISEE.hIII have fully paid and ....l1arl1l1 01 FRANCHISEE'. obliQatianslO DUNKIN' DONUTS,
\ha Fund,lU1d DUNKIN' DONUTS' 1Inta1 .ubtidialy lU1d DUNKIN' DONUTS _have baen JlOld a Tronlfar Fit oqUllIO
Iha glllllfot Four ThouIancl DoiIIrt (14,000.001, iner..... bya%compoundodannulllly.uring tho l.rmotIhltAQr_
and any renewal pened, or.
(1) 5% of the AdjUsted Salel Price at the DUNKIN' DONUTS SHOP if the sale takes p!ace WIthin three (3)
yen aftel tM dall) on whICh FRANCHISEE opened the SHOP to the pUbliC (as a new ShOp), or the date on whiCh
FRANCHISEE acqUUed the SHOP (as a prlMOUliy operated ShOp): or
(2) 3% 01 Iha Adjull" SIIH Pnca 01 111. DUNKIN' DONUTS SHOP illl10 ulalaklt placo aftarlhrea (3)
yon Inlm Iha .... on _ FRANCHISEE _ IIla SHOP 10 111. publiC (U . now 'hOp), 0' IIla data an _
FRANCHISEE acquirarl 111. SHOP (u a p_ _.. .IIPpI,
The Ad)Usted Sales Price shall inctude, wrthDullimitaUon, cuh. assumption of debt, equipment Ie..
obiIgItions, and deferred Iinlll"lClng and amountslllocated to property 01 8V8fY kind. nature and deacnption: furnibn.
flxturn. 1qII, eQUipment. lupplln and inventory; exdudlnQ only amounts r.asonabIy allocated to land and building If
ownarl by FRANCHISEE. I' illnllnd..lhat III con....rolion '0 bo p...'o FRANCHISEE, 0' for 111. bonarl 01 FRANCHISEE.
haMIwr d'SlQnated and whetner or not Inctuded m the Contract of Sale shall be deemed part of Ihe Adjusted SalII Price
Inc::tuding, but not by way of limitation, amounts allocated to a covenant not: to compe1e or plt1OO8l service agrHmInL
The Adjusted Sales Price shall be the Sales Poe. to be r8C8lVed by FRANCHISEE upon transfer of the
DUNKIN' DONUTS SHOPls..IIl.amoun, p... byFRANCHISEE lor'ho DUNKIN' DONUTS SHOPllpurch....lnlmanolhor
franchisee or from DUNKIN' CONUTS as a prl'YlOUsIy operaled shop. No adjustment snau be made for amounts paid In
connection WIth the develOpment of a new CUNICN' DONUTS shop.
DUNKIN' CONUTS wiU W8Mt the tive percent (5%) Of three percent (3") tee but not the fixed fee ofSA.OOO
(subject to increase) In CQMldlon WIth transfer of the DUNKIN' DONUTS SHOP to FRANCHISEE'S spouse or one or more
01 FRANCHISEE'S chil.ron plO'lld" ..... in DUNKIN' DONUTS' good IIl1h Oplnion, FRANCHISEE hu bHn In fuR
compIiInCe WIth Ihe terms 01 all agreements With DUNKIN' DONUTS and Its rental subSidiary. However, Ihe Franc:hln
Agreement luued to Ihe spouse andlOf children WtII be on Ihe then cunent fotm In use al the time ot transfer Including the
then cunent Transfer Fee prcMSlQM.
FOf' purposes ot determining the cooed Transfer Fee, DUNICN' DONUTS reserves the nghl to reallocate
amounts which FRANCHISEE andthelransleree have a1locatedtolanct, buddinO, eqUIpment, covenanllg&lnl1 competJtlon,
plflOnlllHMC8 agreement, or oth8fWlse II. in the good laith OPInIOn 01 DUNKIN' DONUTS. the a/k)CQIion of the partin It
unreuonabll in relabon 10 the value at Ihe franchrsed bUSiness. If CUNICN' DONUTS pUrd'1as8lthe DUNKIN' DONUTS
SHOP tram FRANCHISEE by eX8fClle or rts right of tim refusal under subparagraph 10.F. hereof. the Trana:fer Feelhlll
ba poyIbI. by FRANCHISEE 10 DUNKIN' DONUTS u I FRANCHISEE hid IOklIha lronchIsad bUlinou I. alhird P""f,
h. Upon complianc. ..Ih IIla aroroSlld condlllons an. DUNKIN' DONUTS' Illl>fOYIi 01 Iha _.
FRANCHISEE and any snarehOlders or partnlf'l partiCIpating In laid transfer shall, to the extent 01 the Interest ID Ulnlferred,
lhIreupon be relieved 01 further obligatlOnl under Ihe lerms of this Agreement except that FRANCHISEE and any former
sharehoIden or panner1 at FRANCHISEE shall remaJn obligated lor FRANCHISEE's money obilQltlDnS under Paragraph
4..1hrougI'I tne dale of sale, and under the restncbve covenants contained in Paraoraph 8., ~er the dale 01 sail.
10, C.3. If a translerwouSd have the eflectat transtemng an interest 01 IOfty-nlne percent (49%) or less in the IranctUe
UcInIed herein. or the entity holding such franchise, 10 someone other than an original signatory of IhiI Agreement
L The tranIIeree and laen paMer and sharehOlder 01 transferee must be. United States ctiztn or lIwlul
rnIdent alien of the Unrted Slain and shall be 01 QDOct moral ctwacter and reputation and snaa have. good credit rwting
lU1d buslnou qulI"ic.lions 'Ouonably occaptabl.,o DUNKIN' DONUTS. FRANCHISEE shall pfllYi<l. DUNKIN' DONUTS
'MIh sUCh lnformabon u DUNKIN' DONUTS may require 10 make such dRlermlnabOn concemng .ach sUCh propDIId
-...;
b, The transferee must designate two managers lor the DUNICN' DONUTS SHOP, one 01 whom mUll be
a transferee or a partner or sh81eholder ot the transfer... PliQr to tne transf.r. both managerl must successfully cornpllll
1hI DUNKIN' DONUTS training course then in effect for frandVsets;
Co Tha_...,lnclucllng lI1.hIre_a..lU1d panno.. ollh.IranIt.....lhIlIjolntly lU1d'I'IOIlIily'_
... AQrHmtnt lU1d ..., oIhar IIIndatd 0t1CIl1aIy OQraomont, inclucllng """""' Ilmll1ion . pIlOI11y paymonlllQflOlllOl1l. "
_, WlIh DUNKIN' DONUTS. Th.pllOl11ylnpaymont agroomont"'" ofllYi<l., among oIharllllngs,lhat "IIla_
il unable at any bmeto make payments 10 tne transferor for Ihe purchase of the DUNKIN' DONUTS SHOP and to DUNKIN'
DONUTS and/or Itt rentaa subsdary under Ihe Franc:Nse Agreement and Lelle, that paymenlllo DUNKIN' DONUTS, the
Fund,lI1ll DUNKIN' DONUTS' rontal .uti.......,... have pllOl11y.
d. Thelransf8fQl and alllncJlVlduats PfOt)OSlng to transfer an mterest In the franchise, shaII.xecute a g8f*al
rllelll under II. of .. daamt &galnst DUNKIN' DONUTS and a pnonty ,n payment agreement. If appllCabte,
e. If lransferee IS a corporatIOn:
T_ ....
Saa Adda.dUll
lD.C.2.g.
pi]
T_oI Lau
'TItan Conlnll
9
(1) Ead1._ carllficala 011110 IIanIIorM c:orpor-. _ ha>o CClf\ICllC>"'" .- upon I a
_IhaIMI.hald_IO,lU1dlhalfUrthar_orlflnllar___Ill,III__UIlIlII
_by,...AQ,.......n1;
(2) No"!W that" of corM'IOO 01 prlfetrtd YOtl/'lQ 'lode ,n me tranll.,.. corpol'lbon ,hall be I"ued 10 any
ptf'IOf1. pefWON, paMtfIIlIp, UlOQIlIOn Of corpotabon WtlhOu'! OblIInlng DUNKIN' DONUTS' PIlOt wotte" conHnI; and
(3) A11lhartho1cStr1 01 the tranl"'" corporabQn lhaII.rter,ntO I wnaen agreement. In . form ~
to DUNKIN' DONUTS, joonIly and._ gUIIInI"'flQ 1110 fUU poymonllU1d _ 01 'ha irani,"," POlpo._",
0IlIIgat0II1O DUNKIN' DONUTS.
r. Upon comptlance wofn the al0f8tald condItiOn, and DUNKIN' DONUTS' approval at the trana"'.
FRANCHISEE and any lnat'hoId"l Of' partne,. PlltJaPl1lnQ In laid transl" 1hIJI, 10 tne Ixtent of tnl interest 10 tranlllfTld.
Ihtreupon be relieved 01 furth', obftOallonl under tn. terms at thl, Ag'"mlnt. ..cept thai FRANCHiSeE and any Ionner
_.. 0' p.""a.. 01 FRANCHISEE ,hll """"n OCI>gaIodlor FRANCHISEE'. manev oblJOat>CnI undlf PIIOQfOIlh
.., ttvough Ihe dale 0111I'. and under the r"~IV' covenanll COntalned tn PltlQfaph 8.. after th, dati of tal..
10. D. In the event of tn. death 01 FRANCHISEE. Of any partner Of ,halenolde' thet'eola' any time dUMQ thl'eRn Trant'" on
of this Agreement. tnl leo- flpr"lnllllY, 0' FRANCHISEE. partner or trwlhc:lider. toottner WIth all IUMVInQ paMlrI or 0Hth
anareholders.l' any. JOIntly. shalt. Wllhln Ihree (31 month,of such event applv. in WnbOQ. forth. nghllO lr&nllll In. franctMI.
Ofthltnterll1 oflhedeceuld plltn,r or Shareholder In such 'ranchlse, (osuch P'fIOn Of perlOnlll th.llOI6reprnentaaye
may .pocdy. SUChl1ano11f IIlalI ba approv.. by DUNKIN' DONUTS upon 'h.lulfdlrnen' 0111I 01 111. condrtJOn. lit ""'" In
Paragrapn 10.C.2. or10.C,3,lu applICable) of thIS Agreement, .lCIp!: that no Iransfer fll .hall be reqUlfed" thlltanlferN
II. ber\eIldri or hetr 01 FRANCHISEE,
10, E.1l1l101oQal'....-andlll.UMW1Qpanno..or._,ot...,,.OnolcomIllYWlthIl1o_
pIOViIIont 01 POfIQraph 10. or dO not_nllan.,or" accaptablalll DUNKIN' DONUTS undar 1110'_ lit ""'"
"' ParaQrap/110.C.2, and 10.C.3.,III fIQhIa 1_11010 FRANCHISEE under ,... ~ .I1II'a_._lU1d
0UIIlmIlk:IIIy flYort '0 DUNKIN' DONUTS. DUNKIN' DONUTS .1lalI ha>o 111. I1QnI and PpIIOn, o..'<I_a upon -.
1In'nIndon.IO pwchulll furniture, fiXtlnl. lions. equlpmemandothlf chalIetI It. pricllO ~ egreed upon by the PdII
or, tf no agreement as to pnce il reldled by tne partllI. It .ucn PriCe as may be detennmed by . qualined &pprIlIIt,
apprCMd by both partin, luch apPfOYll not to bo u~reuonably WIthheld. DUNKIN' DONUTS IhIII orve neuee a. iIIlnItnt
to ..'rdleHid option no laler tnan twenty-one (2t) days pnDf to termination.
to, F, II FRANCHISEE, or any sharehOlder or partner Ihereat, has rIC1lV1d and deSire, 10 accept aligned. bona lid, Right a. Flr.t
wntIen offer from. Ih,1d party 10 purenase FRANCHISEE'slrMenIS8 or sharehOlder's or partner I Interest In the frlnd...." RlruN'
FRANCHISEE or lucn sharehOlder or paMer shall notify and prOVIde DUNKIN' DONUTS Wllh I copy 01 .UCh otIer. and
DUNKIN' DONUTS .haJJ have the nght and OptIOn. exlfOSable WIthin lorty.frye (45) days after itl r8Celpt ot a copy of the
off. to purchase FRANCHISEE'S (ranctue, or.ucn .harehOlder" at panner', int".st In the frenchlH, on the same terma
lU1d_ nollafldbyl8ldlhird P""f. DUNKIN' DONUTS' ..orCII. 01 III IIQht '0 p_ FRANCHISEE'._
_arlllall noI ,lIiava FRANCHISEE 0111I 1ranI1., '" ~ '0 DUNKIN' DONUTS under PIIOQfOPIl 10.C.2.g,
Should DUNKIN' DONUTS not IXIfd.. II1is optlon and Ih. 'Irm. 01 111. unaccalll" oftor be ..,...., DUNKIN' DONUTS
&hall. In .ach instance, be notified a. the chanQtd 0"1t and IhaD IQ8In nave forty. five (45) dlVllO purchase on lhe a1t1tld
terms, Shoukt DUNKIN' DONUTS nOI exerciselhis option, Ihe lenns 01 Paragraph 10.C.2, and 1 0,C.3.181 applicabl.) shal
appty to any transf,r whiCh may be conttmplaltd,
11. A. This Agreement does nol constrtute FRANCHISEE an 8Qenl, legal reprllentabve, joint venturer, pltlner. ReI8tIonahlp o.
employee or SlNant of DUNKIN' DONUTS or Its subsidiary for any purpose Whatsoever: and It is deemed understood p.un
between the pat1les hereto lhat FRANCHISEE shall be an Independent contractor and is in no way luthorized to make any
contracI, agreement, warranty or representatIOn on behalf of DUNKIN' DONUTS or lIS subSidiary or to aeate any Obligabon,
expntll or Implied, on behaJI 01 DUNKIN' DONUTS or liS SUbsidiary. The parties agree that this Agreement does not create
a lidudary retabonlhlp beflNeen DUNKIN' DONUTS or lis subSidiary and FRANCHISEE,
11. B, Under no circumstances shaU DUNKIN' DONUTS or FRANCHISEE be habl,'or any act. Omission, debtor Il'rf
D1het obligation of Ihe other. Each party snau Indemnify and save the other hatmlen agllOSt any such c:tam and the COlt
of defending aQ81nst such Claims arising directly or indIrectly from, or as a result of. or in connec1iOn with. FRANCHISEE'I
oparotion 01 'ha DUNKIN' DONUTS SHOP.
12. No failure of OUNKlN' DONUTS to exeras. any power reseNed to It hereunder, or to Insist upon Iltict compliance Non-WIlvIr
by FRANCHISEE WIth any obligation or condition hereunder. and no custom or Practice a. Ihe partles In variance WIth the
lenns hereof, shall constrtUl' a W8lV8l' of DUNKIN' DONUTS' right to demand striCt compliance WIth Ihe terms hereof, WIivet
by DUNKIN' DONUTS 01 any partiCUlar default by FRANCHISEE shall nolatf&Ct or impair DUNKIN' DONUTS' righl In resped
10anyaubaeQuentdefaun ollhe samearol 8tMer,nlnature: nonhall anydelav, WaIVer, forbearance orClmlsltOnot DUNKIN'
DONUTS 10 .xercsst any power or nghts anSlng out 0' arrv breach or delaullby FRANCHISEE of any otthtlerms. provilionl
or covenants hereof affect or ImOllr DUNKIN' DONUTS' rights, nor IhaIISum constrtute I wlllVer by DUNKIN' DONUTS of
any right hereunder or 0' the nght to d8dar' any subSequent bfeld'l or d,fault. Subnquent acceotance by OUNKIN'
DONUTS 01 the payments due to II hereunder shall not be deemed to b. a waiver by DUNKIN' DONUTS 0' any preceding
br.ach by FRANCHISEE 01 My IIrma, covonants or con...on. oll'" AlI''''''ont. Accoptanca by DUNKIN' DONUTS ol
paymentsdueit h.reunderfrcm any person or.ntttyolher lhan FRANCHISEE shall be dHmed to be acceptanCe rromlud1
pet'IOn or enlrty al an agent ot FRANCHISEE ana not as recognrbon at luch person or entity as an asSlQnee or luccnsor
10 FRANCHISEE.
13. All noticeS hereunder by DUNKIN' DONUTS 10 FRANCHISEE shall It OUNKlN' DONUTS' OptiOn be personalty Notk:n
delivered or lent by tellCOC)ler, or prepaid private co,,"er, or certified mill to the FRANCHISEE at the addren let fonh bIkJw
or at IUCh othlt address II FRANCHISEE may from time to time OlVe notlCI otto DUNKIN' DONUTS, AI noticeI nereundtr
by FRANCHISEE '0 DUNKIN' DONUTS ,hall ba IIn,by cortJhod """I to DUNKIN' DONUTS INCORPORATED, Poll 0tII0a
Box 317, RandolPh, MassecnU181lS 02368. Ann: SeOlOf VICe Presidenl Ind General Counsel or at such other Idd,... u
DUNKIN' DONUTS m.., lrom tuno '0 tun. gl'/l nobCI of 10 FRANCHISEE.
To FRANCHISEE: w. John Chestnut, c/o Dunkin' Donuts, 1186 Hlrrisbura Pika,
Carliale, Pennsylvania 17013
1., A. This Agreement. and the documenls referred 10 her"n shall bethe entire. lull andcomptell agreement beIWIIn EntIrw
DUNKIN' DONUTS and FRANCHISEE concerning the subject matter hereof. and supersedtl all prior aoreemetltl, no other AgrHmInt
repralf'l1ltiQn hawlg Induced FRANCHISEE to extculelhlS Agreement; and there 81e no rtpfnentaliOnl. inducementl,
prormn Of' agreements, oral or othetwtse. between the paruu not embodied heretn. whiCh ere of any ton:e or etfect With
retwenc:elott1lsAgreementorolhefwilt. Noemendment. change orvanance tromthls~lhdbebindlnQonlither
pany unIl11 executed In wntIng.
14, B. The .uccess of the bUSiness ventufe contemplaled 10 b. undl1laXen by FRANCHISEE by virtue or tNI
Agreement IS IpeaJlalNllnd dependS, to a laroe .X1enl, upon Ihe.bdltyot FRANCHISEE as an independent bulinlUman.
as wetI as othlt' 'IClOrs. DUNKIN' DONUTS does not make any representations or warranty u 10 thl poIentiIIlUCCISI of
IhI business ventura contemplated hereby. FRANCHISEE aCkl'lOWtedQlS thai" has entered Into thil ~ after
maIdng an independentlnvest)ga1lOn otDUNKlN' DONUTS' OperabOnS. and nDC UDOn any reptfttntabDn u 10 ptOftIswNctl
FRANCHISEE in partICUlar might be expected 10 rllll.1:" nor nlS anyone made any Other representatiOn whiCh ts noc
exprns/y lit forth herlln, to Induce FRANCHISEE to accept thiS tranchtlt and exlO.lle thls Agreement
'0
. -. -. J "oJ - - .
... ......,.... -'...11....1"'.'... ......."..... .."......:;, W', --..... -. .... ,...........-")......" ..-......... ..... "-'. .
'fho undorslgn&d,lDlnby and severally, agree that DUNKIN' DONUTS may, without nDtic,tD or consant 01 the under.
signed, (al. extend, in whole Dr in part, the lime for payment of tha corporation's money obllgallDns under Paragraph
4; (b) modify, With the consent 01 the corporation, its money Dr other obligations hereunder: and/or Ie) eeWe, waive
or compromise any claim of DUNKIN' DONUTS against FRANCHISEE Dr any of the unde..lgned, all without In any way
affecting the personal guarantee of the undersigned.
This Guarantee is Intended to take effect as a ;e~ed instrument.
Sign in the presen 01;
Individually
Witness a;;~all
/
Witness Individually
Witness Individually
Witness Indlvldually ..............-..
t2
-....wl'-'UIQUiIlIUUIIO,
~
CHESTNUT ENTERPRISES, INC.
The undersigned hereby certifies that he Is the duly elected and acting secretary of the above namec:f
corporation and keeper of the official records and corporate seal of said corporation, and that the,
o. ""
following Is a true and correct copy of the resolutions adopted by the Board of Directors of said . .
corporation at a meeting duly held on the 8.)' day of -f;i ~I ~ ' 19..&
at which meeting a quorum was present and acting throughout and that such resolutions have not been
rescinded or modified and are now In full force and effect:
"RESOLVED, that this corporation enter Into the following
agreement or agreements with DUNKIN' DONUTS
INCORPORATED or affiliates or subsidiaries thereof:
Termination of Franchiee ARreement, Franchise
Agreement, General Release, Lease ODtion ARree-
ment, DCP Commitment Form
,
FURTHER RESOLVED, that anyone of the officers of the
corporation Is authorized and directed to execute said agree-
mants on behalf of this corporation, and to approve any
modifications. extensions. amendments or terminations of
said agreements as any said olllcer may deem to be In the best
Interests of the corporation, notwithstanding the fact that such
documents as amended, modified, terminated or extended
may differ from those presented at this meeting,"
I further certify that there Is no provision In the Charter or By-Laws of said corporation limiting the
power of the Board of Directors to adopt the foregoing resolutions. and that the same are In conformity
with the provisions of said Charter and By-Laws,
I further certify that the following are the names and olllclal signatures of the present officers of said
corporation,
Shirley M. Chestnut
Shirley M. Chestnut
Secretary
Print or Type Name
W. John Chestnut
President
John Douglas Chestnut
Vice President
Treasurer
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WHEREAS, CHESTNUT ENTERPRISES, INC., hereinafter referred to as
"FRANCHISEE", and DUNKIN' DONUTS INCORPORATED, hereinafter referred to as
"DUNKIN' DONUTS", have entered a Franchise Agreement under which FRANCHISEE
operates a DUNKIN' DONUTS shop at 1186 Harrisburg Pike, Carlisle, Middlesex Township,
Cumberland County, Pennsylvania, and also a DUNKIN' DONUTS shop at 930 Walnut Bottom
Road, Carlisle, South Middleton Township, Cumberland County, Pennsylvania; and
WHEREAS, the parties to this Addendum are aware that FRANCHISEE shall also
S ~ ?;~
operate at the same premises a separate business designated "JERRY'S SUB SIIOr", with the
consent of DUNKIN' DONUTS;
NOW, THEREFORE, IT IS AGREED by and between the parties that:
1, Notwithstanding the terms of the aforesaid Franchise Agreement, and any
documents accompanying or relating thereto, FRANCHISEE shall have the right to operate a
separate food sales establishment at 930 Walnut Bottom Road, Carlisle, South Middleton
Township, Cumberland County, Pennsylvania, without violating any of the aforesaid Agreements;
and
2, The aforesaid Franchise Agreement and accompanying or related Agreements
are hereby reaffirmed to the extent not inconsistent with this addendum.
I
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4868\50/052892
ADDENDUM TO DUNKIN' DONUTS FRANCHISE AGREEMENT
FOR A SATELLITE UNIT (the "DUNKIN' DONUTS SHOP")
EXHIBIT B
PIC Jtai
Type 01 Unrt: X Satellite Cart Klosk
Dlte01 Franc:::greement: 7 ~ Il,.93
~
FranChls..: CHFSTNUT ENTERPRISES , INC
Olher:
Addendum to Introduction: The Producing Unit
Products sold It the DUNKlN' DONUTS SHOP shall be produced In the DUNKlN' DONUTS Shop owned by
FRANCHISEE (or, " applicable, the partners or shareholdera of FRANCHISEE) located at
J 1 A,:; f,hn.,..ofahtt,.'l Pi"'A t"!.Q1'"1iAlo. PA PIC .3695 (the -Producing Unir). except as
DUnkin' DonUls may otherwise authorIZe end direct In wrlling,
1
Addendum l,A.: Term
Within the second semence of Paragraph l,A, 01 the Franchise Agreemem, "twenly (20) years' Is hereby deleled
and 'en (to) years' Is hereby inserted In Its place,
Addendum 4,D,: Gtlnd Opening Promollon.el Progtlm (Applicable only to Cart Systems)
lithe DUNKIN' DONUTS SHOP Is I Cart System, the words "Thrle Thousand Dollars ($3,000,00)' contained in
Subparagraph 4,0, are hereby deleted In their entirely end replaced with 'One Thousand Dollars ($1,000,00)',
Addendum 4.F,: PlrtlclPlllor-ln Dunkin' Donutl Progtlms
The DUNKlN' DONUTS SHOP shall not be Induded In the base 01 DUNICN' DONUTS Shops lor thl purpose 01
determining the number of Shops required to trigger participation In marketing, advertlslng or other programs,
unless Dunkin' Donuts, In lis sole and absolUle dlscrelion, elects to Indude the DUNKlN' DONUTS SHOP In said
base 01 DUNKlN' DONUTS Shops.
FRANCHISEE shall also partlclpate In and make additional payments to thl Fund with respect 10 all advlrtfsfng,
marketing and other DUNKlN' DONUTS programs as Irom time to time atl supported or required to be supponed
by the Produdng Unll.
Addendum 4.0,: Pen:entllge Rlnt
Except u hereinafter.. forth, II FRANCHISEE (or, " applicable, the partnera or sharlholdn of FRANCHISEE)
leases the Producing U~ from DUNICN' DONUTS or its subsidiary, retail sailS made from the DUNICN' DONUTS
SHOP shall not be Included In dllannlnlng percentage rem, " any, u dlllned In lhe Producing Unit's I.....
Wholesale sailS made from the DUNICN' DONUTS SHOP will be deemed 10 be sailS of the Producing Unit and
subject to PERCENTAGE RENT and other charges under the terms of any I.... lor the Producing Unit with
DUNICN' DONUTS or lis subsidiary, In addition and notwithstanding the fontgolng, FRANCHISEE shd pay to
DUNICN' DONUTS or lis sUbsIdiary any PERCENTAGE RENT and other chargll which DUNICN' DONUTS or lis
subsidiary may be requ/rId to pay under any undlrlylng I.... applicable 10 the Producing Unit. because of any
sal11 from the DUNICN' DONUTS SHOP. FRANCHISEE (or, " applicable, the pat1/lII'I or sI1arIhoIc:ters of
FRANCHISEE) shaIIlXlCUle an lmendment 10 the I.... fOl' the Producing Unit In I form IIlIstactory 10 DUNKIN'
DONUTS 01' lis subsidiary lncorpotlllng the foregoing provisions.
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Addlndum 5.: U.. Rlltrlctlon
FRANCHISEE convenants to use Jhe DUNKIN' DONUTS SHOP only as a DUNKIN' DONUTS sales outlet during the
term of this Franchise Agreement. FRANCHISEE may not seNlce wholesale aCcounts or other outlets from the
DUNKIN' DONUTS SHOP,
Addendum 5,C,: Production Ind Tran,pDr1 of Product
The DUNKIN' DONUTS SHOP Is a non.prOduclng DUNKIN' DONUTS sales outlet. Accordingly, FRANCHISEE shall
not. Without the prior written consent of DUNKIN' DONUTS, manufacture or finish any product atthl DUNKIN'
DONUTS SHOP, except as authorized or directed by DUNKIN' DONUTS, DUNKIN' DONUTS reSINe. the right, In
Its SOle and absolute discretion, to require FRANCHISEE to manufacture, In whole or In pan, ard/or to finish etthe
DUNKIN' DONUTS SHOP products now or herealter designated as approved for sale Itthl DUNKIN' DONUTS
SHOP, Products not manufactured at the DUNKIN' DONUTS SHOP shall be manufactured It the Producing Un~
and at no other place unless prior written approval Is granted by DUNKIN' DONUTS,
FRANCHISEE shalltranspon products and supplies from the Producing Un~ to this DUNKIN' DONUTS SHOP on I
SChedule and In I manner acceptable to DUNKIN' DONUTS that ensures compliance with federal. state and local
regulation as well as DUNKIN' DONUTS' quality, treshness and other standards and that an adequate supply of
product Is available for sale,
Addendum 5,J.: Product Ind Vehicle Ulblllty In.urance
FRANCHISEE shall also maintain a policy or policies of product IlabUIty, vehicle IlabUIty, and non-ownad vehicle
IlabUIty Insurance coverages, In the amounts set fonh In Paragraph 5,J, of the Franchise Agreement
Addendum 5,N.: Certain Rlghte of Dunkin' DDnute on rennlnlllon
In the aventthe DUNKIN' DONUTS SHOP's location Is leased or licensed from a third party, FRANCHISEE shall use
its best eltons to secure ~s Landlord's execution of the Lease Option Agreement If FRANCHISEE Is unable 10
obtain ~s landlOrd's execution of the Lease Option Agreement, FRANCHISEE shall execute ard usa ~s bell eltons
to secure Its Landlord's consent (where required) to a collateral assignment of lease, The collateral assignment
shall grant DUNKIN' DONUTS the option to assume the lease or license In the avent of FRANCHISEE'S default
under this Franchise Agraament or the lease or license, If FRANCHISEE Is unable to obtain execution of the Lease
Option Agreement or the collateral asslgnment of 'ease or If DUNKIN' DONUTS, In its SOle and absolute dlleretlon,
waives the requirement for the.. agreements. the following provision shall apply, AI the expiration or termlnatlon of
thle Franchise Agreement, FRANCHISEE shall assign to DUNKIN' DONUTS at its request any lea.. or license for
' the location. FRANCHISEE shall comply with all requirements for notice or consent under such I.... or license
and shall execute documents acceptable to DUNKIN' DONUTS' counsel assigning such I.... or IIcInse to
DUNKIN' DONUTS, DUNKIN' DONUTS' rental payments shall be limited to those sat forth In the assigned I.....
license or other document.
Where the satellite location Is owned or controlled 'In whole or In pan by FRANCHISEE (or the pannera or
shareholders of FRANCHISEE), DUNKIN' DONUTS hae the option, II the 8IIIy termination of lhlI Franchise
Agreement, to I.... the locatlon for the duration of the original term of thla Franchise Agraemenc, DUNKlN~.
DONUTS' rental paymtIU UllrlUnd8I' WUl be equlvaJent to then currant 1lIIIIl81 V8Jue and IhalI be d81ermlnad by
agreement between FRANCHISEE (or the panners or shareholders of FRANCHISEE) and DUNKIN' DONUTS or, If
they fal to agrta, by IIbIlraIlon UIld.. the lUlu of the American Arbltratlon I'ttoclatlon. The 1n18l'1l of the above Is
to prIMrva the DUNKIN' DONUTS SHOP'S location as I DUNKIN' DONUTS saI.. outlet. at DUNKIN' DONUTS'
option, should the FRANCHISEE dafalit under the Franchise Agreement or any CClntI1Ict aflactIng the operation of
the DUNKIN' DONUTS SHOP,
Addendum llA....: Clflult
FRANCHISEE shall he In dafalit under this Fnlnchlsa Agreement If FRANCHISEE (or, If appllcabl., the partn.ra or
shareholders of FRANCHISEE) fall to comply w~h all the requirements Imposed by the Franchise Aglltll'llnt for
the Produclng Unit.
2
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Add.ndum I.A,S.: D"lult
FRANCHisee shall be In delault uilder this Franchise Agreement if the FranChise Agreement for the Producing Unit
Is terminated.
,
Add.ndum I,B.3.: Cure Period
A thirty day cure period shall apply if FRANCHiSee (or, if applicable, the partners or shareholders of FRANCHISEE)
faUs to comply with any 01 the requirements Imposed by the Franchise Agreement for the Producing Unit.
Addendum I.B.4: No Cure Period
No cure period shall be available if the Franchise Agreement lor the Producing Unit Is terminated,
Addendum I.F,S,: Dunkin' Donuts' Option to Purch..e Csrt System
It the DUNKIN' DONUTS ,SHOP Is a Cart System, at the expiration or sconer termination of this Franchise
Agreement or before FRANCHiSee accepts a bona lide written offer to purchase the Can System Independent of
this franchise, DUNKIN' DONUTS shall have the option to purchase the Can System !rem the FRANCHISEE for an
amount equal to the original cost 01 the Cart System (Including freight and sales tall) less 1,67% thereat lor each
month the Cart System has been In operation. DUNKIN' DONUTS may deduct Irom this payment any amount due
DUNKIN' DONUTS from FRANCHISEE. II DUNKIN' DONUTS exercises the foregoing option, FRANCHISEE shall
promptly deliver and convey to DUNKIN' DONUTS marketable tlUe to the Can System Ir.. and clear of all liens and
encumbrances. on payment of the amount determined In the manner descrtbed above.
FRANCHISEE shall promptly notify DUNKIN' DONUTS and provide DUNKIN' DONUTS wJth'. copy of any offer to
purchase the Cart SyS1em Independent of this franchise which FRANCHISEE d8llrn to accept. DUNKIN' DONUTS
shall have lorty.flve (4S) days within which to exercise DUNKIN' DONUTS' purchase option hereunder. Should
DUNKIN' DONUTS not exercise this option and the terms of the unaccepted offer be altered. DUNKIN' DONUTS
shall, In each InSlance, be notified of this changed oller and shall again, have forty.flve (45) days to purchase on the
altered terms. Should DUNKIN' DONUTS not excerclse this option, the terms 01 Paragraphll0.C.2. and 10,C,3.,
Including the Addenda ther810 (as applicable). shall apply to any transfer which may be contemplated,
At the expiration or sooner termination of this Franchise Agreement, II DUNKIN' DONUTS elects not to purchase
the Cart System, FRANCHISEE shall promptly deldentlfy the Can System In the following manner: remove the
canopy and canopy structures. ramove and destroy all DUNKIN' DONUTS tractemarlca. servlce marks, trade
names. advertising, commercial symbols. product labelling systems, sign faces. display trays and other Items
which DUNKIN' DONUTS reasonably requires be removed as being distinctive and IndlcatJve of the DUNKIN'
DONUTS SYSTEM, and change the color scheme so that It does not conform to the then current DUNKIN'
DONUTS color scheme. DUNKIN' DONUTS may enter upon the premlses whirl the Can System Is located
without being guilty 01 lrIspass or tOlt to 81tect such dll-identltJcallon It FRANCHISEE tab to lIlfec:t such de-
Identlflcatlon wIlhIn tin (10) days after the termlnatJon of the Franchise Agrwment. FRANCHISEE shall pay
DUNKIN' DONUTS the rauonabl. costs and expenses In effecting such dll-identlflcatlon wtthIn ten (10) days of
FRANCHISEE'S rlCllpl 01 DUNKIN' DONUTS' wrlt1en request
Addendum 10.C.2.: Tralllfer of th. Salenlt. Unit
If . transfer. alone or tllQllher wllh CIlhar previous, simultaneous or propoeed transfara, wIlIlhar related or
unrelated, would have the effect 01 transfllTlng an Interast of IltIy percent (SO%) or more 01 the tranc:hIse 01 the
DUNKIN' DONUTS SHOP or the entlty holding such franchise, to IIClIn8ClM ather than an or\glnalllgnatoly 01 this
Franchise Agflllllllnt, th. following pravtslons shall spply, The proposed lranIferH must satisfy DUNKIN'
DONUTS' then curtlII1t mWtklnll owner guldellnll, have owner.hlp InlInIIt In . tuU producing DUNKIN' DONUTS
Unlst the time 01 transfer (and continUOUSly ther8llller during the tenn of the transftne'. Franchise Agraamant for
the DUNKIN' DONUTS SHOp) which DUNKIN' DONUTS, In Its sole and absolute dlscrwtJon. llUIhorluI as the
ProducflY,l Unit for the DUNKIN' DONUTS SHOP,
3,
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Addendum 10,C.2.: Transfer of \he Producing Unit
If a transfer, alone or together- with other previous, simultaneous or proposed transfers, whether related or
unrelated, would have the effect of transferrtng an Interest of fifty percent (SO") or more 01 the franchlseUcensld by.
the Franchise Agreement for the Producing Unit, or the entily holding such franchise, to someone ollllr than an
original signatory of the Franchise Agreement for the Producing Un~, such transferee must 8110 qualIfy es a
transferee of the DUNKIN' DONUTS SHOP and purchase an equivalent Interest In the franchise for the DUNKIN'
DONUTS SHOP, FRANCHISEE and the partners or shareholders thereof shall execute an amendment to the
Franchise Agreement for the Producing Unit In a form satisfactory to DUNKIN' DONUTS which Incorporates the
foregoing provisions.
Addendum 10,C.2.g.: Transfer Fee (Applicable only to Cart Systems)
" the DUNKIN' DONUTS SHOP Is a Cart System, 'Four Thousand Dollars ($4,000,00)' Is hereby deleted from
Paragraph to,C,2.g, of the Franchise Agreement each Instance ~ appears, and 'One Thousand DoIlarI ($1,000,00)'
Is hereby Inserted In place thereof,
Addendum 10.E. (Applicable only to Cart Systems) ,
If the DUNKIN' DONUTS SHOP Is a Cart System, the second sentence 01 Subparagraph 10,E. Is hereby deleted In
hs entirety and the following Is Inserted In hs place: 'DUNKlN' DONUTS shall have the rtght and optJon, exercisable
upon such termination, to purchase the Cart System from the FRANCHISEE for an amount equal to the ortglnal
COlt of the Cart System (Including freight and sales taX) less 1,67" thereat for each month the Can System has
been In operation, DUNKIN' DONUTS may deduct from this payment any amount due DUNKIN' DONUTS from
FRANCHISEE. "DUNKIN' DONUTS exercises the foregoing option, FRANCHISEE shall promptly dellvll' and
convey to DUNKIN' DONUTS marketable title to the Cart System free and clear of allllena and encumbrances, on
payment of the amount determined In the manner described above,'
.
Miscellaneous
In aU other respects. except as specifically modified herein, the partlas do hereby ratify and aff1rm the terms of the
Franchise Agreement.
The Addendum Is attached to and made a part of the Franchise Agreement.
DUNKIN' DONUTS INCORPORATED
BY~~
Davtd B, Reller
Dlredor 01 Development & OrIeralkllllt
FRANCHISEE CHESTNUT ENTE1fiiRIS1:!f. INC.
4
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_ DUNKIN' DONUTS INCORPORATED
ACKNOWLEDGMENT OF RECEIPT BY PROSPECTIVE FRANCHISE OWNER
OF INFORMATION FOR PROSPECTIVE FRANCHISE OWNERS ABOUT
FRANCHISE SALES AND PROFITS REQUIRED BY THE
FEDERAl. TRADE COMMISSION
The Undersigned. pIIrsona1ly and/or as a duly authorized oIl1car or pe.nnar 01 the proposed FranchlM Owner,
does hereby acknowledge racalpt (at the first pIIrsona1 meeUng with FranchIaor's representative but not IItll'
than ten '(10) buslness days before the slgnlng 01 any Franchise or reIatad Agreement or payment 01 any
money) of 'Inlormation For prospectJve FranchIse Owners About FranchIse Sales and Profits RequIred by ItI8
Federal Trade CommIssion' (RegDl092) as amended through the current quartll', Including all Exhlblts
attached thereto: Average Weekly Gross Sales Data; Composlte Profit and Losa Statements; Names.
Addresses, Telephone Numbers 01 All Franch\secl and Company Operated ShopIIn Region; Namee and Iut
known addresses and telephone numbers of all Franchise Owners In the Region whose FranchIM AgrMmerU
were terminated. cancelled. not renewed or who cae...o to do buslnasa In FIscal 1992; and, If applicable,
historical salas and profit data for an existing shop offered for sale by FranchIsOr to the Undersigned.
PIC 2684 Shop Address: 930 Walnut Bottom Road, Carlisle, PA
",...,!Iv.~ ~a.,;J;;;;;;t ,~O {XNp/./dfJ. @AP flDNL
Individually 'j.l,
W. John estnut .A/PA.I..UL t;M1, 17 tJ.LIl
Name (Please print) . Addre.. (domlcUe)
I~J~~..:"d~
Signed: 4~ /h. (l~~1
Individually
Shirley M. Chestnut
Name (Please print)
..- ~ 'c' w(domIcUe)
Signed:
Individually
Name (Please print)
Addre.. (domIcUI)
Signed:
Individually
Name (Please print)
and as an officer (s) or pIIrtner(s) 01
a ( Pennsylvania
Addre.. (domlcle)
CHES'rNUT ENTERPRISES. INC.
corporation) (
partnIrIhIp)
Delivered To:
Delivered By:
Lj/~/~
Date
lameR K. ~~h~p~h~~
John Chestnut
2. Copy for Franchisor (Home Offlce L.egaI Fie)
FTC EARNINGS DOCUMENT
REGION D/RegDl092
UPDATES INCLUDED (IF ANY)
~SR~SEDTHROUGK
QUARTER ENDING:
08/29/92
NOV 2' 8 1992
PLFASE SIGN
& DATE
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. ~. Receipt for
Certified Mall
_ NIl In...,....... CoverMle Provided
OIeatnUl Enterprises, Inc.
II. Dunkin' Donuts
1186 Harrisburg Pike
Cadiale, PA 17013
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~ Receipt for
Certified Mall
M No lnauronc. Covar_ Provklad
CbeslDut Enterprilea. Inc.
1/. Dunkin' Donull
930 Walnut Bottom RoId
Carlisle. PA 17013
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.., TOTAL Potwoe .
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THlaTy.rUTH ".001.
PHILADEL'HIA
'llrfNIYLVANIA 1110'
ABRAHAM PRESSMAN & BAUER P.C.
,\ r rORNEYS
Richani P. Abraham
Arthur L Prnem.aa'
Robm G. Bauer
Craltl R. Tru1<1Ibnw'
William w. SpIIdiDw
Joooph Schumocher
J. Samuel o'O&Ul,Jr."
WlWam H11c1a.bnncl'
...... S. 5p11diDw
Maryam t.Iahda-ri,.
DcbonhS. Webo
BoanJ.e Jl Lowe'
Uno fbhn"
Buil C. Koudcu'
Conatanane T. FoUl"D.lnl'
Evt~tt A. lWphowc"
Neil E. Durlun'
OfCoullld
_1L1nbOdA
_CoullId
W...... So SpaIdlaI
(11a) !56M99O
(BOO) ll9MNB
fAX (1Ia) ~71
DlnctDlal (115) _ 9798
I'\cuo reply UJ Phlladdpbla
October 25, 1994
Abo member.
. New York Bar
. New Je:ncy Bar
.. Minnaota Bar
. D.C. Bar
. floricLaBat
"Georwia. V"1J1Pnia
xad D.C. a.n only
Chestnut Enterprises, InC.
tJa Dunkin' Donuts
930 Walnut Bottom Road
Carlisle, PA 17013
NonCE TO CURE
NonCE OF DEFAULT
Dear Sir/Madam:
We represent Dunkin' Donuts Incorporated, successor to Dunkin' Donuts of America, Inc., and
Dunkin' Donuts of PCMsylvania, Inc. This letter constitutes written Notice to Cure and Notice of
Default under your Franchise Agreement and Lease or Sublease Agreement with our clients.
Should you fail to make timely payments or submit rmancial statements as required by your
Franchise Agreement, your Franchise Agreement and Lease or Sublease, if you lease your shop from the
Company or one of its rental subsidiaries, may be terminated. If you are among those franchise operators
who have accepted the Dunkin' Donuts "Contract Renewal Offer," or if your Franchise Agn:cmcnt
incorporates by reference a Dunkin' Donuts "Contract Renewal Offer" that has been ~ted by a
previous franchise owner, please note that a failure to cure the foregoing Notice to CurelNotice of
Default within thirty (30) days of its issuance may constitute a basis for canceling the renewal rights
granted you under the Contract Renewal Offer. Accordingly, please take notice that if you do not cure
the Notice to CureJNotice of Default within thirty (30) days, your right to renew the Fruchise
Agreement and Sublease may automatically, without additional notice to you, be canceled or revokM
pursuant to Paragraph I.g of the Contract Renewal Offer.
Kindly pay the following amounts upon receipt of this letter. Should payment not be rccd.vcd
within ten (10) days hereof, our client may initiate aU appropriate legal action of aU remedies, which may
lAhlIb v.u.. ~
II' Nor1II_1h Scrcft
AIIoa- fA \BIOI
(lIS) 45T-GIOO
U- 0IIIa0
181M KIoc Slrect
u-,PA171lOl
l7I7119!\.6W
~~
410a.-u._
t-.PAI7OU
m71m.CJOlO
Now jono1Ol1101
11_-
Qany/IILNJ-
lllOI)m6771l
......~
asa 1Im_
-"PAllIIlll -
11m 571._
~
ABRAHAM PRESSMAN & BAUER P.C.
OcflIhl' 2$. 1994
'''' Z
include legal action to evict you from the premises you lease from Dunkin' Donuts of Pennsylvania, Inc.,
and tcnnination of your Franchise Agreement with Dunkin' Donuts Incorporated.
lIEM
AMOUNT
1,241.25
1,216.41
100.00
$ 2,557.66
Adv Fee
Fran Fee
Collection Fee (this letter)
TOTAL AMOUNT DUE:
Please forward your payment immMillt~ly to Dunkin' Donuts Incorporated, Box 317, RaIIdolph,
MA 02368, attention: Carol Bowman, Collection Coordinator.
This letter is based on infonnation as of September 30, 1994.
If you have any questions, please call Ms. Bowman at (617) 961-4000. This is a very serious
matter and we urge you to give it your fmt attention.
Very truly yours,
ABRAHAM PRESSMAN &. BAUER P.C.
A ~ I .
.'y:~-,,~~-r
ALP/amg
PC: 2684
CERUl'lCU MAIL - RErURN RFpm'T REQUESTED
cc: first-class mail
Carol Bowman
Gaaid M. Conklin
James E. Haigis
Copy also scnt to:
Chestnut Enterprises, Inc.
1186 Harrisburg Pike
Carlisle, PA 17013
,
1111 .."a"IT IT lilT
THIITy.rIlTIC rLOOI
'HILADIL'H1A
'I.-NiUYLVAN1A IIIOS
ABRAHAM PRESSMAN & BAUER P.C.
\. fUKNt:VS
Rldwd P. Abroham
Anhur L Prcuman'
Rabm G. Bauer
CnilIl Tnaenbe'1l'
WlIIlam W. SJ>OIdlnll
Joocph Schumad1cr
J. SamucIOlow.Jr."
WUUam Hildcnbnnd'
IlDIa' s. SpIIdln,J
Muyam Mahdavt'.
DebonhS. WeIa
Bouie R. t.ow:'
l..aDeFishn'
Bull C. Itoudeli.'
Constanunc T. Foum.uu'
EveftU A. Kliphowe'
Neil E. Ourk.1n'
orCowutl
NaahewIL_
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ma) ~
(800) I21MPNB
FAX 11m ~71
Din<tDial Cllal_ 9798
P'- npIy III Ph_lphla
October.2S,1994
Alto member.
. NrwVor"au
. New Jcl'X'f Bar
. Minnnota Rat
. D.C. au
. norida Bar
"Georg\a. V"~a
and D.C. _ only
Chcstnut Enterprises, InC.
tJa DunkIn' Donuts
1186 Harrisburg Pike
Carlisle, PA 17013
NonCE TO CURE
NonCE OF DEFAULT
Dear Sir/Madam:
We represent Dunkin' Donuts Incorporated, successor to Dunkin' Donuts of America, Inc., and
Dunkin' Donuts of Pennsylvania, Inc. This letter constitutes written Notice to Cure and Notice of
Default under your Franchise Agreement and Lease or Sublease Agreement with our clients.
Should you fail to make timely payments or submit financial statements as required by your
Franchise Agreement, your Franchise Agreement and Lease or Sublease, if you lease your shop from the
Company or one of its rental subsidiarics, may be terminated. If you are among those franchise operators
who have accepted the Dunkin' Donuts .Contract Renewal Offer,. or if your Franchise Agreement
incorporates by reference a Dunkin' Donuts "Contract Renewal Offer" that has been w:e{lted by a
previous franchise owner, please note that a failure to cure the foregoing Notice to Cure/Notice of
Default within thirty (30) days of its issuance may constitute a basis for canceling the renewal rights
granted you under the Contract Renewal Offer. Accordingly, please take notice that if you do not cure
the Notice to Cure/Notice of Default within thirty (30) days, your right to renew the Prant'.bise
Agreement and Sublease may automatically, without additional notice to you, be canceled or revokl!d
pursuant to Paragraph I.g of the Contract Renewal Offer.
Kindly pay the following amounts upon receipt of this letter. Should payment not be received
within ten (10) days hereof, our client may initiate all appropriate legal action of all remedics, which may
Lcblcb v.u.. 0lIk0
11'llonh--U.-
AIIoD- PA 11101
11m 457-0100
""" JaIOf 0lIIca
61__
a...IlIILNJ_
IlIOlll~m
.
ABRAHAM PRESSMAN & BAUER P.C.
0ct06v 2S. 11/94
'''' 2
include legal action to evict you from the premises you lease from Dunkin' Donuts ofPcnnsylvanla, IDe.,
and termination of your Franchise Agreement with Dunkin' Donuts Incorporated.
1IEM !-MOUNT
Adv Fee 2,504.60
Fran Fee 2,454.49
. Collection Fee (this letter) 100.00
TOTAL AMOUNT DUE: $ 5,059.09
Please forward your payment immediately to Durikin' Donuts Incorporated, Box 317, Randolph,
MA 02368, attention: Carol Bowman, Collection Coordinator.
This letter is based on information as of September 30, 1994.
If you have any questions, please call Ms. Bowman at (617) 961-4000. This is a very serious
matter and we urge you to give it your first attention.
Very truly yours,
ABRAHAM PRESSMAN & BAUER P.C.
By:
ALP/amg
PC: 3695
CERTll'lHlJ MAIL - RETURN RECEIPI' REQUPSTED
cc: fint-class mail
Carol Bowman
Oclald M. Conklin
James E. Haigis
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ABRAHAM PRESSMAN & BAUER P.C.
NowIrWr n. 11194
,.,. Z
This letter is based on information as of November 1. 1994.
If you have any questions, please call Ms. Bowman at (617) 961-4000. This is a very serious
matter and we urge you to give it your first attention.
Very truly yours.
ABRAHAM PRESSMAN & BAUER P.C.
ALP/amg
PC: 3695
CERn!' lliO MAn. - RETURN RECEIPT REQUESTED
cc: first-class mail
Carol Bowman
Gerald M. Conklin
James E. Haigis
.......
By:
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Arthur L. Pressman
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Chestnut Enterprises. Inc,
I/a Dunkin' Donuts
930 Walnut Boltom Road
Carlisle, PA 17013
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PINNSYLVANIA 1910'
ABRAHAM PRESSMAN & BAUER P.C.
\ I T () R N' t. Y S
Rkhatd p, ^bnh...
Anh\U'L Prt_man.
lobm G. Bauer
Cnit R. Tnc..nbef1'
W1Waal W. Spaldin,
Jowpb Schu_
WIWam IliIdenbnncl'
Ropr S. Spaldinr
Naryam Mahclayj'
Deborah S. w..
Ioa.ru. R. Low"
LaDe Ilahcr"
ConIwuiDe T. Faurnaril.
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Ntil E. Durkin"
jtffrcy Zucker"
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November 22, 1994
Aba member.
. New Vark Rat
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. D.C. au
, D.C.lluonly
Chestnut Enterprises, Inc.
tla Dunkin' Donuts
930 Walnut Bottom Road
Carlisle, PA 17013
Re: Notice of Tennination of Franchise Al!reement and Subl--
Dear Sir/Madam:
-.
Please be advised that we represent Dunkin' Donuts Incorporated, successor by merger to Dunkin'
Donuts of America, Inc., and Dunkin' Donuts of Pennsylvania, Inc. On October 25, 1994, you received
written Notice to Cure and Notice of Default under your Franchise Agreement and Sublease with our
clients, for failure to pay sums due under said Agreement and Sublease. In accordance with Section 9.B
of said Franchise Agreement, Dunkin' Donuts of America, Inc. may terminate said Agreement after
seven (7) days of the date of receipt of written Notice to Cure if you fail to pay sums due. More than
seven (7) days have passed since you received said Notice to Cure and you continue in default for failure
to make timely payments. Accordingly, this letter constitutes written Notice of Termination of the
Franchise Agreement with Dunkin' Donuts of America, Inc.
If you are among those franchise operators who have accepted the Dunkin' Donuts .Contract
Renewal Offer", or if your Franchise Agreement Incorporates by reference a Dunkin' Donuts .Contract
Renewal Offer" that has been accepted by a previous franchise owner, please note that your failure to
cure the foregoing Notice to Cure/Notice of Default within thirty (30) days, your right to renew the
Franchise Agreement and Sublease shall be deemed automatically, without additional notice to you,
canceled or revoked pursuant to Paragraph l.g of the Contract Renewal Offer.
Please forward your payment immediately to Dunkin' Donuts Incorporated, Bolt 317, Randolph,
MA 02368, attention: Carol Bowman, Collection Coordinator.
NowJenorOftlco. 61_..... a..n, tlIIL Nj _ '18011) ~m
WI*1ncumomc. .!OCk)'~Awmue NW. SutIeMOO.W~ D.C. zoooo. (lOt') 117-151'7
ABRAHAM PRESSMAN & BAUER. P.C.
NtmrrtIm 22. 1994
'''' 2
This letter is based on information as of November I, 1994.
If you have any questions, please call Ms. Bowman at (617) 961-4000. This is a very serious
matter and we urge you to give it your first attention.
Very trUly yours,
ABRAHAM PRESSMAN & BAUER P.C.
By:
~~~
Arthur L. Pressman
ALP/amg
PC: 2684
CERTUlliD MAIL - RETURN RECEIPT REQUESTED
cc: first-class mail
Carol Bowman
Gerald M. Conklin
James E. Haigis
-.
Copy also sent to:
Chestnut Enterprises, Inc.
1186 Harrisburg Pike
Carlisle, PA 17013
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For
DDLOA-10/23/91
rOR KD CONVERSIONS
Use Where Franchise.
Owns the Property
PC 3695
Carl1ole, PA
DUNKIN' DONUTS INCORPORATED
LEASE OPTION AGREEMENT
Aqreement made this ~ day ot Ru..~uS.(.
between W, JOHN CHESTNUT AND SHIRLEY H, CHESTNUT
-6- e.~pera~iaA with principal ottices
at 1186 Harr1sbur~ Pike. Carlisle. Pennevlvania , (hereinatter reterred
to as "Owner") and DUNKIlI' DONUTS INCORPORATED, a Delaware
corporation with principal ottices at 14 Pacella Park Drive, P.O.
Box 317, Randolph, Maesachusetts 02368 (hereinatter reterred to
as "Dunkin n,) .
, 19~, by and
WITNESSETH:
:.p
OW~er owns a certain lot or parcel ot land, with the
improvements sitllated thereon, located at 1186 Harrieburg Pike.
Carlisle. Pennsvlvania more particulary described on Exhibit
A., attached hereto (the "Premises"). Owner has aqreed to
develop the Premises tor use by Owner as a DUNKIN' DONUTS SHOP
under a Franchise Aqreement between Dunkin' ae tranchisor, and
Owner, as tranchisee. This Lease Option Aqreement is entered
into by the parties in connection with Dunkin's approval ot the
Premises as a DUNKIN' DONUTS SHOP and Dunkin's qrant. ot a
tranchise to Owner. It is intended to provide Dunkin' with the
opportunity to preserve the Premises as a DUNKIN' DONUTS SHOP,
should the Franchise Aqreement be terminated.
NOW THEREFORE, INCONSIDERATION OF THE MUTUAL COVENANTS
HEREIN CONTAINED, AND FOR OTHER GOOD AND VALUABLE CONSIDERATION,
IT IS AGREED AS FOLLOWS:
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1. GRANT OF OPTION: As an essential condition ot the
approval ot the Premises tor development as a DUNKIN' DONUTS SHOP
and ot the qrant ot a tranchise there tor to Owner by Dunkin',
Owner aqre.s to provide Dunkin' with the opportunity to preserve
the Premises as a DUNKIN' DONUTS SHOP, in the event the Franchise
Aqreement should be terminated. Accordinqly, Owner hereby qrants
to DUnkin' an option, exercisable as hereinatter set torth in
this Aqreement, to enter into a lease tor the Premises upon the
same terms and conditions as are contained in the Dunkin' Donuts
Lease ot Land and BUildinq Aqreement attached hereto as Exhibit
B. DUnkin' and Owner aqree that the term ot said Lease and the
rental provisions ot said Lease shall be those provided in the
Rider tn Dunkin' Donuts Lease ot Land and Buildinq attached
hereto as Exhibit C. Owner represents and warrants to Dunkin'
that Owner holds tee simple title to the Premises.
.,
. .
"
,
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-
2. TERMINATION OF FRANCHISE AGREEMENT: It the Franchise
Agreement between Dunkin' and Owner is terminated tor any reason
during the term or any extension thereot, Dunkin' shall have a
period at thirty (30) days atter Owner receives trom Dunkin'
written notice ot termination ot the Franchise Agreement, in
which to elect to enter into a new lease with Owner containing
the same terms and conditions as the attached Exhibit "A" (the
"Lease"). Within five (5) days atter Owner's receipt at written
notice trom Dunkin' advising Owner that Dunkin' elects to enter
into the Lease, Owner shall execute, acknowledge, and deliver
such Lease to Dunkin' and upon its acceptance and execution by
Dunkin', Owner shall deliver possession at the Premises to
Dunkin', tree and clear ot all rights ot any third parties,
whatsoever.
:~
3. EXPIRATION OF LEASE: It the Lease contains renewal
rights and is allowed to expire by Lessee without exercise at
said rights, Lessor shall give written notice thereot to Dunkin'
within three (3) days tollowing expiration and Dunkin' shall have
the right but not the obligation tor an additional ten (10) days
tollowing receipt ot said notice to exercise said renewal rights
on the same terms and conditions as contained in said Lease. It
Dunkin' elects to continue the use ot the premises as a Dunkin'
Donuts Shop, Dunkin' shall so notity Lessor in writing whereupon
Lessor shall promptly execute and deliver to Dunkin' an
assignment ot said Lease and possession ot the premises tree and
clear ot any rights ot Lessee or any third party.
4. GENERAL PROVISIONS:
A. Owner hereby designates and appoints Dunkin' as its
agent to execute any and all documents and to take all action as
may be necessary or desirable to ettectuate the pertormance at
any and allot Owner's duties under this Agreement in the event
ot termination ot the Franchise Agreement. Owner agrees to
peaceably and promptly vacate the Premises and to remove its
personal property theretrom upon receipt ot DUnkin's written
notice ot its exercise at the option herein granted. Any
property not so removed within ten (10) days tollowing receipt at
such written notice shall be deemed abandoned.
",".
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B. Dunkin' shall not be required to begin paying rent
under the new Lease until delivery to it ot possession at the
Premises, tree and clear ot any rights ot third partiee. DUnkin'
shall be entitled to ottset against rentals under the new Lease
all amounts required in order to cure Owner's detaults under the
Franchise Agreement.
c. Dunkin' may assign without recourse its rights under
this Lease Option Agreement or its rights under the new Lease
without the conoent ot O~ner, provided that the assignee shall
. .
- .
2
,
...
,~
execute and deliver to Owner an assumption agreement by which the
assignee agreas to assume the new Lease and to observe the term.
and conditions and agreements on the part of the lessee to be
performed under the new Lease. Dunkin' may sublet the Premisee
or any part thereof without the consent of Owner. .
In the event Dunkin' shall elect to assume the Lessee's right.
and obligations under the Lease, Dunkin' ehall have the right, at
any time after three (3) years as tenant, to terminate the Lea.e
by giving Lessor at least one hundred twenty (120) day. written
notice. If Dunkin' shall exercise this right of termination,
Dunkin', after removing its equipment, trade fixtures and .ign.,
shall return the premises to Lessor, allowing to remain thereon
all of the Lessee's and Dunkin's improvements to the premi....
5. DE-IDENTIFICATION: If the Franchise Agreement i.
terminated and Dunkin' does not elect to continu. the premi... a.
a DUNKIN' DONUTS SHOP, Owner agreee to de-identify the Premise.
a. a DUNKIN' DONUTS SHOP by promptly removing all signs, logo.,
trademarks, insigniae, decor and other items which Dunkin'
reasonably requests to be removed as being distinctive and
indicative of a DUNKIN' DONUTS SHOP. If Owner fails to effect
such de-identification within (10) days atter DUnkin's requ..t
therefor, Dunkin' may enter upon the Premise. to effect such d.-
identification without being guilty of trespass or tort and may
bill the Owner tor its reasonable costs and expenses in eff.cting
de-identification of the Premises. In the event Owner doe. not
pay Dunkin' within titteen (15) days atter Owner's receipt of
DUnkin'S demand therefor, Dunkin' may place a lien upon the
Premises in the tull amount of such costs and expense..
6. REMEDIES AND ADDITIONAL PROVISIONS: This Lease Option
Agreement shall run with the land and be binding upon the part i..
hereto and th.ir successors, assigns, executor. and
administrators and representatives. The rights and Obligation.
herein contained shall continue, notwithstanding change. in the
persons or entity that may hold any leas.hold or ownership in the
land or building. At the request of Lessor. or Less.e, DUnkin'.
rights hereunder may be subordinated to the lien of any mortgage
or deed of trust hereinafter placed upon the premi.es, provided
that the mortgagee or trustee shall agree in writing to
recognize, honor and not disturb Dunkin's right to exercise the
option and ~ssume the Lease as set forth in this Agr.ement. Any
party hereto may record this Agreement. Any party hereto may
seek equitable relief or injunctive reliet inClUding, without
limitation, specific performance tor actual or threaten.d
violation or non-performance ot this Agreem.nt by any other
party. Such remedies shall be in addition to all other rights
provided for in this Lease option Agreement or by law.
7. NOTICE: All notices hereunder shall be sent by
certified mail, return rnceipt requestod, to the addresme. herein
;p
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NO'TARIA\. SEAl.
\\ER\.ENE !.lARHEVI\~ N.lor1 1'011.
r.trlft". Culftbltllnf clune,. PL
:~I l.lImlf.laaltn Eaplr.. 117/94
STATE OF ~ )
COUNTY OF ~o.uL l SS:
On the 0)6-c:J-,. day of It'A . ul.:f. I J<<J..a., before me came
II. John~Claatnut ~ aiid"'iiy that he is the
individual described in and who executed the foregoing instrument
and acknowledged to me that he executed he same, betore me,
L
Expires:
STATE OF ~
COUNTY OF ~~
)
) SS:
)
r /qq;v, betore 11Ie came
and say that he is the
who executed ~he foregoing instrument
e executed t e same, before me,
Expires:
that
NO'TARIAI. SEAl.
\\ER\.ENE IolARHEVI\~ N.lor1 P....I.
Carlla!., Cu..b"'anl C.unt1, PL
tJo, C.....I..t.. E~lr.. 617194
.,;-
COMMONWEALTH .OF ~ )
) SS:
COUNTY OF~ )
On this the .5~day of (J)~ ' 1'1'1 ~betore me
came David B. Heller and say that he is the
Director of DUNKIN' DONUTS INCORPORATED and
executed the foregoing instrument, that he signed his name
thereto and attixed the seal ot the corporation and has delivered
a copy ot this instrument to the other party in accordance with
the order ot the Board ot Directors ot said corporation, before
me. ~
lh~'~..~ ~
N tary publ'1c
My cOllllDiss1on Expires: //-.iU'? ~
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(28290) (Rev. 10/23/91)
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Thi. ~onyey.nce i. mlde lubject to ,11 other cOVlnantll
conditions, restrictionl, e..ement. provillona, except onl and
relely.tionl, if .ny, contained if former inltruments of record.
Together with all the right, title and interelt, if Iny, of th.
Crantof, in and to all land 1yiftS in III atteetl and highway.
abutting on or appurtenant to .IL4 premil".
SEINC the ..m. pr.mi... which Hobil. Oil Corporation, by d..d
dated Hay 22, 1986 and recorded in Cumberland County Deed Book C,
Volume 32, Page 975. granted and conveyed to Richard Hollenbaugh,
one of the Crantors herein.
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COftBtT 8.
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DUNKIN' DONUTS-
LEASE OF LAND AND BUILDING
_1'-
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..-...
w. JOHN CHESTNUT and SHIRLEY M. CHESTNUT
"
r~TliqR. PRnnqylu~ni~
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LIGA&. DUCAWnQN INCLUDeNCI MORTCIAOIL IA8IMDT1r. CONDl11ONlr. UIlITA1tQtI8
AND Ra1'1aC110Nl Of! IIlIICOIIO U, AMYl
SEE DEED ATTACHED.
-
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EXHIBIT C.
PC 3615
carli.i.. PI..
. '
RIDZR TO DONKIN' DONUTS LEASZ or LaND AND BUILDING
partiaa and pr..i...
1. Thi. l.ase is appended to and incorporated by r.f.r.nc. in the
Dunkin' Donuts Laa.s of Land and Building and Dunkin' Donut.
Leas. option Agreemant attached.
T.rm and Eat.n.ion.
2.(a)
Th. term shall commsnce upon d.livery of the premisa. to
Dunkin' Donuts by Lessor upon ex.rcis. by Dunkin' Donuts of
its rights under the Dunkin' Donuts Laa.e Option Aqr....nt
r.ferenced in Paragraph 1.
R.nt
]. (a) Commencing upon delivery of possession of the PREMISES, LESSEE
agrees to pay the following yearly BASE RENTAL, in equal
monthly installments, in advance on the fifteenth (15th) day
of the month immediately proceding the month for which r.ntals
are due:
Rantal Period
From
To
BASE RENT
Yearlv Mon'thlv
- August 17, 2012
$60,000.00
$5,000.00
CPI Inor.....1
Unless otherwise provided below, the rental payable during
these five (5) year extension periods shall be adju.t.d at the
commencement of each five (5) year exteneion period in
accordance with the change in the "Revised Consum.r Price
Index" (CPI) published by the U.S. Bureau of Labor Stati.tics,
using the date that rent first commenced as a base p.riod and
comparing it with the "Revised Consumer Price Index" a. of the
date of the end of the then expiring term. The rental for the
ensuing extension term shall be adjueted in accordanc. with
the foregoing only once for each term and shall bs paid in
equal, con.tant, monthly installment. payable in advanc., in
accordance with the aforesaid "Revised Consumer price Ind.x.
adjustment. Th. sdd Index shall ba the "R.vised Con.WI.r
Price Indsx for Urban Wage Earners and Clerical Work.rs., all
items U.S. cities average, series A (1967 - 100) publi.hed by
the Bureau of Labor Statistics.
,
!
. ....
J
. .
to t~e LESSEE any amounts deposited with t~e LESSOR, aB
provided ~erein. in exce.s ot t~e total PERCENTAGE RENT dUB
ba~.d on actual GROSS SALES tor any LEASE YEAR upon receipt ot
the etatement ot GROSS SALES. LESSOR r.servee the ri9~t to
apply any retund outstandin9 obli9ations ot LESSEE, it eny.
.
.
(LESSOR)
WITNESS:
W. John Chestnut
, '
S~irley M. Chestnut
A'l"1'EST:
(LESSn)
DUNKIN' DONUTS INCORPORATED
By:
Jack Lauderm1lk,
Asst. Secretary
JL/Id
_lto.2Htl
",1HZ)
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rc 2684
DUNKIN' DON11I'S INCORPORATED
. UWlEOPnONAGREEMENT
AOII!I!MI!M'_...u4....,"~I,2Lbr.._ 1/, John and Shirley H, Chutnut
.1( ind1f1tduall _1.lI11Y.l................. c/o Dunkin
Donuts. 1186 Harrisburg Pike, Carliale, PA
~,.,."....~...
t'"Nll'C::TmlT F.NTF.RPRT~F.~. I~C.
.. hnnsylvlnla
-... Ita................ ~/o nllnkin' Donuts, 1186 HarrlsburR Pike, earlhl.. PA
~ - .. 'T--.... DUN1aN' DONUI'IINCDUORA11lD,. Dolo-. _.......... _...... _.14 _
..... DlM.IO..:m,...... t. . CIDII~""" ea.-o.Ida").
..................T........."....II:IciMIlI.. 930 Walnut Bottom Road. Carlisll. PA
(''''-').-'''-'''--- ~ /I .Ia(....~').
rorTIMM', _.. DvMia' Oa... SIIlap...... "'-*'-...-.... / . .'--, '*- o-M.'.."......
...T_._(....p_~ 11._""''-010__._11.. __10_"'10
~ wttII o.uiI'. ~ 01... *"'" ~ .. o.MMI' eo.. ~... pIM ct.,..... ..T..... II.......... to pdMlII
o.M:ia'IM .. .410 ,...,..... "...... o-tIa' Da.II........ ar- - .......,..,.. 1oN.... to _l.MdIaN....
It o...a....... UlI ......... ___ ..,.,.... 01 T.... .... 1M ~ WI" nM'" o..am.' .................. 01...
........... .. A.-oIt11l1......CIGIIaIatI.....---..,........pllI.......... . ~.................,oI
....... '. 1. tM,.,u...... _ raaa...
SI!C'I10N I . GRAN!' OF omaN
1.0 1.ud.kIId pull 10 Dukia' .. opeD 10..... 1M ...........,.,.. ell 1M ICIICW I!DIbk It. ~... .... ~..
__.._r...r....(....'Opdoo'~
1.1 u~ Det.MII 01 TCMaI ....,...... l.uldIafd IWI ... OtiUiI' CClpIII at all .... 01 .... .. ..... 10 T....
0DMmaU,..... ptaa IUCtI .... 10 Taut. U T..... failit to C'IIN ..,. ..,.... ....... 1M paiod ..... .. 1M ~ lMdIord ....
~ 1M o.d:ia'..... .... .......... ...".. 1M dcta..... T.... .. ,... m cwa ... ...... aru o.Mia' 1M 0pdDI1O _ dill
T....... ill&.... .. * La.. (tM "Ofhl"'). lMdIard.....1Ct.I4 IlO tM 0<<.... ~." M UrlI ...... ~.., . dlIRIo.
lloUIo'....._... "'"""' W..... br- _. ~...T_(... .~')_ ....,.(111)...._-.. "...
0If.,"-~
l.2 Upoa T.,..... 01*...... A.pIcMgL 11 UrlI maiM ,."............... fOf.., _ ..... &a. ..,. cI
&1M lA.-. or.., UIaIiaa limot.... it 0Iad:iI.' &MII.-&n:1O ~ .... ~ DYUia..... ~ pel.Mdlcft..,...__1IMftat.
WlIIlia Wny (10) dayt afte,.... ...... LudIard IMII .. 1haUia' wrinaa... ~ My""" oIT.... __ till .............
oft... Dukia' ullIIflI* to __ 1M T....... ....... ill 1M t.a. (1M -otI'd). lMdIoN.... MId m dae Offer......... ..",01 UrlI
La..iDd......,................ Dutia'.... UItC'iII 1M ~ II..... "'...,........10 a......~ (die .t......~')
-....,.(JO).....r-.,o"... OlI"r_~
l.3 Upoa ,......... 011'" ...... TIna. U UrlI ..... ~ ..,. r--.I or ....... rtpa 1M 1M en. _IbM IlO
upin byT..........,.. '.muallid rtpllou.ao.d IIaaI JlftBpd)'pw.wrina IClCicIIIMNoIIO o.Mia'. _ iii .....IMtrtu. &WftJ(3O)
..,. -.......- "'... ....... DWla' .... .... ... _ lor.. __....,. (JO) .... _ -.. _. _ ...
T......,..... riIH ~ ......... ..,..... ~ . CllM&aiMI .. 1M ta.L U o..tiao.... 10...... __....11II..... 1M... tJI
........... o.u...... II) Mdy........... wn..... ..n.,. 1..udIatd..... pn.pdyUlaltll'" 4WM:, to o.w.'......-. of o..u.o
II..... ofT........ aMIIddMt,.... 01 1M ....... eo 011""" ...- . 01 &a. ....... or....... ..01.....-.
SECrION n. TI!NANT'S COVENANl'S
2-D UT...... laUI to u..Jy AN .., dcta..tlude'.... ~ or ia dM:..... 01.......... 01... ,...... A..-&. ,.....
.........lIUa II. (10) 4Iys an.,wnllU.1UIId '" DukiII'...... aU oIitI nata&. dtk Md.__ II ud m'" La.e 10 o.MIIio. liT.... WIt.
do ."'111I. IUd ... (10) da}'L T.........rebf....... D..... u 1"....11I......,... II.. - .......... m.... IIIC1i1M.
...,... --., or ....... 10 ."...... u.. ........ at me ..... ud ... ~ ' ..-- of .., ... III 01 1'--. ..... ..........
~.....,_..18-_........18DwoOia._.._"...'-o..........oO_.IT__...
..... bcfon 1Ikiq: ~ 01 11M rn..... T...... hlUle, ... to ~pd)' ud ,....,.,...... 1M PftaiIII_ .- .. .......
pn:1pIny. .llk ~"'. Nqual 01 DIIAkIa', Nt, '""'''' ... II) ftlMMd by T....I .,~ In (10) ...,. foIbriaI ,...,. 01.... wrtUIII __
1baU... deelMll etNlllSoHd by TcllU&,
2.1 T.....I .pwa 1"'1 ........lkM cl 11M Praftdaill Apa:..., and fail... 01 T..... to .... 6&1 ....... .. 1M ..... 10
DUIlk!.' .. NI lonll "Nut, IIWI be . del.vll IIftdIr 1M l.uM wtId ...11 ..11111. bllllKll oblip... LudSonIco ..f*:Jf 1tpI...... ......tI .
.u....". pmca. Of' OIfle.....IO nICI TCIWII lIUfIIIM PnlUCL
..
w.
ADDENDUM TO DUNKIN' DONUTS INCORPORATED LEASE OPTION AGREEMENT
The rights of Dunkin' under the Dunkin' Donuts Incorporated
Lease Option Agreement shall be contingent upon Dunkin' applying
for. qualifying for and obtaining a franchise to continue the
operation of the contemplated Jerry's Subs and pizza shop at
the location at 930 Walnut Bottom Road. South Middleton
Township.
W. John and Shirley M. Chestnut
o.r ~ iiJ;;;1-
j::IL:~ }1" ry,,:;i;;.:;'-
Chestnut Enterprises, Inc.
_-#'1-" 4"+""'0'" 1rJf-.~
Dunkin' Donuts Incorporated
(attest)
r
,
I
I
I
I
I
...
.. )';"",
l'
..
. '~"
.....
:4
,
~
to'\,; .lbU"
L~SE OF DUNKIN' D~UTS SHOP
" TllIIl.!Asu.tad '-fY\O '.J.. U .4-
\I. John and Shfl'l@Y M -::.."""P Ovirhllll. ,
In ~ (tnI USSOA'.IIII CHESTNUT ENTFRPRtSF~. T~r:
...
"~Io_byanll_
,.....
ltIW'VaJlMOllOl-
at c/o Dunkin' DonutN.llRft lI;1Y'"i",t-.uf'n PH,.
..... Ic:-r.'.....
. Pennsylvania
(".:1..1 t.., '" III 1 ,n,1
- ...-
....,..-.~I ftIVI'19 ttI pnncIPII oft'a In
_oa.
Penngvlvl1ni:t U,..USSE!1.
2, Tho LESSOR _la_to IN L!SSEE II1llIha LESSEE _Ia_ fromlha LU,SOR"'-'Y
and 1M DUNKlN'OONUTSSHOPtr'llf"lQntocatldlt Q10 Wnlnllt Rnt'tnm RnAA
-
In Carlisle. PA ,'7nl'
~.I.... _ Dc:...
n..... fIlIy"- on _ A _ I'" 'PtIEMISU"\.
3. 1'1 c..1".:....lQupon___,....1Ian1l1ll~0IIhaPIIIMISUUaaltonnh'.....--.7
_~1I1ll ~~... ,ann. IN L!S5U _ ID PlY . ~ BAlI RENT 01
dkl/, J~ ,....JL -.: OOInC'Jb1tJJi16--.),"eQUllt'MIItHt~..,_,tI
ot~.__..J'f:_ _ _(t ",.,!:!!!,,_ 'BAllIIENT_"'PlYIllIO
in_rnorto'lY""""""''' arlvanooan ...tltI_(laldrtotlNrnontnm.-'IIy.. ...1Q...rnontnfor........
'.......110 dUO, The base rent shall be increased annually proportionate
to the tbnri:''ls'lSE~Mt~.i.'i.'\&i.,;.n.~~!Jd~rI'p}R~i.l'~~'NI'hal'
lIanUl comPOl-III ..!noel" ParaQfOPI\ n 01 Iha _ ollha DUNKIN' DONUTS SHOP - ..
men.. an 1110 PREMISES, Iha LESSOR'S TOTAL COST.".. -
OCIIrIIS " "-
..... promply notify .. LESSEE 01 III _ TOTAL COST and" IUClt _ TOT
"' fonn _,Iha yo."., BASE RENT __.. PIIOQfOIlII3(.I-..... ........ ot ..........
by an amount _ID _ I 'llo) ClltI<<W<lO _Iha LESSOR'S_
TOTAL COST II1llIha n"""'to II' tonn _, My Plymant ..b_........-..ID -- cn--'Y JlOld
.".. .. PIlCl to ot from me LESSOR no Ia,ar II1an 'II.hal'''' data 01 LESSOR'S -, ...... Ihat ..
LESSOR may _...,..l\lnCl 01 .llOIIIrantII. ,-,.- from'" LESSEE.""". Fot Iha_
0111111 PIIOQIOllfl3(bl, "TOTAL cosrl. n rDIdng 11'1/ and ai_ lU1d _......, rDIdng Iha -' 01
.... ""ot..........,llUllclo'lQ CIIlIII ' 1fChl0000000, .-o--'IQ and IIQII'_ (rDIdng'" -' ollllla......
1IlCII,_,CIOSInQII1ll ....II,..~.oQ,."and....,__ond-......--..
...._ ot IN 'DONUTS SHOP _...,..... _ _ _tad ID'" PfIEM1SES _by IN
1I111^LS JLESSDR. II artMOCIUfOl_IIQII..pon...,Ilo~.IQ,." and lUOI, -- anll_1 COOla"l"",,
._ 0CIIrI (S 1.1UClt._ WIll... rtamll" and luomr!'
o IN LESSEE, UIlIlII_"
(el Fot lrac1lCn 01 . _11 monlll .. Iha IlaQlIft'oQ and ... and ollha......, - anal ba
llUarl an . 30 day rnontn.
.. 1'1 Tho LESSEE lunnar ag._ '0 Ply IN LESSOR, lot _ LEASE YEAJI,Iha by........-
_ (12"'0) 01 GROSS SALES ._. .. amount 01 BASE RENT JlOld ot poyallla LEASE YEAR. Thr
LESSEE IIr\llIf _ID mall. arlvlllCll mon..., paymams 0I1UClt PERCENTAGE an'" - (UIIllda'
01 me momn _'1Iy Ilf1OPICl"lQ Iha momn lot _."'" __.. cNI on aquoIlD ...._1'/12111
01" amount by........ _ _II~.I 01" GROSS SALES h LEASE YEAR........... BASI
RENT lotIN curront LEASE YEAR. In an......_ 01.- unclOI......... 01'" -apn... LE5
SEE 'QfWI to _ WllIIIha LESSOR. _1110 llr1t I.!A 01 tI'iI LEASE. noIlaWII1On - (15)dOY
.hal'...-.ot_LEASEMONTH,lhaamountby _1'2"'o)otIhaGROSSSALEShlha"-
LEASE MONTH ........ Iha BASI! RENT tor 1110 rnontn.
Ba..
"""
P.rnnllg.
R.nt
D.ftnttkIrll
SE YEAR, 'fOII't--
leI Iha GROSS SALES amount uaarllD ~ an - rnorto'lY I'El\CENTAGE REN
.ymantll .ponollof_tNn_ll21montN, ."",GRDSS SALES_...._llOl..lDan....c
, ...., ..................--by_I'21IO..lIaCtan--"_GROSS8ALE8...............11U
,ITIr,I.S ~ _troQ .. arlv_ rnorto'lY PEIICENTAGE RENT PIY"*'1 tor IN . 1- LIA5E YEAR, ,
- onPI1OQIIIlfI'I'I-,
$. ('1 ThO...... 'GROSS SALES", n uaarl_, _ - II - _171 1haLSSE! h,an.otflo
me PREMiSES""'..... noI_ ~ _, -.... ot..........,
lbl ThO torm '\.EASE YEAR', u...._,....- to _..- 0152_-
_,.''''''''lQ an me rnt SunclaY 1110 DUNKIN' DONUTS SHOP It open ID"""'" gonaraI"-' otan... nall1I'
PNdonQ .......... daY d IN DUNKIN' DONUTS SHOP 10 noI open an Sunday,
leI 'TIla torm '\.EASE MONTH", n uaarl_. _",..,IN ponollllaQlWW'Q an... 5unclay -"
l--.g Iha IUI S.\lnIOy 01 ...,....... rnontn lI1llancll'oQ an ..1U15atllfUOY 01 Iha naIl1_ rnontn.
e. 'TIlaLESSEE_lDturmhIhaLESSDR, _tltIylaGldayO ~_W8E YEA
ollha GROSS SALES totoucn yoor_by an ........odInl ~........- R, My PE
CENTAGERENTdUOllUarluponIUCltGROSSSALES"'XPlUot _Wlll1IhaLESSC
I' Ilf1;MdfId 1DOYe. tI to De _ ~ M.G1.tlr._1_L ThI LESSOR IlQFWI to,.It
'0" LESSEE.",.".,..". R, nprcmdad-.on_oI.._PEIICENTAOl! RE
dUO llUarl on for..., LEASE YEAR upon.- 01 Iha - .--...'" 01 GROSS SAL.
n IN flQnl'O 1Dllf't...,..tuncI 0QUlIl QU\I\I1'dInQ ......-.. 01 LDSEE.".",.
_I
..... II.pen
,
. 't_'"
. c-._._~
01_
TUN
Pul'1lO" Ind
U..
LI.eor'l
Wtrnna..
L..tor'l
Cawenantl
L......
eow-nta
...
7, (lI~l.!AII.....tIW"""-'.'--4"'--' 1993 1,93 and
Ind...-,gan Anl"'t 1 10 ""1' '1I'IIL&SSU'SGt*gaDCr'ltaCIIY"""'~1Dore
1NlI_..._...4....11'd en IUCft dI.: prcwIdICI. hOwwM', Nt....1NI DIi no 0Cli0nDn 10 PlY tN,.,......,..".
__,.......,01... 011*II' DonuII S/lopand_ot tlWPA!MISU to"'WSU,II.llUNKIN' DONUTS
EQUIPMIN1' 'ACKAllIII ID DO"'- n lilt 1'l\!MISU by DUNKIN' DONIITS INCOAI'OIIATED. --......
......_....lIltllhal'll!MISIS ......-ay_ID----oI.~.DONUTS~
u ....1_...... hIrw\: If IQI.IClIMI1IIIIa be mtllld by N LUSE!.IUbItInOll......,_~,....~ N'_",D,4.
ISES .....-.oy _ID _ ...... ...lOla_ 01 __ Dy lilt LfSSE!.
(b) PnarION.....n--,_il of "'term, IN LESSE! may pr'DCMd to Ir8CI *__, OI~
1lQIlIlU1d 10 0UIlII... DUNKIN' DONUTS SHO' _ ft...... and 10 ...... _, .....- 11IOI-' _lla no
urn.........."~ ,.. ~_ """ tIW LfSSOR II1lllhat Iha LESSUWIII ornclIOY.,..,...... - u ...""'...... ""'-
or .....tlQ46rty wrG'\ any labCf crgAI'IUtIOn ._._.tli''Q N.... performng wane tor N L!SSOR 01 any _I~__.
OIl. ,.""en. Tho LESSEE'S an....... an... PREMISES 101...... _..... noI_..., --.y......1Ila
LfSSOR 101"" ftallnl 01_ on"- OIW1l1\l......by... LfSSE!. II1lltIW LfSSE!..., pnor ID CQIN',--oQ
IUClt worll, _... LfSSOR to lla....... lnlm...... 01... LESSEE'S amry upon ...I'l\EMISIS -.-.,_.
arOQO __.........ID DO carnarl by'" LfSSU duml'" tarm_, and'" ._,....,....ty..u;s..
SOR Nt llwanunen 01 N LESSE! and of.",01 IN LESSEE'S .....,II_un and I' ,.._~... propIftf cov..a
by W_. Cornponaa_ It.....n..,
a, (II In _ to Iha _ ......... _,Iha LfSSU_ ID pay. - _lU1d ....-.
1ClI:INe. II ruI... lUll'" oUW tueI. n:&IdInQ ~ ,..-- ,",IS for bI1'tInNI"a. WI'IIdl rnIY" tnpOIIClI en
01_ _ ond IlOYO* _ _ID... PA!MISU duml'" tarm.llumg...1IrIt and 101I yMllI 01 Iha tarm
.. LESSEE _ pay........ __ 01........ IUn; 1OIll""" _ DO ..........4 _lha....., "'... ponod for
_....... aN _ID _.,.., _ IUn.-.,..lD... tann 01 Iha l.!ASI. llla WIEE may, at..
own ..0IftM. and 1ft thI NmI of __ 01 DOI'l b"WSOR 01 tN LESSEI. inrUtI and pr'DIJICUtIi pr ~ .gI tor 11\
aba_ 01_ 01 ..., tu lU1d Iha LfSSDR _ to _Ia _ Iha LESSEE In..., ...... .. ~oQL
(bl lllaLfSSU_1D __Iha LESSOR UClImontlI...."..'lII1l,',21ot....-... "'..,
fill n.... \Un duall1llllOyallIa an... PREMISES. FOI ...- 01 hi LEASE. Iha n_ \'OIif'/ fill n.... tu
an.. PREMISES ..... DO _ to lla ... amount 01 tu _ on Iha moot curant tal _ of tile IUInQ IlI\llIlIIIlU
__,..4...... LESSOR dwl_lU..._ Nt an lItema1rYe enmatwd yuny ruI "'11. tax. men rwuonaD!e. OunnQ
.. _ ""'" _..,__,_" 01 _ until... and 01" rm ,.. _, Iha LfSSEE "" malIO..-.Ny tu IlOvman'
QIpOIrtIot Ill" nf ,,,,...,1'4"'11(1 1'......'" ..... h.1pol11r1ll \,AllUCt1tnCll'llfYlUPlymentSsnlll
ba dUO lU1d poy_ n.. _ _ u 1110.........,.,- _ unclOI PIIOQFOIlIl3C')-, upon.. pavman'
01 any..... "till 01 cnrw tu biI. tI LESSOR d6tt.m..... Nt tnenI. . 46R...-liCt In .,. ba&InC8 at dIPOIItI N6CI on
__ 01 luIln tu _, LESSU.....llIIY ID LESSOR, ...... twanlY 1201_ .,. boIInO, Iha - 01 """"
..-.:y, u -by LESSOR,
9. ".. ~ 1I1a1" LESSEE may uNlIla PREMISES.,.., 1011110",*,,_." DUNKIN' DONUTS SHOF
lor tN mlllJllCtlft Ird... an Of oft '" PREMISES. .t wnoInUI 01 rlw. 0'1ne talOwrMg 1I1Idn: dOnUtI. dOnut DaS'
'_,IOUPI, OO"M lU1d _ ba'._,II1ll.... prcclUC1I lnlm ""'" t. """'........ on _by LfSSOR
Tho LfSSEE snaI uN ... PREMISES 101 no .... .........' -
10. no. LESSOR Wanantllha'lha LfSSOR _... PREMISES, -by __ 01 lone. 01"",
1I1lllha' .. LfSSOR ".. 1uI. ngIlI to ,"'01 on,. 111II LEASE.
11, llla LfSSOR _:
I-I Toc:cn'Olttl. arlocauMcom~DOnOt. anywc:rtc r"IQlJAIdtolUbltll\t:IItt~tne PREMISE!:
",___DUNKIN' DONUTS_II1ll-"='tlIlI\I___IdI.IW-..,..._OI ""
twm 01 trill LEASE.:
(b) To_to.. LfSSEE.. wltf_II1llQUllOlll_CD1aonarl trorr._,o__., .-0010"""
wftt'I f"IIOICI to U'le l)II"tCrmInC:e. wen. ana mattNil ana eQUIPf1W'It used " ow c:cnsn.lCtlOn Ind dewllOPn'*'n 01 the
PREMISES II1llIO uN __ CllI>QanC>> on llIllong .. LfSSEE In Iha anl.......- 01 """ wlITOflllOl and QUII
ant..: Ind
Ie) NclID_" LESSEE'S ......-lI1llquool ..'10\....." 01'" PREMISES IOIOnQ u.. LES
SEE It not on 011_ unclOI'" LEASE.
12. Tho LESSEE _
(') To pay, _..., _lU1d.. CIIarQIIIIOIW_, QU, '*"""'Yand-- ~ 10..
PREMISES:
(0) To pay..., _ ..tun _ID 1I1ll_ upon.. PREMISES lU1d Iha LfSSEE'S_
_ an .. PREMISES;
Ie) Prtor to amry ,-,.. PREMISES, to....... and "*ltain on ..,_ and _1OI1ha PREMISE!
dln'Q IN InII'IIIIIm of".. LEASE. It NLaSS!!'S lde.qJIIftM.lI'I............ poMcyOl___,..__...1Nt..ESSEI
lU1d.. LfSSOR and"''''''''' and ~,""".- OQOInaIont IOU,.-., 01'_ -- lnlm 1- ""'
'''-IIlnI,_''II"Y.IhaI1._,__OI_ananoOl-.mo~''on''''. ' ,-
Iha PREMISES 01 by f'IUIlI\ 01 1110 LESSEE'S ",*,,1IIlI\ 01 00C!JIlII'CY 01 1110 PREMISES, Sudl ~ 01 ....... ana
_...,............QIl*Wo--,..........,.-.g. tlulnol_ID,..-..:IlU1d_ --.yoo....
...111. _"'" of cna"*"'..... 1" ,000.000.00) OIIUClt flOQIlII "'" u LfSSOR, In III _ and -.............
rnavlnlm_'o"",,,_, forllOdly"II"Y and___,..rlIk__-,.......
""l_II1ll....-... "'_...,,101.... P"O' ,_" ooo,.- 01" PREMISES. pIa..QIUO.......... -.....
rnNWa. I' ~. Ind IUCft ItlMCII'Y ........... u may be reQW'Id In N ItllI " wtWII h DUNKIN' DONUT!
SHOP It _'arl, AI ........ ."OIOarlby Iha ...... _ unclOI ... tarma of ... Pngrapn .....:
(1) 80_"" namnot 1110 LfSSEE,IIla LESSOR and"" -PMY llnC1arlby "" I.El:
SOR. It \:l'leIr rnPiICIM In...a may ~
121 Be wrtntn by inU'If'CIt _._ ...1CClIOtIt*I to tN L.ISSOR:
131 CCn1aon~_IOIha__byIlaUQalllll\OlflQlltsotflClOYar'/lQ,,",
any pony namarI;
(4) eon-.. .....-.lhat __ 01111"'_ camot lla maoo_lllout dW1y (3'
_ _ noIICI to..., PMY namarI; II1ll
.
.
'.
SUbOrdlnltlon
_I
co.,nam,
Lelwt Rlg""
tI/a-.....DO..-IlIlftW.yby_....,...... ...__DO_byhLESSOR,
~._..UI......._~oI..,rnorIlIOlIO,_ottruolar..,
DIW IICUIty ..,. -'..... U II'lItnId .......
Ounng'" tarm 01 ... LlASI.... USSEE _.......... WSOll- _ ortginala 01.. - -,
lIQIllIlQ_ondrtP __, tPQOt*__.........-----"....,
.... dIn'9............ USSEE 111I to ~ _Iha ___ oIfal'ngrapn ,:!lei.... WSOll,"-
ID" __ ._, may _ID_...... _1Illl kaall... ......- and...l.USU_
pay Iha WSOll, U __ rant 14lO'l_1ha "* 01......... -, . ,
Id) To CIOfllIlI'/ promPIlY """aI applcalIIa lawa, .....~IIClnI, _, __ and_
ol,,-_,II1I_otF"U-"'and-~Illlna;
I') T........LESSOA andll'f_....,~an_.....PREMISES-IIlll......'1I.4
trcm 1I1ll_..., and aI lVI, _,..... or.... 01-' to Il'f""" ar pr-"f - on.._
(Q To k_'" PREMISES lI1llal _, _, ~,pIurrbinQ ond _ "'l' ,_4 _ ar.....
__ --" _ ollha _ klncl 01 QUIiIt'f and .._.....,IIlll.. ......~_,....IIlll_ U...
lamI are I' N tJIOlI'VW'Q at. t$ may be put.... dUn'IQ tne linn 0'''' LEASE. Ixmpt tar r- ---.tIll wMI and &1M and
_by .... or unI_ c:uuany:
un TOmak.nomatlftll....uon.edCIItiaft.""". ,_401~._..~_...,Ii'l.CI"to........,.pWU
ollha DUNKIN' DONUTS SHOP _ _ _ _ 01... WSOll;
till To kaalllul.""""'" _ 0=1010 _1Illl_1n do....... gannI'/-.s
IClCDl ,tlo oQ prl"lClPltllI'd ., IN tonn and n'W'II* II may bI..._1ibId by" L.ESSOR tram trM tD""'tDlItI:M nS
1-..... LlSSOR'S _lion 0I1ha LESSEE'S GROSSllAL!lllllll1D _ _..... WSOll ar_
......... 01'" LESSOR ID _ _ and ..-.mo;
(1) To ....... ....., _"Iha DUNKIN' DONUTS 8HOI' an Iha PREMISES. .., -.cllllllatalllll.
.. u 10 rnumza 111I _ 01 GROSS SAl.ES;
(j) T. QIYO wnnon ...... 01 0II'f ..fault 01'" LESSOR'S......... ar 0ClIiQ01I0r10"-'" - pf
'''' LEASE to OII'f__ar ._Il:"'''*1ICINI ar_1 01 11ft -.ar_ot.., --,
on any_at.. LEASE or.. PREMISES (__110m'" LESSOR or 1Iom..,-. llIlka..ar u_
ollha LESSOR) 01 _... LESSEE IIu ....... _ I _ oatault _ _... LESSEI! ID""'" ar_..
he LEASE. QIYO wnnon...... 01 ..., ......... _ban ar _ban ID"" _ ..~n~_, __ ar -
lU1d _ _ _, _, ar _ 30 dO,. to....... _ ar '-'''_ to porlonn aI 01..
......... 01 Iha LESSOR.mar'" _ 01... LEASE. il_ 01 _ _... LEA8lIa ID_"U"'"
II1ll .nact; II1ll
(Il) To _, .. Iha .....ban .11ha tann. ...J.ESSEE'S QOOClIlU1d ,-1Illl.. ~,-
uPlha PREMISES il U QOOCl_lU1d """"""'" u... _maylllin..... _..,_....,101.01... tarmar may..
put ... uw..ttw Iac:ep\ tor reuonaae WHf ano UN.
13, TIu LEASE..... DO __ II1ll ............ID..., _, _ 0I11Wl. _, - and_, -,
or In'foa'W IICUI1CY II!_~,_.I orwnWftl mIOI with or ~ tollf't till*. ........ClDI'T'CJMY. ......c:a'ftPWIY. 0INr
_ ar 1lOIc:nuar _Iha PREMISES, .._, _, __ IUbOnlNban "'1IOI1111\1l1 "" LESSEE'S
__and _t_IfO,.._.lof Iha PREMISES IClIOng U Iha LESSEE lanol iloatault..-... LEASE. Tho LESSEE
___.....LESSORU..__tO.._..,__-"'YID_-_.
In...""''''''''' 01... LESSOR illha PREMiSES..... DOnna_1D lIlll_by.., - - (~by
_pfl_ar_.._ llQ._on_ID..,_,_oIlN01Df_-
.nac:llflQ'" PREMISES, lilby ._inklUoll.........., or (il)by..,--, L!SSII! -_ 10_
......_ _..- aloI'" torma,"""""'lU1d co.4_,.ot... LEASE. and L!SSEI! '*'Il>'/ _.......,
__Iha LESSEI!_ID~' u.. -.I __IIOI.._Iar..,...... ar_
ol...,__..-.g.. LESSOR nor.....__DO_....,_ar_-"" LESSEE
may no.. 0Q00InaI..., _ -.I, -.oonQ .. LESSOR, LESSOlI and LESSEE '*'Il>'/ _Iar ...Ilanollt 01 11ft
__ INt may _liar no.. an ......t on.. PREMiSES....... _ payM* _1lY'" LESSEE_
not be PIlCI tor men INn idlY (&0) cSlytlf'llG'llnCllnd no .._4,41:.\ of 1hI LEASE or..... Dr ...,4nc..bOl, at t:rIe
term, 01 "" LEASE IhII ble::l::rNetllClrtl wrIhCUIlhe pnarwnn,"~o' 1hI.._ ~ ~. pn:MCMd N1lUCftc:onMnt
'I ~Id lntIr 1I'II1ndInO.ft of mangagt.
14, C') n.LESSEI!__lhat...I.ESSOIIIaIlOl..DO-- -"ar_In..,_
_rar...,la_conIlNCtIIlI\or___.....PII!Ml5UIIlll-..._payM*-
_notDO....._ar_by_awaot'In...-...LESSEI!----...P\IEIoISES
f"IQW'e NOW or rtO'l .._.1 at trrt naNN or knd wnmo.. .. awI1N L2SSEE .......,.", *" IIW'efor dnCVy
IQINt 1'llI_.U'KlOl or ........._un 01 IN LESSOR or II'ft oaw WSOR of... PRIMlRI. MIhOUI n"." IIW'IW
IIMI'1I"lO any c:&un e;IIMt the LESSOR. In me event of II'ft dim ar CIIInIIQIIWt.,.... ........- or .....tl-!lr,....
Iha LESSOR _ to _" wnn.. LESSEE.. __ and """-Iha LESSa'S *'"' - -..",.
_aroonncun, at LESSEE'S ""Iand'_. n.USSEE_ 10_'" LESSOlIIar ...,-.
ar coat to _... LESSOR ..... ha>o _ pul on 1Cl_1Il(l wnn... t..ESSU. n. L!SSII!"'" _ IN.
""LESSOR tlnatUCIMIOt~,"arrymll'lW WI~'. fordMlyl ,"h_,~~.aI"QO,llIa .at
Iha PREMISES:
(Dl Ea:n _"""'0"" ....1I.,lCOO'\,rnarnananooar_watl_~CIlICNrVODf lIond...,
oflIIQabanl ar konI _ .....tran: II1ll
Ie' Uponttwf'lOUl'ltat IIthIrDInY. tnloawPl'1YIhII..tc:UtI.~It~' ~lnddlWer..,.,.vt"'Iilo..
recarGIIiIll'lSNNntI OM"O nota of tnrI L!ASE and .,.........__._.1 date of IN LEASl W1dIr ~ 7 ew.ol
and any .- -..... _ may DO ~ to t......1I .., -.....g 01 Iha PII!Ml5U,
la. (.1 Tho LESSEE wl/f'lnlll INI' F_ ~ _ ... LESSEE and OUNIlIH' DON\1Tt
INCORPORATED, 1......10... DUNKIN' DONUTS 8HOI' It on ..,.... and _ and.... fa LEAlIE It Il.ClIact tt
_F'_AQf_t_".._and.......Il_F_~._...rar..,-
tnon .. LESSOR anal _ ... nQIlllD _ he LEASE.
(D) T\la LESSOR'S '.............. anal no..1ha nQIll to __... L!88IE'S 1lIIQIlOI--
,_ at rouanaooo"".1l an on_ _...... GROSSllAL!ll--'IlY"'1.USU ID'" LESSOI
011 In. tnan" GROSS SALIS --by'" _,II1On'" LESSEE_...,.-~ pay ID...LESSOr
0II'f .......... 0WInQ 10 111I LESSOR _.-.... oorract G"OSSllAL!ll. M . - - DO at ...._ 0
Iha LESSOR: _,"" I an on.potban ,_110m'" LlSSEE'S ,-... _, - 01_"'- 0
3
'\
.
~
............ ..
S_1llnt
I'Irw ....
co......,
~Dom'in
D.laull....
T........_
.. ..
__byPlnQIIllIlI'and12Cl1)oI"LlASI."_II..-..,ot__~,onNOIIOSS IlAl.U
,_by" LEISe 01 _ pararlIl2'\).. men, ..... LESSlelhal poy............. LlSSOR lor any_II
.~_. l~wrII1l1'l1f\1P11CDD1\.~.butnatllnlltedto.,.I:IClnItI6I- ,tl."llIInCS.r...UwMU
....., an..., unpaol.......... 0I1ha roll... "'"" on PIfOQfIIlIl ,1(01. _ PO_WIll.......... ~ ID""
_ _ NI.ISSOll may no.. ...- he LlASI. .
(el Tho LlSSOR'S _______ _ no.. ..... I1QIllIO on..... IIla PREMises .t aI ......
It, (.1 LlSSOR may "'q1 any on,...., on lIlII LlAseOl ..., cma, pr_ 11101 no _ ..__ WIll
,_... 0lll0Q01IIlI\I 0'''' LlSSOR.. "'_1Ila LlSSEE'S ..._lU1d QUII'__ 01 Iha PREMises 10
IOnQ u..... LlSSEE is noI on ..,IUlt...- "'" LEASE.....-1Ila prIM...... 01 any noollca_ -ll'f'" LISSIE
,_'" A'_ 0' "... LEASE;
Ibl LESSEE anal not WqI, ~an.'w, mong.QO .. 0......... _ .. ....... 01 11111 LlASI. ..
..., on,...., on"'" LlAse, nor __....",..,.. PREMISES "'..., pan ......,'. ce ulldby 0...., __
Iha LlSSOR'S rr<< _ _ on.... on.1O/lClI, A/I'f OCI 01 on._ _ID dO ..., 01... ""-,out
_ __ noI no.. LlSSOR'S rr<< _ _, _ Po fIlA and _. uoon..., _ _, 0''''''
LlASE, LlSSEE 1/10I __ _1Ila_ ollha ,arm '''1Ila PI~ 0'_ and _lNIQIlO and
I..... porformancoo of aI torma,......... _ ........... _ uno.ullan by IIla LlSSE!.
(el II LESSEI! It. __, Iha _.Iar 01....,.",., 01... iUuoClll1ll OUlItanclIIQ _._ 01
luctlc:orp:nDOn, Grlf LESSElIII Ql. /il_4I .... 1M nna'. at lma,amy of IhI tOUII merest '" 1UCft..- ~_._. ~
,-,~. and wnetrw'., 11I1QII trInIK1IOn ClI' Il'\ aMnII of .....11d or UlYllatICI ~.1hII be ~ In
......- 01 .. LIAS!.
'7, Tha LlSSOR _ _... LlSSEl! _'Iha PREMiSES....., pan _..... ce dMnaQIClby""
.. _, ... LESSOR... _ _ _ ...""..., .hw...... 01 ... onUIllCll ___lrom
...1Ira.. _,10.......... PREMISES to 1UOIlan\lll'f"''''''' """"""'" u rr<< to.........,. bIInQ"'-'
smod And IQr'IlIId Nt If IN COlI at IfW rnunaon ..ceIdI the ImOI.I'II of tnIIlftIlIlIU tIlCDVWY. aw LESIEI WII PlY
the LISSOR tar IUCtIIlCXItICInII COlt cn:r to F'lttcnaan. ThI LlSSE! ~ trlat uw. anal be no IDa*"'"' n rwn
pondonQ m...._ of ... PREMISES and 11101 ... LlSSEE llUMQ .. tarm 0' tIUI LlASE _ ~ on .. ldrCIlI1ll
'''1Id IGICNIII 'BUInIM ImWnICftIQn InU'WlC8' ntunng InI operlaon at N DUNKIN' DONUTS SHOP IQU\I' IOSI
.. rlamaQIby lira .. _, II Iha PR!MISES 110 dMnaQIClby lira.. _llUMQ NlUt _13) Y'''' 01 ...
.ann of "... LEASI! lU1d _ rlamaQI"_ ftfly _IWlloI 01... .. ~ ._ ollha PREMISES, IIla LIS-
SOR may -"by f'oOlalD Iha Lissa"""," IIXl'flto) dlyaot.......".. 01'" rlamaQI, noI'O ,nloll" PREMISES
II1ll may ......... ... LIASI.
'8. In _... PREMiSES....., pan _ anal.. .....by Iha .._ ot.....11QIll 01 amonant oomaon,
.-.. LlSSEE 1/10I no..... _ to 'armona"'" LEASE, ...........1OllonQ II 01_ CNIraCtOf U to _
pr..... ... LlSSE! lrom CIlIllOlC:llIlQ" LlSSll'S bUaonIU U __II1ll........ _ _ ..... ba m_
Ma.nIlXI'f(to)dIya 01 _1OllonQ.1t IlIIIUw 0QfIC ""'t........., anal ce_lD_out 01",., 'WIIll.'ymon.
I..... ......... 01__ ._by It. '0 ,It _lU1d 1lQNI, LlSSEE"...,., UIlQIlI to LlSSOR II 0' ..
ngftt. tnII and lnW'nt n Ind to IIf'/ ClClr'GIn'I'\IibOn IWInS DlYac.1O L!SSE! by thIt .....4loo,."'''tI1UIhOnIY u CIIT\IQft
1..1ha __.. _1OllonQ 01 Iha n...._1Id on LlSSEE by he LlASl.IoJ _ __ _ out 01. com-
""'''_lOllonQot ...PREMISES _OfIoua_byUSSEI_ID_ LlSSEEIaIaQOlly_OIlClUdlnQ,
......... lIMa_, _ ._1I1ll0~ I.. ..__ 01 LlSSEE'S lluaonnI,..... ce.... to LlSSEE.
11, ('1 Inlha__...LlSSEE ___or mall. an u__'..lhablnaftto'.....
.,cn,...._on__lIllIoclbyIllaLlSSEE,.._._..llIoclagUll1I11ll_..lDbyIllaLlSSEE.
.... noI_ _ tlWl'fl3O) dIya, .." ... LlSSEE Ia _t... _1I1ll" .lloIln -"/ or.__
0IIdlnQ tot tnI "" I~._.l of. ~ of tn. LESSEE 01 0"" Q.I:ItQdIIn tel" N LE.SSEI'S buIr-.a Of UMllII NId
and con-...4 to by'" LESSEE It'd "not GllIT'Is* WItnln Uwty13O)dIyt. CI' I ~OI OUWcuatodlll'l tllQpOI1tld.
0111.... .". fat......_'tIan wnI'I cno1Ot1 undW any state or,...... '&w ~ bll1lUM1d by 0II1Q1lI'l1' the LES-
SEE......... _....- _ 01 111. LlSSEE anal ce _ .hwlovy _by",., _, monllal.. c:on-
1I11l11,Ihan '-'.. """ .__ 01 ..., 0' .... lVonll, ... LlSSEl! _.. _ 10 .. on...IUt...-.... LEASE
and II nQIlla oramarS 10 Iha LlSSEE horaunoar onll cnar_ _ ......... ..., _ ,.. f'oOla 10 .. LlSSEE
II1ll ... LEASI! ..... _ ce ,.......,...
lb) Tha LlSSEI! 1/10I" "'auIt ...- "'" LlASE:
III II "" LlSSEE r..., ........ or IlOQIOCIt 10 pay IlfOI'llll1I't 10 ... LlsseR ",., __ _ to
Iha LESSOR an Iha .... -. payrnonlll ....;
(2) llIhaLlSSEEI...tolUlml__........._dO.._...LlSSOR_unoar
... LIAS!: ..
131 IlIha LlSSEl! r"'lD COlf'/ out on ~........",., _ O'Iha L!5SU:'! ClllIIQatlonI ard_
.....unoar...LEASE......-.".,_t~.ptllflllIlOI"/....,--_..__
.........., .<<_ ... DUNKIN' DONUTS SHOP 10 _ ... LlSSU: 10 ....., "'by _ ... LISSEI! Ie -.
(e) lllha LESSEI! ''''10 pay to UESSOR _ dUll",., paymanl1_ unoar INa LlASE,Iha IJ!S.
SEE _lDpay .._.....,.......- ._'1_ _......t an..._ _at '11% par........
or 1M l'I9'IIl p.o. ....... ,... In mcnon to IhI ""* &mOI..f'I1I.
Ill) IlIha LlSSEE 1/10I be on dOllUII...- PIfOQfIIlIl InXll 01... LEASE and -. dlllUlt _ not
........ _.... (10) "\'0 .h.. _ ClI. _ NobCe to Cure ......,lnlm.. LlSSOR, Ihan, on __ to II
0_ _II low ..on-"/,... LlSSOR may _'My ,armona"'" LIAS!. In ..... _ 01 ...,O_da'lUII
ll'f LlSSEE unoar Iha tarmo 01 ... LEASE. and _ "'IUII 1/10I not ce ...... _ tIWI'f (30) dIya .l1Ir _ 01
"""'" NobCeID Cure _lrom... LESSOR,Ihan, on _ID aI_.- at law.. on -,,/,Iha LlSSOR
may~ _10... LlASl.IlIha LESSOR naa_ID...1.ESSEE _ __ _0'_
....... ..,..... on.. _of ,.. OOr"-" 01 BASE RENT.. PERCENTAGE RENT In..., LlASE YI!AA, LlSSOR-.
.l1Ir 1/10I no IonQIr ce _ dunng'" _01 Iha larm 01"... LEASE to _... LlSSEE",., ___ wnnan
_IOCure _..........- _ling'" LEASI!. Tarmona_ot"... LEASE __ anal - .<<......
_'My '-' ... dolO 01 _ 01 . wnnan _ 0' Tarmona!llll\ by ... LlSSEE.
I') Upon 11ft __ 01 ... LEASE.1ha LESSOR may _ upon ... PREMISES and_
........., and.....1ha LlSSEE_~......--g...-., _bIInQ QUOI'f 01 ",.,_01......., and"'-"
IlfOIUllIOIIO"", _ _ mqIt =- ba UIarl tor... _ oI..1au1 on ........In... cua 01 ..., ,ucn
,..........". ... LESSEI!'" ~... LESSOR OQUlIlal _........ _by""'" ollha 'armona_,
""'*"""lI- 0'''''- _ ___"... 0___ paylllll _,..... ___ 01 Iha """ narS.ucn tar.
_ not -.rrw. and
(~~"""fJI~I'lIrW\GQnl.,..gupanar~vw' "fll"~'''.~'.'''t_., "'.._ Iy.t
..__ _..-.._IllA-....-D1-V-......-
--, ......
20. Aa _ tor... f.""lI.I par1onMnOaolll ol... LDSU'S .lI'g .... undarll1llLIAII. ...WSD
t.,.or QnOrlla 10'" WSOll..... UClIlIIaI...- 01 ... ~ now.. _nor - __... "'lMIIU. "
...~___.._'"IhaPII!MISU.....,___..IIU_IO......,....any.......
n"paynwwot any _,ClarNQO"_ payIY*lIO __'by 111II WlE.IhaLESSOIIrnay __... "'!M-
lSD. tJt tea.........v..... take pGf.......,., of 1101""" Of '" L.US!I'S prQPIrty, nIIMIIItlIeOl.j.._.lt~
_ may 1011111I any pan 01 _...-" llIUIlIoClII_ ....11I_ -. - -,-
by law, 10 Iha rq.l_ tor -. and may llIlI1YOy 1ltII_. en DaNIf of IN LE5SE!. II ollha LUlU'S.
lI1ll.....t........- aotd ID tna IloQIlOat _, Tlla..- 01 Iha.... of......- - Do _ by tna
LlSSOR lOWlI'lIlha COlI ollha _1ltII_ _Iha payrnonl of 11....._ CluIby Iha LUlU ID ... LUIOR
undar......... 01 hi LV.SE.In.....1O _...I.ESS!E 10"""'" pun;I\UO 01 -""" ID Do ---
... PR!MIS!S,IN LlSSOII_ ..--......, and alllI rlQIIlO ....... ID'" .... - grantarl by L!55EL
to IN"" QfOIlI" by" LlSSEE 'Olltt IIW1Iponyon_. .WI1lllhalll\QlNlpun;l\UOof-".....-
...." OQIOprnam 1111'" _ UIlIlII tna PREMISES dunng Iha tarm 01 111II LV.SE.
__ f.. 2'. AlronlIi paymon1:l aro to Do mada 10 Iha LlSSOR.. POI' 0tIlc0 Boa 317, R
1I_.nd 023I1,ATTN: RontCon\nll Dae._ b,....t _ ...,____'ID DoQIV Do IOntby_
_ ~ mallto..LESSOR..PoolOtllcoIloa3'7,R_, ,:VlaI_-fNnoI..........
__ \.;... o__utnaL!SSOl\may ""_lDtna~by_maL""'-
, rOQUnd 10 III ba 101I\ by.....lD... LlSSEE at.. _......... on P~ 2_
_ u... LESSEE may ""'" ""'" ID ""'" _ on _10.. LESSOR by _ maL
22. Dna.............. 01 any oowanant,"""""" ..._._.__.....noIDo_.
._ot.lurII1Or_otlha....._....".",.....-,_....otany--_..-
......lU1d 11'II_ .. _II by Iha WSQR 10 III 01 ",,"'by Iha WSEE -"'lI'" L!SIOII'S -
01 apcnwtIIlftII not be 0IImId to w.. or"'" \0._ ....., 1M LESSOR'S ~ or ~ ID 11ft .~.....
"""acIbylha LlSSEE, __byLlSSOR ot_.......payIY*lIO.........- .goollha_by LUlU;
01 ...,.......",01... LV.SE..... noI ba_.w_oI...... _. ~ u."""",,,'" """'..... WI!,
_pony_Do_ID..._pony,..ID...,.......company(by way 01__11I wU"'_I_
Iha"'" pony, tor..., IOU.. _ to..., _, .........11I_ tanQIOII",-,III_"- -....
__..wo.. _, ._-.gn ......_.._f!'09I1___bylha........,..... 01_
pany.dJ lQIf"ItIor~. EKf1P111YdOItlWWtrywlIW1n8I bY'twY"lnY' 1CDCln..... J lQarcc:unWMnanll"lO
OUI 01 OI_arl on 11ft w.y........ LEASE 01" LESSEE'S __ 01" PREMISES. LlSSEE.IOInMlt 011O
an _ ot aI_ _by,lI'IOUQfIOIundarLESSEE,ID'" ~.lltOnt __by Iaw,__ w....
_.....- aI rlQIIlO 01_,........, 1I1ll100,.. -..... 01... PREMISES undar...,........ 01 tU\\n......
23. (') AI_,..._.II,_,dll"....lU1d~_.....I.EAS!-_lDand
Do IlonClonQ UIlIlII..IIQOI'....--, ..-....1I1ll_of..._ --,
(01 ThI. LlASE .....Dovoodll1ll 01 no oft...".,..ussQR _ Do ,,-1D_1ha - par-
1MI,IanMI and approvlll tram II putlIC ~ far CD'lIII'UCDCII'\ II'Id dI.A-14II.1 of 1N PA!M!SES In w:::c:orGAnCe
.....tna 0l0l plan _...". _ .....Ilca-. dO. ~ " for... "'EMISES.1n _........., - _by tna
LESSEE _ba _taly..........by LESSOR _.._.....Do - 01 aI"aIlIIga",,",,_.
'..
"
....,
-
w......
r.u_.
Ie) NolmQ_on ...LlASE....._...LESSORnllftway...-, joilt~OI"""
0lI" ..... .. LESSEE In .. ......tIIlII ollha PREMISES 01 _ .. L!SSOI\ 10 ..., aIlIIga""",,, IOU, cN/VO 01
,''-" on _......., _ 01 anIInQ from 1110....._ ot Iha PREMISES, _ II flaraby _ID aI _ rt may
_ol""~.
IN WITNESS WHEREOF,Iha _ _ _ 110" _0 "'" _lU1d _... day and _lirIl__.
W, John & Shirley H. Ch..tnut (LESSOR}
~~.~.........
BYW,Il!.:..~.....,.
W.~h8stnut
A~4l.?l:..f.~f..
Shirley H. Che.tnut
5oQnarl, ...... II1ll __ on 1110 prnonoo 01:
~~..!J~~r""."""'"''
., ,If,4...h.UL,.,,, .....", ,.,.. ,......"....,."
Wttntll
5oQnarl, _1I1ll_ on tna..- 01:
~t.f~l!1..c:~AU,...."...,.,..,
Shirley~. Che.tn~' Secretary
..........."......... .....................................
W.....
..................,.....................
-.
5
CHESTNUT ENTERPRISES INC. (L!SSEE
~~~/i.4..,~:.,.~:::::
w.~~e.tnut Pre.ident
g//.'4:..!?J.:,AtfA' /~~.
Shl~Ch..tn~~'"
...............................................
I"""
DIJI~",N' DONUTS INCORPORATED
.~
"..
FRANCHISE OWNER
DEVELOPMENT AGREEMENT
AN AGREEMENT dlt" 'hi. ~..y ot /2N:/ " ,gUo by _ ba_
DUNKIN' DONUTS INCORPORATED,' DoIawlf'eo<pOl'ltlOn wru;- _otncn It 1 C P..... Pill< DrIv'. P,O, 80.317,
RancIoIpl1, MA 02368 (horoon.llar'h. "Cornpany"l_ CHESTNUT ENTERPRISES. tNC.
. Pennsvlvania With pnnopalotrlcel I' c/o Dunkin' Donut.. 1186 HllIrt1.<IIhur.. Pika
C.rli.l.. PA , 17013
lhorlinallar '110 'UndenlQnarl1,
RECITALS
.... Tho UndarIIQnarll. ...Irou. 01 davllOponQ . Dunkin' oanu,. Shop an . .- or lot 01 land Iocatad .1
930 WalnuUottolD Ro.d. Cadillo, PA 17013 ~ltarlha'lllta"),
Tho parUoo acIcnowIarlQa IIlIt II1It _t cantompla'" IIlIt _ tna UndarIIQnarlln_ Iha Company ID Iha
SIIa or Iha Company InIrOCluCarl tna UndarIIQnarllO IIla SIll, u Iha cua may ba.
B, Tho Company It -.g 10 _ thi SIt. lor -.y u. OtolkJn'llcnJla Shop location and, "__,
10 ~ 10 IIla UndarIIQnarl._II'O oparall. DunIdn'llcnJla Shop an Iha SIll, ptPYlclad IIlatlha U..........d
maat('1 .. 01 Iha Company'1 qualillcatlon. _ flIqIiramanlllor now, or II ___,., rnU1kJnII _ ownara,
C. ThlI Agroaman.1hIIl onumarall'ha ",_ relponllbdllJOl ollila parUoo Wllll relpoct '0 IIla UOOaralQnarl
undortaIOOQ 10 _ . Dunkin' oanull Shop an tna Sill,
"\
AGREEMEN'TS
In conSideratIOn of the Ianni. covenant. and conditions hereinafter 111 tann, the Undersigned and thl COrnpMy
hereby _ u 10II0wI:
_II AIIIIIO..I 01 tho 8Ila
I. TI1a Un<IoniQnarllhould retain an .nornoy _ o1har .llviIora In connaction Wllll flIQOIlIIlJnQ IIla IIOllIiIItIan and
dI.~.OIIIIl1t ot the Site real lltate, In addItkln tD rev6IwWlO III agreements With the Company. The Company UII.IM8
no lability or obllQ.tIon '0 IIla UOOaralQnarl or '0 any Ihird party lor..., _'InCa In f1OQOllallon II1a com...., may_
'0_. A11houQh IIlaCompany mly c:onmon' an IIla UndanlQnarl'. rell n.... flIQOIlIIlIona,..., _'_11""'-
10 Iha Un<IoniQnarll. no .ublutUl.lor IIla _ ol.........on' c:oun..., Tho Company'" noI oct u agent, omployaa
or lIduclary of II1a Undaralgnarllor tho purposa 01 ..1I11JnQ IIla UOOaralQnarlIn flIQOIlIIlIona,
2, Tho dovalopmon' 01 111. pr...... SII. .1 . Dunkin' Donutl Shop mUlt be .pproYarl by IIla Company'.
Obelopment Otvision and FInance COIM'IUH. .s evidenced IOIeIy by wnnen notiCe IIf'It to the UnderaignId by U.
appropt1Itl Director or Va President 01 Development (tne .SIlI Approval Notice1- Any real estall ~1.,lltmlrlll that
Iha UndarIignarl m.y mall. mult ba .ubjocl to: (') IIla Un<IoniQnarl obllinlnQ Iha Comp...,'. wrIIIon _II 01 Iha
d............t by IIla Undaralgnarl 01 a Dunl<In' Donutl Shop an Iha SIlO; Ibllha UOOaralQnarl obtainInQ II .-..ary
,*""", __ local QOVarnmon'lIlP\>fOVlIo; _ Icl'uch 0_ canllngtnCiol U Iha UOOaralQnarl'..nomay may
,,,,,,',_id. Tho UOOaralQnarl W1II_ tna Company Wllll a copy 01 any.... or Iaua lor Iha SI'., wilhln tan (10)
dIya .lIer II1a "0C\I1Ion _ doliYary tharaot '0 Iha UndenJQnarl,
3. WIIhIn ...ty (60) dayo .lIer Iho d.1I 01 'hi. A_', Iho company ... undartOk. . pralInlInaJy r_ of Iha
51.._ notify Iha Undl<llQnarl _'hor IIla SIll can'orm. '0 balle, prlfiminary en'.... ollila Company (1110 ~
Site Revtew Len.". In the event tne Site does not meet such cntena. the Company W1I prornpUy refund the frMc::tiIe
......., wl1oraupon ,n. Franchi... Agroomon, and III ollho panJe., rlQhtl and obllQI..... ~.haI caua and
,.pn.
(, II, .lIer _ ollila ~ SIll R_lotler,1Ila UndarIIQnarl_II'O _ with ............'_..,
. OtolkJn' Donut. Shop an 1110 SIll, IIla UndenJQnarl must promplly IiQn _ ra1Um 10 Iha Company . copy ., Iha
Pr-.y 51'. R_loner and mult prompIIy hlra . _ archi'lCI whoIa mponlMty ..... ba lij 10 aclapt Iha
Company'. QOI1OhC p/In.lI1ll.ptQlIcalJan.'0 Iho .ptQlIe _. ollila 51",1ha QOOIlfIIlhlcII_1n whicIIlha
SIIa It Ioca,,, and tna bulldinQ COda. II1ll ordinances parllnon"o Iha SI'., (Ii) to....... tna can_I ",,",..,..IIon.,
cana1rUC1lon 0"110 Dunkin' llcnJla Shop on tna SlI., and 1~11UCh 0_ CIutin .1 1110 UndenlQnarI may raqun. Tho
UndarIlQnad'l archi'lCI mull promp,Iy....,. tDl>OQflpniCIIll1ll boundary .urvoy ollila S;'._ .UCh ... borlnQa_
.- _ 11111 .. '110 company'. ean.\rUCtlIlII Dopottnent _ IIla Undaralgnarl'. IUchlllCl may raqun
~1I.._11y IIla'Rspon.,. ,
5, Appro_Illy II*ty 13O)"yo .lIer IIla UndarllQnod roturnl"iQnarl copy ollila Profimlnary SI.. R_ LatIar,
..........Ilva. ollila Company'. R.II Ell". Depanmen' and ean.uuctm DopsrImont W1I ,,*,.t IIla SIto with Iha
UOOaralQnarl_ IIla UnclarIlQnarl'. archillCl to .,lIu". '110 SI,,'or __11_ to .1I1b1i1ll and coonlIna,.1ha
rnpecUve rnponllblMtles 01 each of the Plltiel With respect to development 01 . DunkI'I' Donuts Shop on U. SIte
(harainafler IIla 'Rllponllbdity MMbnQl. TI1a Rsponl and _ 01 zanOlQ _. _ by"'wa opplIcabla to Iha
SlI.muI' ba bnluQh'byllla UnclarIlQnarl'. archillCl'O IIla RIIllIlI\Iobdlty Moa'lng,lor IIla Company'. _,In lhaavant
..., IUCh Rsponl or IIla Un.ar..gnocl'. orcr.'lCIlIO no, av_ when roquIrod, lhon IIla RHIlIlI\llbillty Maattng _
be postpOned and. If appticabIl. thl Company's OUI-oI.pockll COslS lor representabVH to anend Ihd be retmbI.nId
by IIla Undaralgnarl Wl,n;n Ion (10) d.y. .lIer .emand.
8. In the event the R..ponsIbIMty MeellOO II postponed becaua lither the Undlmgnlcfl arcNtect or any of the
Ropona la not av_ when ,_, tna Company .".. nova tna ngn', at .. _ di...._
(I) to order sUCh R8PQr1s II the COmpany IhaII deem necessary tor Its rlYiew 01 the Sltl. The COIl of -...ch
Rsponl III.. ba """"""... by 1110 Unclonognocl, w.'"'" Ion 1101 .'YO .11.. .emand, TI1a Company mUM no
representatiOn or warranty abOUt the comPleteness or accuracy of any Report oruered by the Company on bIhatI of the
lhlaraIQnarl: II1lllor
(b) to reschedute the ResponSIbIlity Meetng. based upon . linn conmtment from the UnderIlgned'. ..mtt8ct
that the ItdltICt wier Reports 'NIl be Iv8llable Within no more than thlrty (30) adCtlOnII days: lfttJ/or
(e) 10 te"nwulIl this Agreement and the Franc:htH Agreement. II, in the good faith tudgmenl 01 lhe COrnpIny,IhI
U~ 1'\11 tilled 10 'XerClS' reasonable d!tlgInc. to c:ompty With the term. at this AQtHment. In the event oIlUCtI
tlmW\llbon. the Underl9*l WIll too.' the 'r&ncnlse d.poSIt.
l
DllllA 01/1I
PC.ill!..
't .nUl. 5150
- "*1Y (301 day. ahorlha Rnpon_1y MaatinQ...... ~ Iha ~ Will noaly'" ~ oIlla
lInII_1I (Iha 'SI.. ApproyOl Noucel or ",_II ot Iha SI,., In Iha avant Iha Sltalt ~,Iha ~
... pIIlIIlpIly IIIund tha 'rancIll.. _t, w_ IIla F,onc:n.. ~ and .. 01 Iha _' f1I1lta and
obIgIUOnI thIrMInaw .".. ce... and '.pn.
7, Tho ~'. _. ollha SIt. II not a _tIon or a wlIITOIllV tI1at Iha OIndn' Donuta 8I1op Will be
prtll\1abIa or IIlat IhOC> _ WilI_ _ _.It maroIy maana IIlat Iha _ _ "'*"Iha c:on.,.,y
hun_,orlclanUlylng _lor........llIJnIM' Donuta llhopahave-' mot. -1hOC>........._,11a
not a...... _,Iha llnclarIIQnarI_lhat Iha Company'. _01 or ~ oIa do........." _ not
"'-..., IIobiIIly or Dl>IIQaIlon an 1110 Company, Tho _'0 accept or rajact a...-1hOC> ....aIopo,~,11a Iha
1JndaniQnod'., .ubjact '0 IIla Company'. IInaI _01, PralimNry 0JlllnlYIl 01 Iha SI.. by ..., Ioc:aI or rogIonal
_1IYa(') ollha Company I. not c:onc:IuIiva or bIndinQ, _ ""* '_"I~"'1iona may ba........by Iha
Company.
8. The Company', approval of the Sit. for d..llopmenl I. . DL6Iki'I' Donut. Shop tt IUbfect 10 the Company',
_01 01 IIla UnclarIlQnod'a qUlioflCOtlon to 0Cl1ain a Dunkln' Danull _.. lor IIla SUa, a. _hor lit lor1It,
hcdon II: Appro.,.. of the Underalgned
1. Tho UnclarIlQnaIl'. qUlioficatlon.,o OCltaon a Dunkin' DanuI"ranc:nIoa or,lllIla U~ It II<aarly a OIndn'
Donuta Franc:nIoaO_, lor a'_ II a _t _, mult ba IPIIIOYarl in wntInQ by 1110 Company'. F_
- M""-or D1ractor.1n Iha .vont IIla Company di_1ha qUIioficatlon. ollha U~, Wl1hi1l1xty(lIO)
...,. ollha.... 0111111 ~t, 1110 COmpany W1IIpromplly ralund Iha 1JndaniQnod'. _.. -,,-.upon
Iha F_ AQraarnont lU1d .. ollila _' rtQI1l1 and Dl>IIQatlana _ _..... and axpirw,
2. Tho Company'. _II 01 IIla UndarIlQIwd It nol a _tIon or warranty IIlaI Iha Uoldarlillooacl wiI ba.
_IUDunkIn'DanuI.,rancIll.._,ltmaratymaanollla'lha_cnt....whlchIhaCompanyhun_
lor qualilylng Ita 1lfOI_ Iranc:I1iIa ownara have -. mat. ThoOUCCOUIU operation 01 a DunkIn' Donuta 8I1op II
dapondon, UIlIlII'ha conhntJou., ongoinQ 1i<JI, .non. and ~-.tIon ollha _.. _, 0I1lIlIIQ many factora,
AcoonlIngty, IIla UnclaralQnod ._ "'Ollila Company'. _II or ",_01 01 1110 UnclarIJgnad IhaI not "'-
..., IaIlIIiIy or Dl>IIQatlon an IIla company.
SectIon III. e.ecutton of Document.
1. SlmUtaneoutly Wltn the .lC8CUllOn of this Agreement. the Undersigned has executed and deiventd 10 the
Company, In II1pllcata, the Dunkin' Donuts FrancniH Agreement for the Sill.
2. Tho UnclarIJgnad IhaI e.ecute .uch olhar clocumonll lU1d _" as IU1I eus'omanIy raquirad by Iha
~ In IUCII _lanCe., Including, illllllfOlina", a e_form 01 mutual COlI _ty Wi1h .. _
.......,~olhIpa, _lU1d/or corporallOns 1Ila1....... olhar DunkIn' Donuta llhopa In wl1Ic:I1l1la U/1llar19larl (or
any one a. them) nave or has an interest.
3. To ensure the conooued Ivailabdity 01 the SlII.s . DunJdn' Donuts Shop, In the event the FrancNle ~
or, illllllfOlina'"1110 UnderoiQnarl'. Ie... 01 ,h. Site -..... be In do'....' durtnQ IIla larm tharaol,lIla ~
wiI_ IIla rlQht '0 a.sumo Iha UnclarIigned'.Ie..., if IIle UnclarIiQnad 1e....1ha SIlO lrom _,1I1Ila U~
owns the Sitl. the Company WlII have tne l1Qht to lease the snl on negotiated lerms comparable 10 those l.I1dw which
Iha Company Ie.... comParable IlfOpeny lrom oll1arl, AQroamonl. accap.- '0 IIla COmpany conftrmk1Q IhaIa riQI1la
must be Iigned prIOr 10 the conmencemenl of conslructlOn 01 the DuMin' Donuts Shop on the Slle.
4, The Undersigned, Including all successor(s) or aSSign(s). as Franchise Owner. and the ownerol thl Sill real....l.
must agree to compIetl de-idenllrlcallon ollhe Intenor and ,xleriOr 01 tne Dunkin' DonuIS Shop. upon the Company'I
request. I' the Franchise Agreemenl expns or IS Iemw.aled lor any reason. Such d&-tdenllflcatlon IS 10 be cornpeted
01 no ..pen.. 10 IIla Company and WIthin Ihir1y (3010ay. ahor e.piratlon or lorminellon ollila Fr_ AQraemonl.
SectIon IV: Financing
1, Prior to thecommencement or construction 0' the Dunkin' Donuts Shop on the Sltl, the Und....igned IhdpnMde
evidence aaUSfactory 10 lhe Company Ihal casn and/or ftnanclng II In place. sufficient 10 rund completion 01 construcl6Dn
and purchase at necessary equipmenl and Signs. DUNeln' Donuts aslUmes no obfigatlon to guarant.. tINt funding or
IInIncinQ ollila Unders........ con.\nlCIJOn 1lf018Cl.
2. The Company will nol guarantee the Undersigned's mongage. lease or otner real IStlte related ObIIgadonl. It
IIla Company, el i'. _, linanca. or QUMan'... lne linanclng 01 IIla UnclarIJgnad'. pun:hua 01 or leuing 01
oquIpmant and/or '1Qn., IIla _ ollila Site IIl1a""" mull e_1Ila1 Iha aqulpnon\ 1I1ll1lgn.1U1I not ftxturn (pori
ollha raaJty) and mull weiva..., and aIllnloresl In IIla aqulpmont _,or 1lgns,In tI1ls _,1Ila _ ollha SIIa
raI..tltl mustsiOn sUCh other reasonabMt documents as are CUSlomanly required by the Compeny.
Sectton V: Development 0' the Dunkin' Donut. Shop
1. The Dunkin' Donuts shop musl be deYtIoped and constructed In stnct accordance With the Company's currMt
- .Iand...., _', plan., Specification. and clocumon'etion (_hor coIIoctIveIy II1a "RequiramanIa').
2. The Company assumes no responSibdily lor evlluatlOn 01 lhe Site'. tOil 'or loxic or hazardoua lubltanclIa, or
lori'\lpection 0' any structure on lhe 5111 lor asbeStos or otner toXjQ or hazardous materials. II Is the UndIrI6gned'llOII
.......-rv '0 Ob'ain IOlItlactory ....once and/or uourancae IIlaI IIla SI"IlU1d any.lnlCturas 1I1eraon)1U1I "" from
env..OlIIlI._,lal hullCll.
3. Prior to the comme._,~1 01 CDnIIrUCIIon 01 the Oriln' Donutl Shop on the Slle.the p(ana and lpedfk:adl:lN
--- by IIla U~'. erdlitact mu.. ba raviIwarlby IIla Company'. eon._ llopartmam and IPIIIOYarl
forClllmpllonca WlIIl '110 Company', dollgn R_".
4, Tho company'. Can.\nlCIJOn Oepartman'IhaI ha.. '110 rtQI11 01 onby upon Iha Si.. a' .. limn, '0 InIJllClIha
- in _.. for IIla _ 01 onounng IIlat .. RlQUllarnonlllU1l bainQ mal, Tho Company'a CanoInlCtlan
ManaQar WII not act as an on:ro'act or 0Q0nl ollila UncleniQnarl. Tho CanoInlCtlan ~. dutIn 1U1I_1OIIIy
10 IIflOUr1ng 1Ila'lIla Company'. R_IO IU1I mat an Iha Sill. Tho ~ IhaI not raIy IJIlIlI\ ..., oplnIana
a_ by IhaCanoInlCtlan M""-f8QlfdinQalllJCtUfllln18Qflty, IOII1y or....._ _,lll*llngcexlla
or _ or olhar man... proparty Wl1hi11ha fOIpclnIjbIIty 01 Iha UnclaraiQnarl'. erdlitact, Tho Company__
no IaIllIty or rOlpon_1y lor erdlitacturll or 1l1Qll_.1Q /UdQmInt. _Iha _ 01 Iha CanoInlCtlan M~.
...... dutIn.
2_
5, BaIoraIhaIhopIt_,oJt::l'lhalJndonlQnarlmuat_IhaCon1>My,.lu.lloflha_
01 Iha 1luIclk1g, Ill. improyamanla and Iand_ lU1d Iha il.....""" 01 aI IIQna and -. Tho Con1>My'.
-- 01 CIIlIII_ ollila DunkJn' Donut. Shop is f101 . _""" or. WIIfIInty lhat Iha Dunkin' Donuta Shop
hu_CIIlIIItruclarlin__ ...,arcnrtlC1urllorlOlQlo_...._ fordollQnorWDltuTlanahlp.11 mnty
....tIIallhaCompanyIa lllIallocllhatlha""""",",, __ """'" IhaCon1>Myhu.._,or_.....,
oId11iQn and layout hlw - mot, Tho UnclniQnad _ tIIallhaCon1>My'. __ ot_oIlha llIoolcil'
Donuta Shop IhOl not....... any llablllyor 0ClllQa""" upon 1110 Company, Tho U_IiQo..d _ _1Ila1.. h_
and rail n...._""" fIlUIl ba _10 _ aI ilIlIaI.._1O nlUIt ba'-'" by Iha Con1>My boknlha
DIncil' Donuta Shop It _.
Iecdon VI: a..... Pravtllon.
" Tho IJndonlQnarl haIIby repreHn,. t. 1110 Company lhallha UnclarIiQnarl ... hi.. Iha IoIowinQ ralallonllip wItIt
the owner or IIncbtI of the Sitl (ptace an -x- In me approprtate boxl:
o 1110 SilO WllI ba DWnarlby an indopondont Ihlrd pony Ian<l1ord wl'h _1110 Undor>lQnarl WIll nollhll1l or maintain
Ilty cammon PIt1nIr. Ihlllhokler, otncer. dlllCtOl", trust... benefldaty, family member or other Internl; or
n Iha SilO WllI ba ownod by . Ihlrd party landlord willl """'" 1110 UndarIiQnarl rillhII1I or maln'lIn . common
-, -. 0_, ._or, tru'IN, banollclaly.llUI1lIy _ or O_ilt....t; or
o Iha SilO WllI ba - by . _""", trusl, ...",.,.,.. or 0_1nIIty _ by Iha UnclarIiQnarl; or
o Iha SIt. ... ba - by Iha ..... onlJ1y thOt "'.lCOCUI.1ha Dunkil' Donuta Fnn:hIH AQraaman1.
Tho UnclarIiQnarllhOl Il'IlI\1IlUy _ 1110 Company II II1ara I. ony chOnQa, wha_, il Iha ralallonllip
_"'abova,
2. ThIt Agreement does not conStitute the Underalgned an agent. legal repr,sentatlve, join1 venturer. Partner.
lImI*>yoa or lOIVan, ollha Company lor any purpo.. whallOlVOr; 1110 UndanlQnarllhal ba an"""""", can_
and II In no WIY IUthOnZId to make any COI1trac1. aoreemtnl. warranty or resntentatlCln on behalf of the Company or
to CfHtl any ObIlgatiOn. Ixprn, or Irl'Ipbed, on behalf ollhe Company. The parties agree thai this Agreement doll not
crutl I hduclary relltion.nJp between the Company and the Undersigned.
3. Uoo. no arcunatancel shalt thl Company be liable for any act, omIllkx1. debt or any other obtigation of the
UnclarIiQnarl, Tho UndarIiQnarllhallndlO...dy and .... Iha Cclmpany hann1n. OQainI' ..., IUCh d&Im _1110 coat 01
dolandlnQ OQainI'IUCh d&Im. anlinQ diroct!y or Indiract1y horn, or n. rnul1 01, or il COl.IIC..., willl,lha UnclarIiQnarl'.
""......~".,. Dunkin' Donut. Shop an 1110 SilO,
4, No lliIura ollila Company to ..on:i.. any _ rosarvod '0 j, _, or to illllt upon .trlc1comp1ance by
. the IJndonlQnarl with any DbIIgatlon or condition hereunder. and no QJ,tom 01' practice 01 the PIIUIIIn variance With the
tlfml hIntol. shII constttull a wIlY" of the Company'. Oght to demand strict compMance With the terms hereof. WaJvw
by Iha Company 01 ..., _ dollUl' by IIla Underalgned IhIIl not .ftlC1 or irnpaillho Company'. rlght _ rnlllCl
to any SUbsequent default 01 the lime or of a dlfferent nature.
a. AI nollal. _., IIhall be .oliv.... .. '."onh In paraQllph 13 ollho Frandli.. AQfIIOnIn'.
8. ThiI Agreement. and the dOCUments relerred to herein ahaII be the entire. lua and complete agreement between
1M Company and the UnderllQ1MKI concemtng the IUbjBCt mailer hereot, and lupersedU all prior agreements. no au.
reprnentabOl"l hamg Induced the Undlrligned to ._acute this Agreement: and there 118 no representatlOnl.
Inducements. promises or agreements. orat or Otherwise. between the partin not embodied herein, WhIch are of any force
Of '''eel With reference to this Agreement or otherwise. No amendment. Change or Yal1ance from this AQreemeriIIhII
ba -.g an IOII1ar party _so ..ecuted In wnlilQ, Elld1I1Ctlon, pllft, ,..", lU1d provlllan 01 Ihl. Agraomon'IhaI ba
COI1Iidentd severable. and it, for any reason. any 1ICtIOn. part, term or provision herein is determined 10 be Invalid and
contrary to. or II conftlct With. any elUsting or tutur, law or regulaUon at a court or agency haVing vdd JOOsdiction.1Ud1
ShII not Impair the operation or affect tne remawting portJons.lectiOl"lS, Partl. tenTII or proviSions 01 this Agreement. and
the latter Will conbnue to be given tud torce and .ffect and bind the plltlls hereto; and IIld Invlfid HCbOn, pan, term
or provtaQ1 shaI be dHmed nol to be a part ot this Agreemenl.
7. This Agreement ahal be interpreted. construed and governed by the IaWI 0' the Commonweatth 0'
MUSId1uHIII.
8, NoIhinQ - can,.....1haI bar tn. nghl 01 IOIhor party '0 oblaln lnjunc:tlYa rollol OQainlt _'onarl_
II1at ... CIUIO '.11 or damOQll, uncIOr the UIUIi _tv rulli, IndudlnQ 1110 opplicablo ruIIIlor obtalnlnQ IlfIIImi1Iry
ilj\llctlans,
9, Tho UnclarIiQnarl re_t. """Iho UOdoIIlgnoo hu flClivod lrancI1l.. ..... .......... _1I1rom Iha
Company at lout fih....1151 calondor.'Y' _ to IIla dot.1ho UnclarIiQnarl..lCUloslhIs AQfIomont. Tho UnclarIiQnarl
lI<IulowtodQo. IICOtl>t 01 Ihl. Dev.'op",IO" Agroomon" 'og._ with any amonomonll, atlo...lIv.la)..ys _10 Iha
.... haraol,
IN WITNESS WHEREOF, Iho _. he.. ".,...,to lit II1Iir hanel. and ..III an 1110 "10 1Irs, WrIIlon abova,
Attnt.
D~'DONUTSINCORPORATED
by j.)-~ ~ 0 ~
DIVId B. Heller
DlItclor 01 Developmelll & Operatlolll
ERPRISES, INC.
S8Cl8l8lY
,
r'
,
i
Wllnns/Attos"
~~ ~. ;?~~
Shirl H. Chestnut. Secretary
3
...--..
"""- 'oamln"
UI ~QO
',' JS Rea.onable.
, "
.', 3....~! .."..;:2mpemlon ~sre8m8r.~
Enforceable
(
SparKa TllD"Up CaDlan.IDc. v, Gary \\'\IIe.
":. 1j;,;tlCl L.llltt, ~Utn Diurtct ai PennaVlvanla, ~:"i A_uan :0;0, 09-664, Filed
.\anI19,1989.
COIIIIIIOD Law-'>;onCOIIIDelnloD AllreamaD~RaeaooaoleDaa--"~e '{ear-
rao.Mlle RllOiul-..anCDiaae'a CODUDUll1l1 IlbllllauoDa-jntuncuv., il.llel.-.. (
"ancomoluuon ..t...m.nl arantbmne a inncnlSH lram aalraunr ..~Ie UIIWoUO
:onur or . SImilar alWllIII Wllnln 10 mIla Ot tIS Ir.m:n1lO 'D. one . .itlr tlnnlnlUlan
.vu ro...,nlala ana 1~IOtcUllla, aVln tllo~ tlla irancnlSH nla . conun~ GUlY to mHt
;'lIratl.na tenW oal~un",. PlnnltUtIIltlla irancnlSH 10 ooerall II tna irancn_locauan
~I.tlr ttrmtnaUon wnUIU ;nlvrllN wllh CUltomer re'ltlORlRtaa auallAnoa bv till ,t:IlIdIiIDr,
:Inca IUeD Inunattnce \YouIII QUIt Incalculable Ina trnaaraole n.rm 10 tn. ,r.wrmmr.tllt
.DUfl mntea an tntllDCUlln apulSt tilt Ir:lIICIIlSHa v,olauon allile c~ Buk mer-
aDce.. ~ 810.01. sso.
~elDoraDaulD IllllIe<i 10 liabilil\' ontV, !a lho mauar or
aamulS w.nl to Inl 'II;"'. ThelUf1/ mume<i
1 Vlralct llw.ralnl platnuiC S1QS.951,~9 in
damues. What 1011aw. II my finclitllll ai
FoCI ana ConclllStOns ui I.\w palUlnltlllla
the Claim ior In,UnCU\'1 fllIll.
I III Cull leall
:'lEWtIlMER.J..
:. Proceallra, &dtnouno,
?I:linmi, :=ru Tllna.liu Cenurs. Ine.
"~Dar.a ',. ~routnt Ihlll aCllon allllClnl
:~UIII 01 3ctlon ItlmmlM irom In aliena
....o.atlon III .1 1f3ncnuln. .:lInement ov
llllnOlnt ~.,v :;, \Vhitl. ~oaru IMa mono
1tarv a:una11S lor thl brnen oi contract
'Iauns. Thl Ola.nllir alia _u a aeclanltotv
Juqmlnl IUUtIIl t/lal :;puu may nnw aii.
<pntlnua III oah~atlaRa punuanl In tile
1.fawI DrDVtltana at Ihe contract. PI3intljC
UIO.....ln o.mwtanuy anlDln White lram
~parauna .ny hlWll.. wnlch wOUld com.
pete Willi :;paru TWI80Up Canters. nwre
baJ~ no nHO rar .IUlUllva diacovary tn tills
... lhe t:'OIln llnilrea a allan diacovatv
;l&fIDG ana IIIat alalnuirl prayer iar a Pre.
~im.narY In,unctlon 01 aadl'lSllCl at tnai u.
Claun lor aermanlne InJUllCllve nUli.
:J.fanaanl anna a counumalm lllmnl
"hat ::oaru ltslli ....IOI.tea thl Iranc:nwu
.rrttmenl, In InlS renra Whiu allona tllal
;,Jlllntui brllcneG .1n ImOUId covenant 01
.aDO Illuh .na i31r olallnl. oeCennanl
~I'IUB ttut .1 ,u-cui is aOllraonlw In the
~ytftt oaln canis are iouna to have Vlo.
.am Ihe conlt3ct. .... Jury tnat wu hald an
."Dni 17 .na 18, 1989. on Ihe toauaa oj
'lnacn oi conuact. The dtClIIIlWII'a cWm
'Dr tntunCllva nneC wu tntel to tllll bencn.
.'<11111 c'aaa ai eVldance. tne COlin ainctta
I v.ratCl lor DlalntliC an tts breacn oj con.
~rm Cl3.Uft. .1na also QII'ICltd :l verasct tar
;ua,nulr un QII.naant I cauntlrc.:um
~lIIralftl nreaen o. .1n Imaued caVltftl,ftt 01
.ODD l:llth allUna. Thl QlrtcteG VfralC'llor
;lalntllf an Its brelen 01 cantnct. claim oer.
n 9410
ll. OvetvllW 0' .~ODllaDI. uw,
.\ l'luon&all contract t:O\'IIIIAI. no' to
:omOIlI II ilia' ..no binolq In Plnn.
,vlvanlL ':1 HMlolln. :;''1''11II. Ine. v. He;'.
I.." 733 F.:!:l 1~l-lIJd 'Cir, 191151: Piemn. ,
P-. Ine. \. Hoifnrr, .1i5 Po. 300. 311 ;.
.-\.Jd ~a7 119761. l: na.. a I tUC\\De AI(fH'
mlDt wnl,. lor furnD... thl CpRHlt.ftr "ra-
....,d.. Dusan_ 1l0Inll'. hUll... trUDin-.
\IS& al col'\lClrau n.m.. ana 1_ aavam&ln~
.1aIII&DC8 ana .ICIUSIVIt\. ruplla .n a Clnam
popapau:al ataL Ihl 'r.nclIIIOr'a interesl
may oe prapany prallCUQ by a . -."Ie
ccrvananl not to como"l 'a. a pannd Collaw.
1M temltRatlDn 01 lhe conlna. Id. 351 A.2d
u~10.
A cavenlnt not to comaltl IS unnllDna.
~II. JaG therefore unenlorcnall. Ii \t II
.)Vlnv oroaa an uml "'no temlOlY. or Ii it
:rntn 3n unnssonaale nUIIIDID on In.
'IDllUtta D.n\'. i\r~USI .. .\C,z.. t.'1-., .l:
.';0... ine... ~J.l P.. ~u3. ~4 A.:!II 1119891. II
:5 a 11D1r&l NlI UI Pennsv.vanIA contract
1:1. that tile tlrms 01 .1. covenant noc to com.
0_ UlI W\&nlorceaolO ti llIty IN braaa.r
ilWl n_tv ID DrallCl tilt n- at
,_ ana Its .aaawtol, 1\'_:iaaumI S.,.
.'.... ine. v. IVtll//IIJ\alall i7ftvJcC4iDore.
una. ~38 F,Suop. 108.1:: 1E.D. Po.1982l.
.\n. ,",unctlon IS an IIlnQrai~ 1"InWCi,.
.vnlCh lnawa nOl De _ tr lilt pam..
"\la. oe aa_ItI\' DmlCllG al law, &an.
"e.a v. :Eh_ra. 50 P.. ~lI\WIth. 199. 200.
HZ .\,,!d 672. 673 1\9801, H_. It III a
'allll..uoliahoa N'. ,n i1.nnay\vama tlltl a
1110. C_m.rceCI_~ Ino.
.......
::!
.,
N.
I'
PInY wno II or WIll III in!\IftCI by I Ylolacion
oi IUCA I CGWIWII nOI 10 comDftlIl oroma.
:liv .nuUao 10 tn)WlC&I\" nn.i. Scllwanz v.
t..unar:v ell LilIm aU/IPIY Drivwn. J39 PL
353. H A,2d 438 11940~ ~_ C,orar. lnc:.
", Comann'lIIl"e Meanmenr. 383 P~.
:luper, j9, 525 A,2d 433, ~38 1198n, BICIIIM
Ilia YIOlaLIOn oi I ClIVIItIIIl nol 10 compe"
rBWII tn ,"Iln.nn.. wllh CllllOmer nla'
lIOIIIlIIDS QUI\\\C nanallll\uii.bl. c1amqa.
.ucII cpveftll\lI an pnme '"CI. .niamlale
.n eqWIY, :l.. B~nl Co. ", alW ral do
IWpalr. ~n PL I. ~89 A.2d 118411976l; B".
liapr Y. ..~I Batlce "-_ lnc.. ~sa PL
100. 103. 314 A.2d 298, 298119741: R_
Callr, ~25 A.2d IL 438,
With 111_ plIua1 pnftClal.. In mincl I
naw malla my FiIllliJlll oj Fiel lIIIO Cowu.
liaaaaj t.1w,
.
In. Finriiafr oi F~cr.
I. SPiraea TlIIIaoUp Clnurs.lnc. II a Dlla.
wan cofllOrauan Willi III onnClPII plan oj
bllSlnlll In IllInaIL SI\UlCS II a Cluzan oi
Delawan IncI IlIlnall lor Ilia ~ oi
!IIY alllrmlRllaon aj diwmlY al ciuzaasnla
IlallilCl malllr ItlllIIIialan punuaal 10 ;!S
u.s.C, I 1332.
~ Guy 0, \Vllill IS III Ind.ividuai ancl a
citlZln oi III. Commollwealtll oj Penn.
.y\vantL \Vlliu operata a dOUIes Tw.Up
f_1II w,th tll anllClaal PW:a oi bualaa.
laca_ aL 1574 Brisllll Pika. Bucka CoWl/Y,
PIMSYIVllltL
3. Dunn~ or .bcJul ~Iy. 1985, SOUD
Tw.Up wu a diYlSlO1I oi MMCO Entar.
pnlll. 11Ic. ,''Sparkll MAACO" ~ad
":'4MCO" raopecuveiYl, MMCO. "' aU
1_ maurWla lhia cue. II a cofllOrauon
Ollllluua PWItWII la III. lawa of Pelll\.
sylwnllln F.bruuy 1972. MMCO's onlU:l'
I'll pia.. oi bUlln.. II tn K1l1ll oi PnmtL
PlnnsYIYlnlL On Apnl ~O. 1987, Souu
Tun..Up Conltrs. ine. alllallMa. '" IIMI\CII.
:1Ia Sparu Tw.Up alYlS,pn 01 ~AACO
JIIII .110 pwclluea .11 "~hlS ullaar ~II
!'r.llcntsa A,rnmonlS en"rea tnlO by
Soules/MMCO. .
~. SOU"" MAACO llfIIIIud f,.....h;- 10
pll'Mlna 10 nuIlliab lIIIO aperall ItIIOIIIllUW
"""eI COlllln undar a ulllfarm I~"m
d_IIIQIli by SpuDl MAACO. Tha qIfto
IMftIS IncIwIa .... a! fldanlly lfCIIlIncI
Pl'llOflllary marta. :llllU'lcs lIu conunlllCl
1M bllSlll_ llW1WI StllCll lIS PIIIaIUe oi
Ilia bustn....
5, On pr aboul AIl&IIII JO, 1985. Spat/cs,
MMCO ancl WbllllnllnlllnlO a inncIuM
.\CIftIllIIII unclar llrma tn wl"ch \VIIIII wu
franCOlite! 10 opera" I OOU'" Tw.Up
"'n_ fratlCllIM Gu....
....__....n..
10.161
em_ 'lhI "FlDCiliIe AcI ,''I. Tha
!'rallenlll A"'lmllll _ ~ by
Spar... 11011I eoual MAAlXIln _JUDCQDII
""th 111I Apnl ZO. 1987. aala. Tba FnacilIu
.\""mlnl tn.,uald \Vbl,,', 11I8 oi till
"0:011'" 1'11III-' ,,' tfOll-a_ 1_ WILli
usa 01 I.. al\l\ ullllr marIlL
a. Th. rr2ncnae A........DC oblicacta
\ VIIill. Inlerauo1:
JI 10 pay 5aarics w.iIly royailita _
10 _ Darcenll~\ of llIa.__
jnllll UlIIlIIIIIIIIII:
bllo StIDIIIII weekly wrmn fIIIOn" '0
Spar... oj 1fllIII- anerallc! by 1111 "r.
va canllf: =a-
cl to IIlIY iiporils III ~conmbu.
tioD III Ilia IIIIIIIlIU of S4OO.IlO par "''''II.
wllicl1 may.", tlll'ftuaci lID onaall1U'.c1
uciI YIU,
7. Whilllw ililld 11IIII m...a 10 IUbmll
to 5para Wftalv wnUIII ...--.- fI1IOIU
rannl noon OO""U I~JUIIlUY 1.1985,
11\1\ far lIOOn "."ocia oj D_lIIIIIr l. 1988,
10 lha pratftl In COlllftven_ Ollila UllUII'
tlOll UDAlf 1M Fnn.:=-. A..--'-
3.W1th some mu:ur . - \Vbl" ..:IS
failecllllo ni_ '0 pay Spara lilY ro)'allY
r....ncaJuna. i:.!~i.
9, With mlllor elClllliona. \VIIlg Iw "jso
iailecllo pay to ooorlla lba aavwnlliq ,"no
Inbuuan IIIICII 01:1"_. 1911I1.
10. \Vllill lias i.illd III poy (or prvdllClS
.-sYId from:;.:::::.\,
11. Th. F~ "-_.._fie providll
IllIl \Vblll wClllld lit .n D8lIuil of lba ...n.
IfICt ill "" aVl"I IW II.- ~ a.y.
IMftIS OW'lIll fram Ilia f..-'oN.. An man
IbIUIllliny .JOI d.~ IIVlnNiL
12. ~alwllilaWldillll Whig', "iusai tc
"ay tile jen OWIQ ,1\1\ III IIIIaam fl1lOIU ..
reqwrea aUIIUIIII to 111I FraI\ClUII Aim.
manl \Vhill COlltlllua '0 _" a ';pal'"
TlIIlI-Up Conllr,
13. Th. rr:sacJUSe A.-....-.... .1.bo pro
.,.d.. IlIal uoall IImllDaUOII pi III.
r_iM. 1111 f,.nrn_ &ball _ _.
dincUy or tnoinaly WIth ilpara by oper:lt
'114I III.UIO..mce i~C1UIY WIlIWa I radilll 0
.IIS nulaa 01"" alllSllq i_ cmgr 10
1 pennd of alii YIU jallowlal_nauon.
IV, CQlJl:iUSlansoil.l..",
I, This Coun 1Iu 111I"W.......1I over lilt
... pumwtl 10 lS U.s.c. 11332. Than ,
cOftl1lII" dlVlmlY of .i ' . "'~,
:1Ia paIllllano 1111 __ DI CIlllUVftny I
,n 1_ oj 310,000. .lICimIft oj _ III.
lnCftBU.
'! 941l
..,
.J.......:
N..OllJ ....r.:I
,.
.:.. ~.~ ". ..0. ....~, oy \\'~il. ~::.
F_~llahanay_gr.
--
3. Th. I'OV"~':::.t ..\. ~.' COIDDetI U an
Conll '" tn. ;- "nenl.. ~,nem.nL ~ncl
wllldl CDVeI'l a penOll 01 une yeu iolloW1~
allIllaa \ermlnallon &lid aD &I'D oC a tell
rmI. raDl.... II . ,"_UI. CIIWMIIL Thil
C_l IS AuonaDl. .\In In I~l oi the
conllnUln~ ooli~atlona oC White 10 m_
mtW ano payroll obli,-lIOlIL Theniore tll.
arnnant IS a billlliq cootra= 11Im puntl.
10llO PlnnaYlvanla law.
~, PlmlltlllllJ White 10 COOUlttle a car ser.
va buatn-. at Ilia aIrmIl IDCalIOII woulcl
;
";-
:.:1 MIl
ui: 10 in...... .. _It nia-
..or. .;~ ftl:'. ..IIIU h\- ~=ra. 6um lAW!'-
(..-:8 ....... . ':\IUWU I.._i-....u. .&IIIl
irrepuaDle hum 10 pl.;...([ Tltlniore.
~D&rir:I CIIIIID& bt aciaquuaiy ..._L~J i IC
:.... wtth np.nlIU 1M _ _10_
pete.
3. White II anjoined Cor a penoci oC on.
you inllll Uta elate oi u.. ~ irom
I~ III aDY btIaut.- Ula _..1UIIIiar
.0. gr comaeuave wnll any lOpua 'l'wte-Up
dlter ~t :lilY l_lIOO _bla a.... oi till
mIieI 01 Ula ceter opaatecl by WhIte at Ula
tLIDI oj ClftJllt".""D ai the F.~ Apw-
~L
.
\.
4
l194111 Contract Breaches Justified Termination, Not
Caused by Unlawful Encroachment
Spru TlIII"Up C.IlWn.lAc. v. Ga..,. WhIte.
U, S. DltUlCl Coun. Eutem Olamc:l oi PlIID&viv&n1L Civil AeuolI No. 8s.a14. mill
~Y 1.1989, .
COIIIIIIOIl Law-Fralloltlaa Tal'lllllUl&loll-Colluaal Bnaalt..-i:uroaalt.
_l-Snaaa of eo......., of Good rai&lll Fair OaaUq-Eallnaa AIdlIIIIIIY lO
o,u f'rallaltta.-FaIlun In pay rayaiD& 10 IIIbau& ~y WftUIII ....... ancllO
maiuI ...venmq CODlIIho..._ ..... COIIuacs b__ thu luaulllll c.. oC an
_II. 1\IMo4I" CI"'-";" Whl1e &lIaumq Ulal " rallecllO llftiorm u.. '1aIIaI
UbllcaUOIIL lhe II"'....h~ cWmecl thu Ula railwa ..... ca,..Q by the rro " '.1&Ubo
IlaIunanl oi two lro.~;- W1t.bla five nuIa oi 1111_11- Tha rro....n- a1IeIei &lll&1IId1
-.mnenl bNKllecl aD IrtqlIjIcl arveJWIl pi coocl Cal&ll &lid CaIr ~_II.. A.......""
PeaoayI\/U\1a law ........- UttI _lOr coocl (aith and Calr dulillCo " .. _ Ulllliy
the covetWIt III aD &I'D or a concnaual reIa..n......1' In wllldl the c:ontra= lIIa.._
lam. 10 lllia cue. the rl"'lU'hluor.. eqI....y allUlanZali 10 OllAD lhe now rl"'- 8uk
ref.rell_1110.1IZO.1IZO.10.
Mamanad_
11& full tall
SIWtIlMER. J~ Thil.. aD aaion ror bracll
aC c:ontracL PlalnuiC, SpuIta 1'wte-U" Can.
tIn. lne. .lIatlAG llIal allmaan& aary 1O.
Wltill V,olallO a iraocnIU ~enl Ith.
"f'raocnIU A~t '1. Berore me " III.
<1_ oi IVlalnce ~I InU wu pluntlir.
mouon ior ~ dinalCl vlnIicl pWll&&lll 10
FId.R.Clv,P. SOIaL
In opatI COIIft. ~tu W"ltell and onl ~.
mnt by lhe puua 1 pantecl plaumrra
~ In pan and dIIIIIcl jl an pan. Wlw
CuIIon .. the nuoaale tn IIIIIPOR or lbu
Order.
I.~.
00 A..... Jo. 19M. Cary White entered
Into lb.I f'r:IIICIme A4J."_MI Wltb Spara
T....U" wnlcll. ~l Wl ume. wu. diYiaIOR
'II MMCO Ellt.f\lnan, lne. I"S"arul
, 9411
.
,
MAACO" aocl "~CO"" . ..yL l'lu.
_ 10 tile FI'IIICIIiu A.. White
apnd to operata aD au. ..w ..mc:8
_unde...wulorm~"'.llir lby
51lUD1 MAACO. White. u a ,.. ollha
Fraocn... A.,..mlnL operatecl a 5DU1ca
T......Uo rran.clllU locaucl " 1574 BristOl
Plb. BudIa ~pwuy. PmnaylWlllL IIIWlIII.
ttlMot tn&1..
I)n Apnl 20. 1987, lhe pWlllift SpuD
Tune-Up Clllten.1nc. t"Spua"L pIIICDac
..u the _ oi SpuD/MMCO. Ptu.wtl
10 lIIia uIe ell lite ISIIlIIIIJ rrudlile qIfto
111ft" alltem! Inw by Sparilal MMCO.
IncIJJclinlI UttI f'1'IIICIIiu A..- oi Cary
WhIte. wen tnnai.ma IOI5pariIa.
Th. FreDellla. A,rn_o,' abUI"la
WltIte. an&U aJW.
II 10 pay to SpuD weeldy rayalu.
equa110 sewn IIflftIIl ,~l or the ~
l&II& inllll Ula buIuaaE
:1IIO.COm...4,caal. ~-4""""'"
[, 8673] FranchlH. PreliminarilY Enjoined from VI.olatlnl.
NoncomPetltlon Alr..ment . ...-......~.. : .",':", . ...~~~:;.;1
, . .... , ,..' .,' . . -' .1~~
Jay Thoma Gold, et aL v. BoUday ReDt.A-car IllterOttoDal, lao. .
. ". .. ..' '. .. '." .-..... ...... . -: .
W U.s. Diltrict eoun.: W..~' Diatrict of MiIIouri. Weatem DiVwcio."No.85-1382-CV.
-3. Filed December 18, 1985. '. . '. '. .
PrellmiDary IDjUllctloD-AcnemeDta Not to Compete-Irreparable Rarm- "
Balance of RanbbJp.-Llkellhood of Succe..-Publlc IDtemt-AD automobile \
rental f~n..hlac)r attemptiDa to enforce a poIt.tenn noncompetition qreement apinat a
terminated franchilee wu eatitled to a prelimiDary iDjunction barring violation of the
noncompetition qreement and requiring transfer of franchiee prerm- to the fraJl..hl....l'.
There wu a threat of irreparable hann to the franc:hilor. since the tenninated fnn..hl-,.
WII diveftiD& poteDtial c:uatomen by 11II of the fnn..hl... phone numbera and location.
Although the hardahipe were fairly l),1,nl:"'i. the equitiea did not favor the fraJl..hl-, who
willfully and intentioDally bre...h~ the noncompetition qreemeat and attemR*ed to con-
ceal this breach. The fnn..hl....l' ahowed a high likelihood of 'lI.IClCe'"' on the menU. since the
terms of the qreement were undisputed ana the fnn..hl- wu ..nllkely to ahow fraud in
the inducemeat. Fwthermore, there wu a pUblic intereet in enforcing noncompetition
~meata u long u the qreement is reuonably limited in ICOpe, duration, and geographic
l'1!gIon. Back reference.: 1 810.05, 850.
... ,',
.:,
. ..
,
Common Law-Fraud iD the IDducement-GovernmeDt BUliDe..-Profit/
LoI. StatemeDta-Av..labWty of IllIuraDc_AcnemeDta Not to Compt!te.-AD
automobile rental fnn..hl-,. failed to establish that it wu frauduleDtly induced Into eater.
ing a fnu..hl"'lII1'eement that included a poet-tenn noncompetition qreement. A claim that
the franchisor promised nlet insurance wu not BUpported by the record; even if it were,
neet insurance WII not a 8Ubetential factor ind~ the franchi8ee into the qreement. AD
allegation that the franchisor etated that the franchiae had IUbetantial govemment buein_
wu rejected, since the franchisor did not repreeent that it had secured a govemment
contract for the franchiee. Contrary to the franchi8ee's claim, the franchisor did not miarep-
reeent the accounting trainiDa to be offered to the franchi8ee. A statement that the
franchisor had the fifth largest automobile rental system in North America wu not shown
to be false. Profit/l~ etatementa provided to the franchisee were not fraudulent; they were
prepared on cub now buia, rather than on an accrual buia. Furthennore. a false rep_ta-
tion in a procedure manual on the availability of group insurance wu not a matenal factor
inducing the franchisee to enter the qreement. Since evidence of fraud wu not perauuive,
tbe franchisor wu likely to aucceed on the merita of ita pennanent injunction action. Back
refereDce.: 1 810.05, 1820.
Order Gralltiq DefeDdaDt'. MotioD
for a Prelfml...ry IDJUIlctioll
(ID full test]
HUNTER, Sr. D. J.: Plaintiffs, Jay Gold and
Gold " Son, Inc., (Gold), entered into a
license agreement (qreement) with Holiday
Rent-A-Car International, Inc., to purchaae
and operate ita JC.n.., City, Miaaouri,
franchise. Holiday /Payl.. Rent.A-Car
International. Inc. (Holiday) hu aw:ceeded
in intereet to Holiday Rent-A-Car Interna-
tional,lnc. Gold rtled auit in Jacbon County
Court on September 25, 1985, alleging
breach of contract and fraud. Holiday meet a
counterdaim, including a count for injunc-
tive relief. Holiday _b to enforce a cove-
nant not to compete, the transfer of the
phone numbers utilized by Gold while oJ.l8r-
ating the Holiday f,.n..hl_, and an 1181gD'
118673
.
ment of the 1_ of the Holiday location at
the Kanua City International Holiday Inn,
11832 Plaza Circle, all of which are provided
for in the qreement. The agreement pro-
videa that Florida law will control any suit
arising under the agreement. Holiday
removed the cue to this Court purlUaDt to
28 U.s.C. t 1441(a). A hearing wu held on
the prellmln.~ iDjunction.
On January 6, 1983, Gold entered into an
option agreement with Holiday to purchase
ita Kanua City franchiae for a BUm of thirty
tl:o"....nd ('30,000.00) doUara. Gold signed a
liceaae agreement with Holiday to pW-chaae
the franchise OD January 18, 1985. The
apeement provided an exclusive lieen... to
operate the franchise in the countil!ll of
JICbon, Clay and Platte in MiIIouri. and
Johnson and Wyandotte in JC.n.... The
fraJ.l..hl... had been operated u a company
, .
'\
)
01118, Commerce cs.-t11l HouM, lno.
1
franchise prior to the purchue for a period
of 0IIe year. TIwe, Gold ~ an onao-
lna ~,.;-_ mmp1tte with location phone
servtce, employ_ and cuatomen. Gold
--'"'Ill actual operation of the IrJIftl'hl.. in
late January of 19811. &t..-.. the time Gold
liped the qreement and the time he
.-''''e!I actual operation of the f~D..hl....
he received a one week tr-lnlllg coune at the
headquartera of Hollday in Florida.
As time went on 301d became dis-
enchanted with the Holiday system and
eventually in March of 1986, began talb
with the officials of American Intemational
Rent-A-Car, Inc., (American), a competitor
of Holiday. American did not have a
franchise in the Kanau City area. On March
14, 1986, Gold 8eDt a letter to American stat-
ina that he had developed a strategy reprd-
iDa the noncompetition clallll contained in
the Holiday agreement. The strategy wu to
gain the attention of Holiday omCiala by
withholding franchise feee owed and then
suggest that each party go ita own way.
On March 28, 1985. Gold wu offered a
franchiee of American for twenty thousand
(120,000.00) doUan. The franchise area wu
the same u that covered by the Holiday
qreement. Sometime between April and
June of 1985, Gold began to accept American
rentals at the Holiday franchiae location.
Statementa of dues and rental data were pre-
pared for the months of June and July for
buain_ between Gold and American. Also,
in June Gold placed an order for American
BUppliee. .
Gold eent a letter to Holiday, on July 3.
1986, indicating that he no longer wished to
operate the Holiday Kansas City franchiae.
Holiday reeponded on July 8, 1985, making
reference to the noncompetition clallll of
the agreement. On July 30. 1985, Holiday
notified Gold that his franchiae would be
terminated in ninety (90) days or on October
30, 1986, if he had not paid the franchiee
fees which were in arrears. The feee were
not paid.
Gold continued to accept both Holiday
and American reatals during the. spriDa and
summer of 1986. Holiday officials gained
sctual knowledp that Gold wu accepting
American rentals at the Holiday fran..hl...
locatioDB on September 16,1985.
Gold statee that the licenee agreement
with American wu not formally eatered
into until AIlgU8t or September of 1985. The
licenee qreemeat, however, is dated March
31. 1985. The evidence ahOWl at the very
least that Gold wu operatiDa u a de facto
licenaee of American u early u April 1986.
8uIIn.. 'ranch'" Guide
,
)
.' .~. (NnlJeOmpeCitioa A,t.......-C!
The Holiday 111..40 .+.t and ita wnDi are
nndlllpUted. Itllrovidel that Gold will not
compete with Holiday for a D8riod of two
yean com.....,I'lng upon the elrectMt termi.
nation of the ~lt. TIle Court ftDde
that the lpeement WII effectively termi..
nated on October 30, 1985, . provided in
the letter to Gold on July 30, 1985. The
pcIIraphic ICOpe of the COYeIWlt illimited
to a seventy.five (75) mile radius of the
licenee area. Both Miaaouri, _ NaticnW
Starch IUJd Chemical CoIp. v. Newman, 577
S.W. 2d 99, 104 (Mo. App. 1979), and Flor-
ida, _ FIa. Stat. . M2.33(2)(b). enforce cove-
nantl not to compete if n--o...hly limited u
to time, area and ICOpe. The covenant in the
ll1-t cue meets thole requirementa.
The qreement, also, providee that any
_lnlng 1_ period will be .-red to
Holiday upon termination of the qreement
if Holiday 80 inatructa Gold. Furthennore, it
providee that all phone numbera used in con.
nection with the Holiday fraJl..hl... are to
uaigned to Holiday upon tennination of the
qreement.
(Preliminary bUwtctiOD)
The Eighth Circuit Court of ApP8ala hu
developed a four part test to be utilized in
determining whether a preliminary iDjunc-
tion should iaaue. These four parts are: (1)
the threat of irreparable hann to the
movant; (2) a balanciD& of the hardahiJIB
between the respective parties; (3) the
movant's likelihood of "'''-- on the merits:
and (4) the public intereet. See, Daupbae
Sywtems, IDc. v. C.L. S,)'8temB, Inc.. 640 F.2d
109.113 (8th Cir. 1981).
(Irreparable Harm)
There is a threat of irreparable hann to
Holiday. Holiday turned over to Gold an
ongoiDa franchiae in January of 1983. Ita
neet of vehicles wu leued to Gold. It
uaigned ita 1_ at the K.anua City Intema-
tional Holiday Inn to Gold. Gold hae eze.
outed new leuee on theee pJ'PlftI- In April-
June 1985, Gold began acceptiDa rentala
from American CUBtomera at the Ho~
office. He continued to conduct a dual buaj-
n_ out of the Holiday fnn..hl... at 1llll8t
until September of 1985. Becallll Gold had
an ucluaive licenee. Holiday dOlI not hive
another franchiae in Je.n... City. Gold hie
diverted both _ poteDtial and futun C'~
era from the Holiday system by .. of the
phone numbera listed in Holiday advett'n
meata includiDa the Yellow PIpB, ~om-
en who 11II the rental system clue to ita
location and put utiafied CUItomera of the
,8873
.
.,...
Holi~y ~ TbJe _01".-" CODtin-
'* today. Gold IW1 .. oae 01 the tell-
IIbone 1I1I1n_lieted ID the Yellow PIpe u
a Holiday number to ~uct ''.In_ for
bia American fr-n..h_ ud u late _Nov-
ember Wu uIint another phone allln.... for
the same P\llPl*. TheN II a coatinUOUl
hannH lidabeina aufl'end by the jIOOdwill of the
o y IYItem. It would be atnmely diffi.
cult to calculate the UIIOUDt of d,.......
,!hich Holiday hu aufl'end and will con-
tinue to BUffer becaUlll of the breach of the
fr-n..h1oe qreement.
[BaLmce of HurWJipe)
A balancing of t.Iw hardahi~ bat..eao the
1""",,1.ive partieereveel that the equitiee in
~ caae are fairly ...1...-1 U an injunction
Ja iB8ued Gold will not be able to compete for
car rental ho..ln", within the area dq-
nated in the qreement. He hu a neet of
appromnately 66 vehiclee which he will not
be allowed to operate. Pilla, he will not be
able to operate the American franchise
which he p\U'f'h......
Holiday, on the other hand, continuee to
be harmed in that it no longer hu a
franchiee operatina in the KanuI City mar.
keto Allowlllg Gold to continue to operate
the American franchiee in the market not
only preeenta competition for Holiday, but
also, deetroys Holiday's only buaineee in the
market. Gold did not infonn anyone with
the Holiday system when he fint began
operating the American franchise. lnatead
he chose to operate the American franchise
in a clandeetine fuhlon out of his Holidar.
location. The buain_ of the two compet .
tors were operated side by side out of the
same location without the knowledge of any-
one at Holiday. Gold wu aware of the cove-
nant not to compete in early March, 1986, u
he had written American that he had devel.
oped a plan to get around the coveaant.
Even before this plan could produce any
results Gold began accepting American
rental Cll8tomen. Gold willfully and inten-
tionally breached tha covenant not to com.
pete and for a period of several montha
attempted to conceal this breach from Holi.
day. Under theee c:ircumstancea the equitiee
simply do not favor Gold. See, Sigma Chemi.
cal Co. V. Ham.. 686 F. Supp. 704, 711 (W.D.
Mo. 1984).
[r.i""'ibood otS~)
Holiday has ahown that it has a high like-
lihood of linn m on the merits. The qree.
ment and ita tenna are undisputed. For
Holiday not to aucceed on the merits, Gold
must prove that the qreement wu induced
1{8673
by fraud. See, Huu.,pr v. Davia,. 599
S.W.2d 606, 611 (Mo. 1880). Biron add.-.
IDa each alJ....tlnn 01 fraud it II important to
note MVeral of the facti. 0I1e, Gold operated
the Holiday f"'....hl- for over two yean,
ICCIptiq the beaefita derived from the
apeemeat. Two, Gold wu aware of the
reetrictive covenant and ita efl'ectI, a plan to
get around the covenant and ita effecta.
Three. while operating under the lice-
apeeent with Holiday, Gold began neptia.
tions with American concerning the
purchue of a franchiae. Four, Gold wrote
American that he had developed a plan to
get around the covenant and ita effects. Five,
Gold accepted American reatala while still
operatin.K the Holiday fraJl..hl... and did 80
for a perlod of at leut five montha without
the kJlowledp of Holiday. SIz, the rtnt time
Gold alleged that the rment wu induced
by fraud wu with the iling of the complaint
in this case.
[Fraud)
Gold made approximately eight allega.
tions of fraud. Fint, Gold allepll that he wu
to receive depreciation rebatee on the neet
of vehiclee at the JC.n... City franchise
when he purchued it. The option qreement
provided that Gold would purchue the
vehicles currently being used at the
franchiae. The purchue, however. wu sub-
ject to Ford Credit Corp. (Ford), approvilll
the UlUmption of Holiday's loan on the
vehiclee by Gold. Gold wu not able to meet
the credit requirementa of Ford. Becallll
Gold wu not able to U8WJ\e the loan the
agreement wu modified. Holiday' now
wow:i 1_ the vehiclee to Gold at Its coat
from Ford. The modification qreement pro-
vided that the owner of the vehiclee would
receive the depreciation rebatee. The owner
WII Holiday;
Second, Gold allegee that neet insurance
wu to be provided at coat by Holiday. There
it not perauuive evidence to support this
allegation in the record. Furthennore the
qreement allows Gold to secure his own
neet iDBUrance if he can obtain a better rate.
On one occasion Gold did 80. Certain admin.
istrative upenaee and a potential for a profit
if l~ for a given period are low are calcu-
lated into the rate Holiday is going to charge
ita fran..hl-_ that purchue neet insurance
from it. Gold iDCludee these very same fac-
ton in the amount he c:hanIea car reatal
CUItomen who purchue Illbility insurance
on their rental car. Gold stated that he
would not object to the inclusion of the
administrative expenses into the calculation
of his premium rate u long u he would have
01118, Commerce CIearIIlI HouM,Inc.
.,
.\
, ,
.
..l.
.:..... ,
)
,
beea irlonned of it. TbiI ltatement indi-
~~ that evwn if the..... It'tation_
........ that fleet ineurance would be IOld at
COlt, ~t wu not a IUbetantial factor inducina
Gold mto the lII1'~,"""t. _ -
thaThird. Gold an... that Holiday ltated
t ~ Kanua City frll""hi- had a 8Ub-
etantial amount of prvenIJDIlDt bo..ln- In
1982. Holiday had beea awarded the GSA
contract for JC.n... City. The contract is bid
out each year u provided in govemment
regulatioDB. Holiday bid on the 1983 con-
tract. In late December, 1982, Holiday
learned that the contract probably would be
awarded to Thrifty Rent-A-Car, a competi-
tor.. The ~ bidding p~ favon small
t:liln\!8HI. H~liday contacted the aSA,
IlVU1i that m the pre--llng year Thrifty
h;ad conducted too much "..In_ to be clu-
Bified u a small "'..In... It wu not until
!"ebruary, 1983, that Holiday leamed that
Ita attempt had been ..n..'. (. ful and that
the GSA contract had been awarded to
Thrifty. Holiday did not repreeent that it
would or had secured the GSA contract for
1983 to Gold. Gold wu informed of the cor-
reepondenC8 with the GSA u early u Janu-
ary 20, 1983. Eve after learning that the
~ntrBct had beea awarded to Thrifty, Gold
did not make any allegatiODB of fraud to Hol-
iday concerning this subject matter.
Fourth. Gold allepa that Holiday made
f~ ,rep~ntatioDB about ~he accountiDa
trainmg which he would receive u a licensee
of the system. Holiday instructed Gold on
the proper method of keepiDa the day to day
recorda of the franchise during his week
tr-ining _ion in Florida. An official of
Holiday later gave Gold some 8U~~:::ental
trai~ing at the Kanua City fran . . Gold
teetjfied that he believed that Holiday wu
going to give him an enenaive training
course in accountiDa which would enable
him to perfonn all of the accountiDa work
for the franchiae. The Court f'mda that there
is simply not penuaaive evidence to eetab-
lish this allegation.
Fifth, Gold allepa that Holiday mianpre-
sented that it wu the rlfth laqeet car reatal
system in North America. Gofd hu no per-
sonal knowledge that this etatement is false.
His buia for the allegation is from rru'l",nne
articlee which he hu read. Lea Netteratrom,
president and ~ority stockholder of Holi-
day, teetified that the statement is bued
upon the number of locatione beiDa operated
by Holiday. He further stated that he
believee the etatament to be true. Gold hu
not preeented penuaaive evideace to eetab-
lish the allegation that Holiday wu not the
rUth largest car rentalsyatem in 1982.
Butln- FI'IIIClhIM Guide
Si&th, Gold .11... that HolI~y mi........
Mnted that it had numeroUl corporate
."""'.lDtI. Gold _ eblnnt a Uet of CllIIiDIDiII
which had received a dilcolmt card' from
Holiday. A company'. DIIIIII could appear oa
thlliat either by alOCll Ulll- I rerp.-.l.. a
diIcount card for the compan)' or by a com-
JIlIDY employee limply applying for a cud.
The city and etate of the company'. head-
quuterB is liated alonpide the. company'.
name on the corporate lilt. Tbia ahould alert
the reader that many of the bualneeeeeU.ted
on the corporate account list were of a 10Cll
nature. Gold etated that he believed that he
would derive buain_ from the accounta on
the lilt. Gold teetifled that to the beet of his
Imowledp only once in the two yeara that
he operated the Holiday fnll..hl... wu a die-
count cardpreaented for 11II. Lea Netter-
strom testified that the employeel of the
companiee receiving the discoUnt carda were
not i'equirecl to 11II Holiday, rather it wu a
service provided by Holiday for the compa-
Diee to utilize at their option. The Court
dOlI not rmd perauuive evidence to support
Gold's alleption that the corporate account
liat WII materially mLirepreeeated.
Seveath, Gold allepa that Holiday made
financial misrepresentations as to the
upenses incurred by the Kansu City
franchise during the months of May
through October 1982. Holiday provided
Gold with a profit/l~ etatement for those
months prior to his purchase of the
franchiee. The profit/l~ statementa were
prepared on a aIah now buia rather than an
accrual buis. Gold claima that the account-
ing method used by Holiday in preparing the
atatementa ahould have been diacloeed. He
teetjfied that the esp811111!11 incurred by the
franchise were misstated because certain
esp8naee which were paid at the f'lrat of the
year ahould have been amortized over the
eatire year. Holiday did not make any repre-
sentations u to the accounting method used
to prepare the profit/l~ etatementa. There
is not any teetwony in the record that the
accounting method used by Holiday is not
acceptable in the accounting community.
The Court dOlI not rmd pe1'8Ul8ive evideDCI
in the record to support an allegation of
fraudulent miarepreeentation.
Eilhth, Gold allepa that Holiday etated
that group iDBUraDC8 wu available to the
liceJIIV'" and their employ-. Holiday hu
no audt prop-am. Lea Nettenrtrom teatif'ted
that audt a statement did appear in the Hol.
iday Procedure Manual given to Gold. He
characterized the etatemeat u a miItIb in
the manual. Holiday did attempt to provide
a group life and health plan for ita 11.'" 11
,8673
.
.
,11'1884, ~, there _ DOt IUfficieat
,1!tereet OQ the part of the It -. ..1 to make
=PlnPlan financially r...ible. Gold
early 1983 that Holiday did not
~_~:vide a poup inmrance plan for
and took no acdon "pl-t; Holi.
lay at that tinte. The Court dOlI not find
)8~ve evideace to eMabllah that the
:roujllDlUraDce w.. a material factor indue-
ng Gold to eater the ...-ment.
. The 90wt nnds that there is not penua-
~Ive IV}dence to eaU:bliah the alleptioDB of
,raud In the inducement attempted to be
;lroven '?r Gold. The Court, thus, concludee
~~ H~li~r..W: likely ,,~ OIl the mer.
Ita. In Ita . for pennanent ilQunctive
relief apinat Gold.
[Public h1tereet)
, ~ is ~ ~lic lnterelt In ting an
!DJW1ctio.n In this cue. The :.= hu an
Interest In enforciD& covenants not to com-
pete contained within valid contracts u long
ae the covenant is reuonably limited in
ICOpe. duration and gellII'aphic rePon. See
SiBina CbemiCll Co.. at 711.
, The Court holds hued upon ita applica.
tlOn of the Dataphue teat, thAt a prelimi.
nary iD,junction should .... in thie CIII.
The Court hereby orden Jay Gold and Gold
" Son, Inc., on or before December 80, 1985,
to:
(1) execute all documenta neo: -ry to
UIip and transfer to Holiday the MI.n", of
the lease of the prerm- located at 11382
Plaza Circle, u set out in the licelllll qree-
ment;
(2) transfer each and every phone number
UIId by Gold and Gold & Son, Inc.. in con.
nection with the advertisement of the Holi-
day franchiee in Kanau City, u set out in
Iicen... qreement; and
(3) refrain from violating the covenant not
to compete contained within the license
apeement with Holiday, for a ,-:eriod of two
years commenciD& on October 30, 1986, for
the Keo(p'aphic region of Clay, Jackson and
Platte counties in Miaaouri. and Johnson
and Wyandotte, coUnties in Kanau and for a
seventy.five (76) mile radius surrounding
such rePon.
So ordered.
[~8674] Poultry Growing Operations Not "Buslne.. Opportu-
nity"
WUey B. BunUal, Jr. v. P.rdu.,lac., aDd P.rdu. Farm., lac.
U.s. District Court, Eastern District of North Carolina, New Bern Division. No.
82-124-Civ.... Filed June 14, 1986.
North CaroUna BUlin... Opportunity Sales Act
BUliD... OpportUDlty Lawe-(lov.ral. of Law-Pr...ld.tinl CODtract-
Start of N.w BUliD.."'-CODdDuatioD or EspalllioD of BUliD....-AD independeat
chicken grower's contractual relatioDBhip with a poultry producer wu not a ''bualneee
oPJx.'rtunity" within the North Carolina Buaineee Opportunity Salee Act because the parties'
imtial contract wu uecuted prior to the enactment of the etatute and 811baequent contracts
were not uecuted for the purpose of startiDa a bueineee. The statute detmee ''bualneee
opportunity" u the "sale or lease of any prodw:ta, equipment, BUppliee or servicee for the
purpose of enabliDa the purchuer to start a bualneee: There wu no question that the
grower initially contracted with the producer prior to the effective date of the buain_
opportunity law and that the second contract between the partiee enabled the grower to
continue or expand the buain-. rather than to.tart a buaineea. Thus, any violation of the
statute would have occurred before the statute became operative. Back ref.renc..: , 27&,
saS8.
,..< BUline.. Opportunity Law.-Covera'8 of Law-Bale ~ulrem.Ilt-AbaeDC.
of Sal..-AD independent chiclum grower's contractual relatioDBhip with a poultry pro-
ducer wu not a ''bualneee opportunity" within the North Carolina Buain_ Opportunitf
SIlee Act. since there WII no sale of poultry between the grower and producer. The derml-
tion of "bUBineee opportunity" requires a sale or 1_ of products, equipmeDt, BUpplill8, or
aervicea. for the purpose of enabling the purchuer to start a bo.mn_ where the seller makes
f 867 4 01.... Commerce Clurtlll tto..., lno.
.
.
\\ .~'....~: ....~~
i,
I
!
,
i
~
~
\j
.
5
.
.
~
.~
:'
<
[, 8673] Franchl..e Prellmlnarll~ Enjoined from VI,olatlnl,
NoncomPetltlon Alreement .. . ',:;c.'~~:' -: .. :::,':':"", ' . ':....;~:;~1
, . '" . ," ,- . ..... .. . .- .1"
Jay Thomaa Gold; et aL ....BoUdq BeDt-A~ latenatio.... IDe. . ',:
. ...., .. ." ".' . ,",:'.':. " . -'... '," '.-,.... '; ,. "I': '.-: .
u~. DiItrict C'Alurt, W-.m Diatrict (If MiMouri. Weetem DiVi.ion. No. 85-1382-CV.
W-3. Filed n..-\)er 18, 1985. ". , .,',. . ,
Preliminary laJ1UlctloD-AcnemeDta Not to Compete-Irreparable Rarm- "
Balance of RanbbJpe-LlkeUhood of SuccII.-PubUc IDtenet-AD automobile \
rent&;! fra.,..hl-or attemptiDa to enforce a poet-tenn noncompetition qreement apinat a
ternunated fn.n..hl-" wu eautled to a preliminary iDjunction barrini violation of the
noncompetition II'-"'ent and requiring transfer of fran..hl~ prerm- to the fran..hl~r.
There wu a threat of irreparable hann to the fp'I..h1llOr since the tenninated fpn..hl_
WII diveftiD& poteDtial CUItomerI by 11II of the fran..hl~ phone nnm...... and location.
~~ the bardahipe were fairly MI.n"ld, the equiuee did not favor the fpn..hl_. who
willfully and intentionally m-el,ed the DODCOmpetition qreeDlllnt and attemR*ed to con-
ceal this breach.. The fpn..hl....r ahowed a high 1l1r..llbood of ",001- on the menU, since the
terms of the qreement were undisputed ana the fpn..hl_ wu nnllk..ly to ahow fraud in
the inducement. Furthermore. there wu a pUblic interest in enforcing noncompetition
~menta u long u the qreement is reuonably limited in ICOpe, duration, and geographic
l'1!gIon. Back reference.: 1 810.05, 850.
CommoD Law-Fraud iD the IDducemeDt-GovernmeDt BUliDe..-Profit/
Loee Statemeata-AvalIabWty of lIlIuranc_Acreementa Not to Compete.-AD
automobile rental fpn..hl-,. failed to establish that it wu frauduleatly induced into enter.
ing a fran..hl~ aaree..-.t that included a poet-tenn noncompetition qreement. A claim that
the franchisor promised neet insurance wu not eupported by the record; even if it were,
neet iDBUraDce WII not a aubetantial factor inducing the franchi8ee into the qreement. AD
allegation that the franchisor etated that the fran..hl_ had 8Ubetantial govemment bueineee
wu rejected, since the franchisor did not repreeent that it had aec:ured a govemment
contract for the franchiee. Contrary to the franchi8ee's claim, the franchisor did not miarep-
reeent the accounting tra1nlllg to be offered to the fnn..hl-,9. A statement that the
franchisor had the fifth largest automobile rental system in North America wu not shown
to be false. Profit/l~ etatementa provided to the franchisee were not frauduleat; they were
prepared on cub now buia, rather than on an accrual buia. Furthennore, a false repreeenta.
tion in a procedure manual on the availability of group insurance wu not a material factor
inducing the fraJl..hl_ to enter the agreement. Since evidence of fraud wu not perauuive,
the franchisor wu likely to aucceed on the merita of ita pennanent iDjunction action. Back
refereDce.: , 810.05,1820.
Order GraaUlll DefeadaDt'. MotioD ment of the leue of the Holiday location at
for a Prelhnfn.ry IaJUIlctlOD the IC.n... City International Holiday Inn,
11832 Plaza Circle, all of which are provided
for in the qreement. The agreement pro-
vides that Florida law will control any suit
arising under the ~eement. Holiday
rentOVed the caae to this Court pursuant to
28 U.s.C. 1 1441(a). A hearing wu held on
the p,..lImln.~ itijunction.
On January 6, 1983, Gold entered into an
option qreement with Holiday to purchue
itl IC.n.." City fraJl..hl... for a sum of thirty
tboImand ($30,000.00) doUara. Gold Biped a
liceaee agreement with Holiday to purchue
the franchise on January 18, 1986. The
apeement provided an ucluaive IIi:enM to
operate the franchise in the countiee of
Jacbon. CIa and Platte in MiIaouri, and
JohDlon ~ Wyandotte in IC.n.,. The
fran..hl... had beea operated u a CQIIIP'"Y
OIUl, Commerce CllMnllla -, .....
,
I
\
I
[Ia full teu]
HUNTER, Sr. D. J.: Plaintiffa, Jay Gold and
Gold & Soa, Inc.. (Gold), entered into a
licenae qreemeat (qreement) with Holiday
Rent-A-Car IntematioDal. Inc.. to purchue
and operate ita lC.n... City Mluouri
" t .
franchIse. Hohday IPayleu Rent.A.Car
laternational, Inc. (Holiday) hu aucceeded
in interest to Holiday Retit-A-Car Interna.
tional, Inc. Gold filed suit in Jackson County
Court on September 25, 1985, alleging
breach of contract and fraud. Holiday ftled a
counterclaim, including a count for itijunc_
tive relief. Holiday seeks to enforce a c0ve-
nant not to compete, the transfer of the
phone numben utilized by Gold while oper-
ating the Holiday fpn..hlu, and an uaign.
,8673
;::,
~ .7 .:;.
, .
, .
.
'-'
"
J
,
rfllftl'h&..e prior to tbe JlUlChuefor a period
01 OM yeu. TbuI, Oolil ~ an. OD&O-
iDI ......-....... ",,",?W1 with IONtI- phone
IIrvice, emplo)'llll and CUIltoll)tlft. Gold
'-'nwd actual operation or the {p....hl.. in
late January of 1985. &t..-. the time Gold
lipid th. qnemellt and the time he
r-.tnad actual operation or the fpn..hl...,
he received a lIDII week tJ'IIlnlng courae at the
headquartGn of Holiday in Florida.
A. time Wellt 011 30ld became dis.'
enchanted with the Holiday system and
eventually in March of 1986, began talb
with the omciala of American Intemational
Rent.A-Car, 1Dc., (American), a competitor
of Holiday. American did not have a
fran..hl... in the JC.-. City area. OIl March
14, 1985, Gold MIlt a litter to Americ8D etat-
iDI that he bad developed a strategy regard-
ing the nOllcompetition c1a1lll contained in
the Holiday qreement. The strategy wu to
pin the attention of Holiday officials by
withholding franchiae feee owed and then
BlIIlKest that each party go ita own way.
OIl March 28, 1985, Gold wu offered a
franchlee of American for twenty thouund
(820,000.00) dollars. The franchiae area wu
the same sa that covered by the Holiday
qreemellt. Sometime between April and
June of 1986. Gold began to acc.ept American
rentals at the Holiday franchiae location.
Statementa of duee and rental data were pre-
pared for the montha of June and July for
buaineee between Gold and American. Also,
in June Gold placed an order for American
IUppliee.
Gold Bent a letter to Holiday, on July 3,
1986. indicatiDa that he no longer wished to
operate the Holiday }{.n... City franchiae.
Holiday reeponded on July 8, 1986, ,...lrlng
reflll'llDCI to the noncompetition c1a1lll of
the qreement. OIl July 30, 1986, Holiday
notified Gold that his franchise would be
terminated in ninety (90) days or on October
30, 1986, if he had not paid the franchiee
feee which were in arrears. The feee were
not paid.
Gold continued to accept both Holiday
and American reatals during the spriDa and
summer of 1986. Holiday officials gained
actual knowledge that Gold wu accepting
American rentals at the Holiday frani:hiae
locatioua on September 18, 1986.
Gold statee that the licellle qreement
with American wu not fonnally entered
into until AuguIt or September of 1986. The
Ucellle qreement, however, is dated March
31, 1986. The evidence shows at the very
leat that Gold wu operatiDa u a de facto
licenaee of American u early u April 1986.
IuIIn_ Franctllll Guidi
,
)
.. :-:.:.(N~A.- 1Lr.1I
TIle HOliday &CI~m.....t _ita uiniii lift
,pod~ltecL It oIovideI that Gold wiD DOt
ClII1Ipete with Holiday for a D8riocl of two
yeue......-,.;"g upoIl tbe effective termi-
natioll of the apwn-,t, TbI Olurt ftIIlII
that the lII1'een...-t WII eO'ectively termi-.
nated on October 30, 198&, II provided In
the letter to Gold OD July 30, 1986. The
gqraphic ICOpe or the covenant ia limited
to a seventy.five (7&) mile radiUl of the
Ucellle area. Both Miaaouri, see Naaooal
SWcb .md Chemical Cozp. v. Newm.m, 677
S.W. 2d 99, 104 (Mo. App. 1979), and Flor-
ida, see Fla. Stat.Ili42.33(2)(b). enforce cove-
DaIlta not to compete if n-..",.hly limited u
to time, area and 8CIIpI. The covenant in the
..._t cue meetI thoee requinmmtL
The qreement, also, providee that any
rem.in1ng 1_ period will be .-il"oad to
Holiday upon tenninatiOD of the qreement
if Holiday 80 iuatructa Gold. Furthermore, it
provides that all phone numbers U8ed in con-
nection with the Holiday franchiee are to
BlBigned to Holiday upon termination of the
apeeme"t.
[.P.relimiJwy lDjwu:tion)
The Eighth Circuit Court of Appeals hu
developed a four part test to be utilized in
determining whether a preliminary injunc-
tion ahould iaaue. These four parts are: (1)
the threat of irreparable harm to the
movant; (2) a balanciD& of the bardahipe
between the respective parties; (3) the
movant's likelihood of ..,.. on the merits;
and (4) the public interest. See. Dat.apbue
SystelJ18, Ine. v. C.L. Systems. Ine., 640 F.2d
109, 113 (8th Cir. 1981).
[lrreplU'llble Harm)
There is a threat of irrepanhlehann to
Holiday. Holiday tumed over to Gold an
olllOiDa franchiae in January of 1983. Ita
neet of vehicles wu leued to Gold. It
BlBigned ita 1_ at the JC.n... City Interna.
tional Holiday Inn to Gold. Gold baa eu-
cuted new leuee on these pftJftl- In April-
June 1986, Gold began aa:epting reDtaII
from American cuatomera at the Hol}day
office. He continued to conduct a dual bull-
nfl8ll out of the Holiday fnn..hl... at leat
until September of 1986. BecaWll! Gold had
an exclusive licellle, Holiday dOlI not have
another franchiae in }{.n... City. Gold baa
diverted both. potential and future cuatom-
en from the Holiday II)'8tem by 11II of tbe
phone numben listed in Holiday ad'v...r
I1IeDta includiDa the Yellow Papa, caatom-
ell who 11II the rental system due to ita
location and past IIlltiafied CII8tomen of tbe
,8673
.
Holi~ IYItetD. Thia _ of...wi-- amtin-
'* . Gold Itill .. ODe of the te1e-
phone. numbera liated ita the Yellow PIIII..
a Holiday number to conduct ..win... for
hia Ameiican fflln..hl.. UId .. late ...Nov-
ember wu UIiJII aDOther plume nllm"'r for
~1Ill:e P\UPCIIlt. TbInl II a amtinWlUl
Holida IDa aufl'ered by the ...,dwill of the
y syUem.lt would be _t........y diffi.
cul~ to calculate the IUDClUDt ordam.1fI8
which Holiday hu aufl'ered and will con-
tine ue to suffer becallll of the breach of the
ran..hl.. qreemeat.
[Balance 01 Hanialtips]
A hIIl.."I'I"1 of the hudahi.. b..t"e8J1 the
re.a-:tive partiee.reval that the equitiee in
~ cue are fairly h.1....-I. U an iDjunction
II iB8Ued Gold will DOt be able to compete for
car rental bomn.... within the ana deals-
nated in the qreemeat. He hu a neet of
approximately 6Ii vehiclee which he will not
be allowed to operate. Plus, he will not be
able to operate the American franchise
which he pW'l'h"ed.
Holiday, on the other hand. continuee to
be harmed in that it no longer hu a
franchiee operating in the ICan... City mar.
keto Allowing Gold to continue to operate
the American franchiee in the market not
only preeenta competition for Holiday, but
also, deetroys Holiday's only buaineee in the
market. Gold did not inform anyone with
the Holiday system when he lmt began
operating the American franchiee. lnatead
he chose to operate the American franchiee
in a clandeetine fuhion out of his Holiday
location. The buaineeeee of the two competi.
tora were operated side by aide out of the
same location without the knowledge of any.
one at Holiday. Gold wu aware of the cove-
nant not to compete ita early March, 1986, u
he had written American that he had devel-
oped a plan to get around the COVeDaDt.
Even before this plan could produce any
results Gold began accepting American
rental C\18tomera. Gold willfully and inten-
tionally breached the covenant not to com.
pete and for a period of several montha
attempted to conceal this breach from Holi.
day. Under theee circumatancea the equitiee
simply do not favor Gold. See, SIgma Chemi-
cal Co. v, Harris, 686 F. Supp. 704, 711 (W.D.
Mo. 1984).
[Lihlibood of8ua:eeeJ
Holiday hu shown that it hu a high like-
lihood of sua:eea on the merits. The agree-
ment and ita terms are undisputed. For
Holiday not to aucceed on the mariti, Gold
must prove that the agreement wu induced
118613
by rraud. See, Butt ..lvJ' v. .Dan.., 1589
S.W.2d l508.1511 (Mo. 1980).IWON ......
iDI each ..1I"PtioD ofrraud it. important to
note eeveral of the factL ODe, Gold operated
the Holiday fflln..h- ror over two yeIII,
accepting the beaefita derived rrom the
qreement. Two, Gold WII aware of the
netrictive COVeDant and ita effecta, a plan to
pt around the covenant and itaeffecta.
Three, while operating under the licenIe
qreeeDt with Holiday, Gold began negotia-
tions with American concerning the
purchase of a fraJl"hl.... Four, Gold wrote
American that he had developed a plan to
pt around the covenant and ita effects. Five,
Gold accepted American reatala while still
opera~ the Holiday rn"..hl.., and did 80
for a period of at teat five IDOntha without
the knowledge of Holiday. Sfz, the rtnt time
Gold allepd that the ~t WII induced
by fraud wu with the iliD& of the complaint
ita this case.
[Fraud)
Gold made approzimately eight allega.
tions of fraud. FirBt, Gold allepB that he wu
to receive depreciation rebatea on the neet
of vehiclee at the }Can... City franchiae
when he purchued it. The option qreement
provided that Gold would purc:hue the
vehicles currently being Uled at the
franchiee. The purchue, however, wu sub-
ject to Ford Credit Corp. (Ford), approving
the uaumption of Holiday's loan on the
vehiclee by Gold. Gold wu not able to meet
the credit requirementa of Ford. Becalllll
Gold wu not able to uaume the loan the
agreement wu modified. Holiday' now
would leue the vehiclee to Gold at Ita coat
from Ford. The modification qreement pro-
vided that the owner of the vehiclee would
receive the depreciation rebates. The owner
WII Holiday;
Second, Gold allegee that neet inIurance
WII to be provided at coet by Holiday. There
is not P8r8UUive evidence to BUpport this
allegation in the record. Furthennore the
agreement allows Gold to secure hie own
fieet iDBllraDce if he can obtain a better rate.
On one occuion Gold did 80. Certain admin.
istrative 8Xpenaee and a potential for a profit
if loeeee for a given period are low are calcu.
lated into the rate Holiday is goq to charp
ita fran..h;... that purchue neet inIurance
from it. Gold includee theee very same fac-
ton in the amount he charne car rental
CUItomen who purchue liability inlurance
on their rental car. Gold stated that he
would not object to the inclUlion of the
administrative expenaee into the calculation
of his premium rate u long u he would have
0111I, ~men:e CIurt",llolIM. lno.
, .
0,
.\
.
,.
..
".. ,
been inform.s oflL Tbla at-i iDdi.
cet.. that ... if the..... -tatiaD wee
made that fIaet b....AO. Wauld be IOId at
COlt, it waa DOt a ..--ntial fldor indw:iua
Gold into the III......-.L - -
Third, Gold .u.... that Holld.y Rated
that the KaIIIIII aty f,.....hl- had a IUb-
Btantial ."'OUIlt ollDftlDlllll1t ....;..- In
1982. Holiil.=:. beea awarded the GSA
contract for City. The contract 11 bid
out each year u provided in aovemment
f8IUlatioDl. Holiday bid on the 1983 con-
tract. In late December, 1982, Holiday
leamed that the contract prollably would be
awarded to Thrifty RlDt,.A.c.r, a competi-
tor.. The ~ biddlnc pn.. favon IIDall
bulln..... Holiday contacted the GSA,
believUul that in the ........',...11"1 year Tbrifty
had conaucted too mUch ....;..... to be c:J.u.
aified u a ImIll "":-v- It wu not until
!"ebruuy, 1983, that Holiday learoed that
Ita attempt had beea nn.,(. f'ul and that
the GSA contract had been awarded to
Thrifty. Holiday did not repreeent that it
would or had secured the GSA contract for
1983 to Gold. Gold wu informed of the cor.
Npondence with the GSA u early u Janu-
ary 20, 1983. Even after leat'1linl that the
contract had beea awarded to Thrifty, Gold
did not make any alleptions of fraud to Hol-
iday concemina this aubject matter.
Fourth, Gold allepa that Holiday made
r~ ,rePl'ell!'ntations about the BCCOWIting
trainmg which he would receive u a liceDBee
of the system. Holiday instructed Gold on
the proper method of keepina the day to day
recorda of the fr.n..hl... dlllinl his week
trainina aeeeion in Florida. An official of
Ho!i~ay later gave Gold 80me 8U~~~:.mental
trammg at the Kanau City fran . . Gold
~tified ~t he believed that Holiday wu
golllg to Il1ve him an utensive tr-ln1ng
course in accounting which would enable
him to perfonn all of the accountbtg work
for the franchise. The Court finds that there
ilsimply not penuuive evidence to eetab-
liah this allegation.
Fifth. Gold allepa that Holiday miarepre-
sented that it wu the fifth 1uaat car rental
system in North America. Gofd hu no per-
80nal ~owledp that thiI etatement is false.
His baaiB for the alleption illrom "'.p'~ne
articlee which he hu read. Lee Netteratrom.
preeident and ~rity st....lrholder of Holi-
day, teetified that the statement is hued
upon the Dnmho,l' of locations being operated
by Holiday. He further stated that he
believa the statement to be true. Gold hu
not preeented permuive evideace to eetab-
llah the alleption that Holiday wu not the
fifth larpat car rentalsyatem in 1982.
1IuII.... '1'IIIClhIIe Guide
SIDh, GoId.1I 11 that RnJld..y u.ir.......
..tad that it had D~oua ~te
1Il"""P'u. Gold wee abawD a lilt of CllIIii1uiII
which had received a "'-JIlt cud' from
I'ftUd"J, A ........p-IIy'.1WII8 could appeer OIl
tbe lilt either by a local IJ.:- II nqt.-il\l a
~:~~~i~orf::=
city and state 0 tile COIftp"ny'. held-
quartera illilted alonaide tbecomplny'.
name on the corporate llet. ThiI should alert
the reader that many of the buaineeeealilted
on the corporate aa:ount list were of a local
nature. Gold stated that he believed that he
would derive buaineee from the Bccounta on
the lilt. Gold testified that to the beet of hie
Imowledp only once in the two yeara that
hi operated the Holiday fl'l'n..hlu WII a die-
count cardpreeented for \III. Lee Netter-
etrom teItified that the employeee of tbe
campania receiviDa the diICOunt carda were
not Iequired to 11II Holiday, rather it wu a
service provided by Holiday for the compa-
niee to utilize at their option. The Court
dOlI not fmd perauuive evideace to support
Gold's alleption that the corporate .rwount
lilt wee materially milrepreeeDted.
Seventh, Gold allepa that Holiday made
financial misrepresentations u to the
upenaes incurred by the Kanau City
franchise during the months of May
through October 1982. Holiday provided
Gold with a profit/l~ statement for those
months prior to his purchase of the
franchiee. The profit/l~ etatementa were
pnpared on a cub now huia rather than an
accrual buia. Gold claims that the account,.
ina method II8ed by Holiday in preparing the
statementa should have been disclosed. He
teetified that the expetI8eI incurred by the
franchise were miaetated becallll certain
apenaee which were paid at the flrllt of the
year should have beea amortized over tbe
entire year. Holiday did not make any repre-
sentations u to the accounting method UIed
to prepare the profit/l~ etatementa. There
11 not any testimony in the record that the
aa:ounting method UIed by Holiday is DOt
acceptable in the accountina community.
The Court dOlI not find perauuive evidence
in the record to support an allegation of
fraudulent miarepreeentation.
Eiahth. Gold allegee that Holiday stated
that group inIUrance wu available to the
lillllr'-_ Bnd their emplo)'llllL Holiday bel
no ew:h pnJll'l1lL Lee Nett.u.t&uua teltif'ted
that ew:h a statement did appear in the Hol.
iday Procedure Manual givea to Gold. He
characterized the statement u a ml.hk,; in
the manual. Holiday did attempt to provide
a group life and health plan for ita li....~ III
118673
. ,
, .
.', .
.
.
.,1984, 00......., thin WII not IIIfftcieDt aary iDjll~on doqill~ ..... in thie ....
tere.t OIl the put of the 110.- I to make 'I'M Court -.by orden Jay Gold and Gold
. P'Oup plan flaanciaUy reuibl.. Gold " Son. 1Dc., oa or before Decemb- 80, 1985,
amed in early 1983 that I'''''ld~)' did not - to:
:tually provide a poup iIImraID' plaIl far
'."- t>. and took 110 actiaa .'- Holi-
1)' at that time. The Court doeI not find
muuive evideace to ...hI... that the
roup insurance wu a material factor induc-
11 Gold to eater the apeetMltt.
The Court f1Dda that there iI not perBUa'
- ive evidence to 8lU:bliah the allep.tioDl of
raw! In the inducement attempted to be
roven b1 Gold. The Court, ~ coDCludee
bat Holi~~ libly ..'...-Ion the mer-
la in ita for perm. neat ~unctive
. -elief apiDIt Gold.
[Public mtelM)
" There iI a public intuM in ~ting an
.' 'on in this cue. The public hu an
interest in enfo~ covenanta not to com-
;Jete contained within valid contracts u long
11 the covenant is reuonably limited in
, ~, duration and pcIIraphic recion. See
s;,m. Cbltmical Co., at 711.
The Court holda bued IlpoD ita applica-
tion of the Dae.pbae teet, that a prelimi-
(1) uecute all dOCWlleDta n<<Ill"'Y to
Iaip and tranafer to HolidIy the h.1.n... of
tb8 1_ of the premieee located at 11382
Plaza Cirde, u set out in the lice1IIe qree-
ment;
(2) transfer each and every phone number
UIId by Gold and Gold Be Son, 1Dc., in con-
nection with the advertisement of the Holl.
dIy fran..hl... in Kanau City, U set out in
l\cen.. apeement; and
(8) refrain from violating the ccvenant not
to compete contained within the llcelllMl
apeemeat with Holiday, for a ,~riod of two
yeara commenciD& on October 30, 1985, for
the geographic retPon of Clay, Jackson and
Platte countiee in Miuouri, and Jolmaon
and Wyandotte, ccnintiee in ,IC...... and for a
lMIVenty-fjVll (76) mile radius surrounding
IUoCh recion.
So ordered.
[~8674] Poultry Growing Operations Not "Business Opportu-
nity"
WUey B. BunUq,Jr. v. P.rdue,lDc., aDd P.rdu. Farm.,lac.
U.s. District Court, Eastern District of North Carolina, New Bern Division. No.
82-124-Civ-4. Filed June 14, 1985.
North Carollaa BUllae.. Opportunity Salea Act
BUlin... Opportunity Lawe-Cov.ral. of Law-Pre-emtiDI CODtract-
Start of N.w BUlla... CoaUauatioD or EspalllioD of BUliD....-An independent
chicken grower's contractual relatioDBhij) with a poultry producer wu not a "busineee
o~rtunity" within the North Carolina Buaineee Opportunity Salee Act becallll the partiee'
imtial contract wu eucu.ted prior to the enactment of the statute and aubaeQuent contracts
'ftre not euc:uted for the purpc:lIe of etarting a buaineee. The etatute detmee ''buaineee
opportunity" u the "sale or 1_ of any products, equipment, BUppliee or aervicee for the
purpose of enablina the purchaser to start a t!o.mn_' There wu no queeUon that the
grower initially contracted with the producer Cc: to the effective date or the buain_
opportunity law and that the second contract eea the partiee enabled the ~r to
continue or expand the buain-. rather than to iItart a bueineee. Thua, any violation of the
statute would have occurred before the etatutebecame operative. Back ref.reacH: 127&,
US8.
""BUline.. OpportaDity Law.-Cov.rq. of Law-Bal. ~uirem.at-AbI.nc.
of Sal..-AD independent chi..k.... Slodr's contractual relatioDBhip with a poultry pro-
ducer wu not a ''btmln_ opportunity" within the North Carolina Buaineee Opportunity
SIlee Act. since there WII no sale of poultry baL..n the grower and producer. The defmi-
tion of "bulin_ opportunity" requires a sale or 1_ of product:a, equipment, BUppliee, or
8Il'vicee. for the purpose of enabling the purchaser to start a buaineee where the seller makee
01..., Commerce Clelrtlll HolM, lno.
.