Franchise Agreement
The original documents were scanned as an image. The original file can be downloaded at the link above.
Sample Franchise Agreement
FRANCHISE DEPOSIT AGREEMENT
THIS FRANCHISE DEPOSIT AGREEMENT ("Agreement") is entered into between Farmer Boys Food, Inc., a California corporation ("Farmer Boys", "we," or "us")
Aand__________________________________________________________________
[prospective franchisee's full iegai name] ("you") as of the date signed by us and written opposite our signature:
A. We grant franchises for FARMER BOYS® Restaurants. You acknowledge that you received a copy of our Offering Circular, containing a copy of the Deposit Agreement as an exhibit, at least ten (10) business days before you signed this Agreement.
B. You would like to have a franchise to operate a FARMER BOYS® Restaurant ("Restaurant"). However, before you may sign a Franchise Agreement, we will require you to find a specific site for a Restaurant ("the Approved Location") that is available for lease or purchase and that is in our sole judgment satisfactory for the operation of a Restaurant. The purpose of this Agreement is to provide for your initial deposit of funds in exchange for our assistance while you are looking for a site.
NOW, THEREFORE, in reliance on and in consideration of the above facts and the terms and conditions stated below, the parties agree as follows:
1. DEPOSIT
Upon signing this Agreement, you deliver to us the sum of ten thousand dollars ($10,000) ("Deposit") to be used in any manner in which we decide to use it. The entire Deposit will be applied toward your initial franchise fee for a FARMER BOYS® franchise unless this Agreement is terminated as described below. We will not refund the Deposit under any circumstances.
2. GRANT OF RIGHT
We grant to you, for twelve (12) months from the date of this Agreement, the nonexclusive right to seek an Approved Location that is available for lease or purchase and that in our sole judgment is satisfactory for the operation of a Restaurant. You understand that we may grant other depositors the right to seek sites while this Agreement is in effect and that Farmer Boys may also develop company locations.
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3. SITE LOCATION
You must, on your own initiative and at your own expense, find and secure the site for the Restaurant. Our prior approval of the proposed site and of the proposed lease must be obtained in writing. We may not withhold our approval unreasonably.
3.1. Proposal
To seek our approval of a site that you find, you must complete and submit our Site Evaluation Form. We will base our approval of the site on the general guidelines for suitable franchise premises that are stated in the Manual. By approving a particular site for the premises of a Restaurant, we do not warrant that the Restaurant operating at that location will be successful.
To seek our approval of the lease or purchase agreement for the premises of the Restaurant, you must provide a copy of the proposed lease or purchase agreement or a lease summary. The terms of the lease or purchase agreement must allow you to operate profitably under the terms of the Franchise Agreement, in our reasonable discretion. A lease must grant us an option, without cost or expense to us, to assume or authorize our assignee to assume the lease if the franchise agreement is terminated or if you should fail to cure a material default under the lease within the time allowed by the lease. Your lessor and you may meet this requirement by adding the language in the lease as listed in the Lease Provisions in the form of Attachment 1 to this Agreement. If you purchase the land or premises for the Restaurant, under the Franchise Agreement you will grant us an option to purchase the property from you or your assignee upon termination of the Franchise Agreement.
3.2. Our Obligation
AWe will also look for suitable sites for FARMER BOYS® Restaurants. If AwŁ find* an appropriate site, Awe haAyj the right to develop the site Aourselves without offering it to you or to any other prospective franchisee. If awjj doA not wish to develop the site Aourselves, Awe will offer the site to Aour depositors and will award the site to the depositor with the highest priority of those who accept the site in writing within seven (7) days after the offer is made. The order of priority is as follows: (a) any existing franchisee who has signed a Deposit Agreement; (b) the depositor with the earliest dated Deposit Agreement; (c) the depositor with the second earliest dated Deposit Agreement; and (d) so on.
As a condition of offering you a site that Awe haAv§ found, Awe are likely to require that you lease or sublease, at our sole option, the land on which you build your restaurant from our affiliate, Havadjia Holdings.
You may have difficulty in finding a site without Aour assistance. However, Awe cannot and doA not guarantee that Awe will find a mutually acceptable site within
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your preferred geographic area. By awarding vou a site, we do not warrant that the Restaurant operating at that location will be successful.
4. EXPIRATION AND EXTENSION
If this Agreement expires before you have found an Approved Location, you may submit a written request for extension of the Agreement. We will decide, in our sole discretion, whether to extend the Agreement. Important criteria in making this decision are whether you have actively sought a site and whether you have rejected one or more sites that we have offered to you.
5. TERMINATION
We may elect to terminate your rights under this Agreement for any of the following reasons:
a. Our discovery that you have misstated or omitted any information required by the franchise application submitted to us or otherwise given to us in connection with your FARMER BOYS® franchise; or
b. Your failure to deliver to us a signed Franchise Agreement and the remainder of the initial franchise fee within five (5) business days of receiving from Farmer Boys a signature ready copy of the agreement following either (1) your receipt of written notice from us that we have approved of the site that you proposed; or (2) your delivery of notice to us of your acceptance of a site suggested by us; or
c. Your failure to qualify as a franchisee because of material changes in your qualifications or because you have not demonstrated your willingness to comply with the experience requirements described in section three of this Agreement..
6. DAMAGES
The parties acknowledge that the amount of actual damages that would result if we find it necessary to terminate this Agreement is uncertain and would be extremely difficult to ascertain. Consequently, if we elect to terminate this Agreement, you agree that we will be entitled to retain your deposit as compensation for our services under the Deposit Agreement.
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7. ADISPUTE RESOLUTION
7.1. Negotiation and Mediation
7.1.1.. Agreement to Use Procedure
The parties have reached this Agreement Ain good faith and in the belief that it is mutually advantageous to them. In the same spirit of cooperation, they pledge to try to resolve any dispute without litigation or arbitration. Thev agree that, if any dispute arises between them, before beginning any legal action to interpret or enforce this Agreement, thev will first follow the procedures described in this section. Good-faith participation in these procedures to the greatest extent reasonably possible, despite lack of cooperation by one or more of the other parties, is a precondition to maintaining any legal action or arbitration to interpret or enforce this Agreement.
7.1.2.. Initiation of Procedures
The party that initiates these procedures ("Initiating Party") must give written notice to the other party, describing in general terms the nature of the dispute, specifying the Initiating Party's claim for relief, and identifying one or more people with authority to settle the dispute for him, her, or it. The party receiving the notice ("Responding Party") has ten (10) days within which to designate by written notice to the Initiating Party one or more people with authority to settle the dispute on the Responding Party's behalf. These people are called the "Authorized People."
7.1.3.. Direct Negotiations
The Authorized People may investigate the dispute as thev consider appropriate-but agree to meet in person, by prearranged teleconference, or by video conference within fourteen (14) days from the date of the Initiating Party's written notice to discuss resolution of the dispute. The Authorized People may meet at any times and places and as often as thev agree.
7.1.4.. Mediation
If the Dispute has not been resolved within thirty (30) days after the initial meeting, either party may begin mediation procedures. Mediation will be conducted by and under the rules of the American Arbitration Association ("AAA"). The parties will share equally the costs of mediation.
7.2. Arbitration
Any dispute arising out of or in connection with this Agreement, if not resolved by the negotiation and mediation procedures described above, must be determined in Riverside, California by the AAA. This arbitration clause will not deprive either party of any right it may otherwise have to seek provisional injunctive relief from a court of competent jurisdiction. The arbitrator must be an attorney with substantial experience in franchise law.
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The parties ask that the arbitrator* limit discovery to the greatest extent possible consistent with basic fairnessA to minimize the time and expense of arbitration. If proper notice of any hearing has been givenA, the arbitrator will have full power to proceed to take evidence or to perform any other acts Anecessary to arbitrate the matter in the absence of any party who fails to appear\ The arbitrator will have no power toA 1) stay the effectiveness of any pending Termination of franchise; 2) assess punitive damages against either party: or 3) make any award that AmodifiesA or suspends any lawful Aprovision of this Agreement. All expenses of arbitration must be paid by the party against which the arbitrators render a decision. Judgment on any award may be entered by any court of competent jurisdiction.
8. MISCELLANEOUS PROVISIONS
8.1. Construction of Contract
Captions or paragraph headings included in this Agreement are for reference purposes only and will not in any way modify or limit the statements contained in any section or provision of this Agreement. All words in this Agreement will be considered to include any number or gender as the context or sense of this Agreement requires. If there is any conflict between this Agreement and any other document, this Agreement will control.
8.2. Governing Law
This Agreement is made in the State of California and its provisions will be governed by and interpreted under the laws of that State, with the following exceptions: (a) provisions of the Franchise Investment Law will not apply unless they would be applicable without this Agreement's designation of governing law; (b) the arbitration clause is exclusively governed by and should be construed in accordance with the Federal Arbitration Act; and (c) trademark rights will be governed by and construed in accordance with the Lanham Act.
8.3. Notice
The parties to this Agreement should direct any notices to the other party at the address below that party's name on the final page of this Agreement or at another address if advised in writing that the address has been changed. Notice may be delivered by facsimile (with simultaneous mailing of a copy by first class mail), courier, or first class mail. Notice by facsimile will be considered delivered upon transmission; by courier, upon delivery; and by first class mail, three days after posting. Notice of termination or nonrenewal must be given by a receipted form of delivery.
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8.4. Amendments
This Agreement may be amended, modified, or discharged, in whole or in part, only by a document in writing signed by all of the parties to this Agreement or by their authorized agents.
8.5. Successors and Assigns
This Agreement will benefit, and be binding on, the parties to this Agreement and their heirs, successors, representatives, and transferees.
8.6. Waiver
Waiver of any default or breach of this Agreement will not be interpreted as a waiver of any subsequent breach.
8.7. Integration
This Agreement, together with any exhibits or addenda to it, is the entire agreement between the parties with respect to the subject matter addressed in it and all other agreements, understandings, conditions, warranties, and representations are superseded by this Agreement.
8.8. Severability
Each section or provision of this Agreement will be considered severable. If, for any reason, any section or provision of this Agreement is determined to be invalid or in conflict with any existing or future law or regulation, the section or provision will not impair the operation of the remaining sections or provisions of this Agreement. The latter will continue to be given full force and effect and will bind the parties to this Agreement. The invalid sections or provisions will be considered not to be a part of this Agreement.
8.9. Disclaimer of Representations
NO REPRESENTATIONS, PROMISES, GUARANTIES OR WARRANTIES OF ANY KIND ARE MADE BY FARMER BOYS TO INDUCE YOU TO SIGN THIS AGREEMENT EXCEPT THOSE SPECIFICALLY STATED IN THIS AGREEMENT. YOU ACKNOWLEDGE THAT FARMER BOYS HAS MADE NO PROMISES OR WARRANTIES TO YOU CONCERNING THE APPROPRIATENESS OF THE APPROVED LOCATION FOR A FARMER BOYS® RESTAURANT OR CONCERNING THE PROFITABILITY OR LIKELIHOOD OF SUCCESS OF THE FRANCHISED BUSINESS.
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IN WITNESS TO these facts, the parties have signed this Agreement as of the date written below.
Dated: A
FRANCHISOR
FARMER BOYS FOOD, INC.
By:
Demetris Havadjias, ACEO
3452 University Avenue Riverside, CA 92501
Sign here if Depositor is an individual:
DEPOSITOR
Signature: Print Name: Print Address:
Sign here if Depositor is a company:
DEPOSITOR Print Company Name: ___________
Signature: By:
Print Name: ___
Print Title: ___
Print Address:
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LEASE PROVISIONS
Please give this language to your prospective lessor and ask that it be added to the terms of your lease. We normally will not approve leases that do not include substantially similar provisions:
Lessor will simultaneously give written notice to both Farmer Boys Food, Inc. ("Farmer Boys") and Lessee of any default under the lease. If Lessee does not cure any curable default during the time allowed by the lease, Farmer Boys may have an additional 15 days within which to cure the default on its own behalf as assignee of the lease. Notice will be directed to Farmer Boys at 3452 University Avenue, Riverside, CA 92501 .
If the lease is terminated for any reason or if the franchise agreement between Farmer Boys and Lessee is terminated for any reason, Farmer Boys may enter the leasehold premises for purposes of removing all signs and other materials bearing Farmer Boys trade name, marks or other commercial symbols.
If the lease is terminated for any reason or if the franchise agreement between Farmer Boys and Lessee is terminated for any reason, lessor consents to assignment, without further action on its part, of this lease to Farmer Boys. Under these circumstances, Lessor will not unreasonably withhold its consent to assignment of the lease by Farmer Boys to another Farmer Boys franchisee with financial qualifications comparable to those of Lessee.
Lessor may, upon Farmer Boys' written request, disclose to Farmer Boys all reports, information or data in Lessor's possession regarding sales made in, upon or from the leased premises.
The leased premises may be used by Lessee only for operation of a FARMER BOYS ® Restaurant.
ATTACHMENT 1
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SUBLEASE
THIS SUBLEASE ("Sublease") is dated as of_________________, and is made
between Havadjia Holdings, Inc., a California corporation ("Havadjia Holdings"), and A [franchisee's legal name],
("Sublessee").
RECITALS
A. Havadjia Holdings has previously entered into a Lease dated A [date] between Havadjia Holdings, as Lessee, and
____________________________________________, as "Lessor", a copy of which is
attached to this Sublease and by this reference made a part of it ("the Lease"), relating to
the premises commonly known as____________________________________________
("the Premises").
B. Farmer Boys Foods, Inc. ("Farmer Boys"), an affiliate of Havadjia Holdings,
and Sublessee have entered into a Franchise Agreement dated___________________
("the Franchise Agreement") for the ownership and operation of a Restaurant at the Premises.
C. Havadjia Holdings would like to sublease the Premises to Sublessee and Sublessee would like to sublease the Premises from Havadjia Holdings.
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. Sublease
Havadjia Holdings now subleases the Premises to Sublessee and Sublessee now leases the Premises from Havadjia Holdings on the terms and conditions stated in this Sublease.
2. Incorporation of Lease Provisions
All of the terms, conditions, and provisions of the Lease are incorporated in this Sublease by this reference, and except to the extent contradicted or modified by this Sublease, the terms, conditions, and provisions of the Lease govern the rights and obligations of the Havadjia Holdings and Sublessee, respectively, in the same way that they govern the rights and obligations of the Lessor and Havadjia Holdings, respectively. If there is a conflict between the terms and conditions of the Lease and this Sublease, then as between Havadjia Holdings and Sublessee this Sublease will prevail and control. In spite of the foregoing, the following provisions of the Lease will not be applicable to Sublessee: Lease Paragraph Nos. A
ATTACHMENT 2-A
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3. Term
3.1. Initial Term
The term of this Sublease will begin at: (a) the date when the term of the Lease begins, (b) the date when this Sublease is signed by the last of the signing parties, or (c) when Lessor consents to this Sublease, whichever is later. The term of this Sublease will end at same time that the term of the Lease ends, unless terminated sooner or extended in accordance with the provisions of this Sublease.
3.2. Renewal or Extension
If the Lease has provisions enabling Havadjia Holdings to renew or extend the Lease, then Sublessee has the same rights to renew or extend this Sublease, up to a maximum potential Sublease term of forty (40) years, including options. After a maximum of forty (40) years, this Sublease will end, even if the term of the Lease does not then end. As between Havadjia Holdings and Sublessee, any deadline for notice of exercise of any option rights in the Lease will be advanced ninety (90) days in the Sublease. Havadjia Holdings may renew or extend the Lease even if Sublessee does not extend the term of this Sublease.
4. Possession
Possession of the Premises will be delivered to Sublessee at the beginning of the term of this Sublease, as determined under Section 3.1 of this Sublease.
5. Rent
5.1. Base Rent
Sublessee will not pay the minimum, base, or fixed rent due from Havadjia Holdings to the Lessor under the Lease. Sublessee will, however, pay Havadjia Holdings, in equal monthly installments, the annual minimum rent ("Base Rent") stated in Schedule A to this Sublease.
5.2. Percentage Rent
In addition to Base Rent, Sublessee must pay Sublessor Percentage Rent, calculated as follows:
(a) Two hundred thousand dollars ($200,000)
(b) PLUS Annual gross sales (amount received by Sublessee and its related
parties for all goods sold and services rendered from the premises during the year)
(c) MINUS Sales tax and returns
(d) TIMES Four Percent (4%)
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(e) MINUS Base Rent
(f) EQUALS Percentage Rent
If components (a) through (d) of the above calculation do not exceed the Base Rent, no Percentage Rent is payable.
Percentage Rent is due, for each calendar year of the term of this Sublease, on the tenth (10th) day of the following January. A final Percentage Rent payment is due on the tenth (10th) day of the month following expiration or termination of the sublease. For purposes of determining percentage rent, Sublessee agrees to keep adequate books that show all sales and charges by Sublessee and any other people conducting any business upon or from the Premises. Sublessee must submit to Sublessor, for each calendar year of the term of this Sublease, on the tenth (10th) day of the following January, a written statement signed by Sublessee and certified by it to be true and correct, showing in reasonably accurate detail the amount of Gross Sales during the preceding year. The statements must be in any form and style and contain any details that Sublessor reasonably requires. If the first or last year of the term of this Sublease is not a full calendar year, the percentage rent, the Base Rent, and the two hundred thousand dollars ($200,000.00) will be prorated.
5.3. Other Lease Charges
Sublessee will also pay Havadjia Holdings all other monetary amounts of any kind or nature whatsoever that Havadjia Holdings is required to pay Lessor under the provisions of the Lease.
5.4. When to Pay
The Base Rent required by this Sublease and, except for property taxes, any other charges described above will be paid by Sublessee to Havadjia Holdings ten (10) days before the date that they are due under the Lease. Even if the Lease permits Havadjia Holdings to pay property taxes to the landlord in a lump sum annually, Havadjia Holdings has the right to require Sublessee to pay one twelfth (1/12) of the annual property tax bill each month with the Base Rent and other charges.
5.5. Where to Pay
The Base Rent and other charges described above must be paid by Sublessee to Havadjia Holdings, without deduction, setoff, notice, or demand, at the address below the Havadjia Holdings' signature on the final page of this Sublease, or at any other place Havadjia Holdings designates by written notice to Sublessee.
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5.6. Havadjia Holdings' Obligation to Pay Lessor
Immediately upon receipt from Sublessee of the Base Rent and other charges described above, or when funds are available at Havadjia Holdings's bank if payment is by other than cash, cashier's check, or bank wire, Havadjia Holdings will pay Lessor the corresponding sums due Lessor under the provisions of the Lease. Havadjia Holdings will be under no obligation to Sublessee to pay Lessor at any time that Sublessee is in default Aof its obligations to Havadjia Holdings under this Sublease. If any check given by Sublessee to Havadjia Holdings is dishonored by Sublessee's bank, then at any time afterward Havadjia Holdings may require that all future payments be made by cashier's check or bank wire at Sublessee's expense.
5.7. Late Charges and Interest
All payments which Sublessee is required to make to Havadjia Holdings under this Sublease will bear interest from and after their respective due dates until paid in full at a rate equal to eighteen percent (18%) per year, calculated and payable weekly, or the highest amount permitted by applicable law, whichever is less. Sublessee acknowledges that this provision is not Havadjia Holdings' agreement to accept late payments or a commitment by Havadjia Holdings to extend credit to or otherwise finance Sublessee's operation of the Restaurant. Sublessee acknowledges that his or her failure to pay all amounts when due will constitute a breach of this Sublease and, if not cured within any applicable cure period, grounds for its termination. Further, acceptance of any interest payment will not be construed as a waiver by Havadjia Holdings of its right in respect of the default giving rise to the payment and will not diminish Havadjia Holdings' right to terminate this Sublease on the basis of the default.
5.8. Partial Months
If the term of this Sublease begins or ends on a day other than the first or last day of a month, the Base Rent and other charges for the partial month or months will be prorated accordingly.
6. Security Deposit
Sublessee must deposit with Havadjia Holdings on signing of this Sublease a security deposit in the sum of $ A as security for the performance by
Sublessee of its obligations under this Sublease. If Sublessee is not in default at the expiration or earlier termination of this Sublease, the security deposit will be returned to Sublessee. Havadjia Holdings' obligations with respect to the security deposit are those of a debtor and not a trustee. Havadjia Holdings may commingle the security deposit with its general and/or other funds, and it will have no obligation to pay Sublessee interest upon the security deposit.
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7. Use of Premises
During the term of this Sublease, the Premises must be used exclusively for the purpose of operating a franchised Restaurant in accordance with the Franchise Agreement, the Lease, this Sublease, and all applicable laws, regulations and ordinances, and for no other purpose without the express written consent of Havadjia Holdings.
8. Performance of Lease Obligations
8.1. Nonmonetary Obligations
If any of the terms or conditions of the Lease require Havadjia Holdings to perform any act, other than the payment of money directly to the Lessor, all of these terms and conditions are incorporated into and made a part of this Sublease. Sublessee will perform all these obligations on Havadjia Holdings' behalf.
8.2. Lease Restrictions
If any of the terms or conditions of the Lease restrict the rights of Havadjia Holdings, all of those terms and conditions are incorporated into and made a part of this Sublease and Sublessee will abide by them.
8.3. Lessor's Breach
Havadjia Holdings will have no liability to Sublessee because of Lessor's breach of the Lease. As long as it can do so without incurring expense, Havadjia Holdings will cooperate with Sublessee and exercise due diligence in all reasonable respects to enforce the terms of the Lease against Lessor.
8.4. Liability for Lease Termination
If the Lease terminates as a result of a default or breach of some obligation contained in the Lease, then, as between Havadjia Holdings and Sublessee, the party that caused the default will be liable to the nondefaulting party for the damage suffered as a result of the Lease termination.
8.5. Enforcement of Lease
Nothing contained in this Sublease is intended to abridge or restrict Havadjia Holdings, as lessee under the Lease, from enforcing the Lease as between Havadjia Holdings and the Sublessee.
9. Insurance and Condemnation
9.1. Procurement and Maintenance
Sublessee agrees to procure and maintain, at its sole cost and expense, all of the insurance required of Havadjia Holdings by the Lease and to otherwise comply with all of the insurance obligations stated in the Lease. In addition, Sublessee will cause Havadjia
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Holdings and any other person designated by Havadjia Holdings to be named as additional insureds on the insurance policy or policies and to give Havadjia Holdings copies of these policy or policies.
9.2. Use of Proceeds
If a casualty occurs that is covered by insurance, the Premises must be rebuilt with the proceeds of the insurance unless the Lease mandates another result. Sublessee will pay any deductibles and will fund any shortfall if the proceeds of the insurance are inadequate. If a casualty occurs that is not covered by insurance, then Sublessee will rebuild the Premises, at its sole cost and expense, unless the Lease mandates another result.
9.3. Condemnation
If all or any portion of the Premises are taken by condemnation, if the Premises can be rebuilt then they must be rebuilt to the extent possible unless the Lease mandates another result. The award of the condemning authority will be used for this purpose and Sublessee will fund any shortfall if the award is inadequate.
9.4. Right to Terminate
If the Lease gives the Lessor any right to terminate the Lease upon the partial or total damage, destruction, or condemnation of the Premises, this termination right will also apply to this Sublease.
10. Consent
Whenever the Lease provides that the Lessor's consent is required for an act or omission, then the consent of both the Lessor and Havadjia Holdings to the act or omission will be required. Whenever the Lease provides that Havadjia Holdings's consent is required for an act or omission, then the consent of both Havadjia Holdings and Sublessee to the act or omission will be required. In all cases where the consent of Havadjia Holdings or Sublessee is required, the same will not be unreasonably withheld, delayed, or conditioned by Havadjia Holdings or Sublessee.
11. Assignment and Subletting
11.1. Transfer
Sublessee may not assign or in any manner transfer this Sublease or any interest in this Sublease or further sublet the Premises or any part or parts of them, nor permit occupancy by anyone with, through or under the Sublease, except in connection with a transfer of the Franchise Agreement and upon the terms and conditions contained in the Franchise Agreement and the Lease. This Sublease and the Sublessee's interest in it will not be assignable by operation of law.
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11.2. Failure to Obtain Approval
Any attempted or actual transfer of this Sublease (whether by way of an assignment, sublease or otherwise) by Sublessee without Havadjia Holdings' prior written consent will be null, void and of no force or effect, will convey no right or interest to the purported transferee, and will constitute a material breach of this Sublease.
11.3. Assignment by Havadjia Holdings
Havadjia Holdings may at any time assign this Sublease and the rights, privileges, duties and obligations under it, subject only to the requirements of the Lease.
11.4. Indemnity
Sublessee indemnifies and holds Havadjia Holdings and its affiliates harmless from and against all claims and demands of any type, kind, or nature made by any third party which arise out of or are in any manner connected with Sublessee's use and occupancy of the premises or this Sublease other than claims or demands arising out of or in connection with the grossly negligent act or omission or wilful misconduct of Havadjia Holdings, Farmer Boys, or their employees, agents or contractors.
12. Havadjia Holdings' Right to Cure Defaults
At any time during the term of this Sublease and without notice to Sublessee, Havadjia Holdings may, but will not be obligated to, cure or otherwise discharge any default by Sublessee under this Sublease. Any and all costs or expenses which Havadjia Holdings may incur for this purpose will be immediately due and payable in full without further notice or communication to Sublessee of any type, kind or nature. Havadjia Holdings will have the same remedies for the recovery of these costs and expenses as for the recovery of rent under this Sublease and at law.
13. Default and Termination
In spite of anything to the contrary in this Sublease, Havadjia Holdings will have the right to terminate this Sublease, enabling Havadjia Holdings to exercise all of the remedies of a landlord and to file an action for unlawful detainer, upon the happening of any of the following events:
(a) Any failure by Sublessee to pay the Base Rent within five (5) days of the due date for the Base Rent, and any other failure of Sublessee to pay any other amount due under the Sublease within five (5) days of written demand.
(b) If the Franchise Agreement dated A between Farmer Boys and Sublessee expires and is not renewed or is terminated for any reason;
(c) If the Lease should be canceled or terminated by reason of any act or omission of Sublessee prior to its expiration date; or
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(d) If Sublessee should suffer or permit the occurrence of any act or thing which
would constitute an event of default by Havadjia Holdings under the terms of the Lease and fail to cure the default within any applicable cure period.
14. Legal Proceedings
If Havadjia Holdings begins any summary proceeding to enforce this Sublease against Sublessee or to remove Sublessee and Sublessee's property from the Premises, Sublessee may not assert any counterclaims or assert as a defense to any such proceeding that Farmer Boys had no right to terminate the Franchise Agreement or that Farmer Boys had violated the franchise laws, it being the intention of the parties that these counterclaims must be brought against Farmer Boys, if at all, in a separate proceeding.
15. Notice
If the Lease requires that notice be given to the Lessor, then whenever Havadjia Holdings gives notice to Lessor it will also notify Sublessee in the same manner and whenever Sublessee gives notice to Lessor it will also notify Havadjia Holdings in the same manner. The initial addresses for notice to Havadjia Holdings and Sublessee are written below their names on the final page of this Sublease. Notice may be delivered by facsimile (with simultaneous mailing of a copy by first class mail), courier, or first class mail. Notice by facsimile will be considered delivered upon transmission; by courier, upon delivery; and by first class mail, three days after posting.
16. Entire Agreement
This Sublease, including all of the provisions of the Lease incorporated in this Sublease by reference, describes all the agreements between Havadjia Holdings and Sublessee concerning the Premises. All other agreements, understandings, conditions, warranties, and representations are superseded by this Sublease.
17. Joint and Several Liability
If Sublessee is or becomes a partnership, corporation, or limited liability company, or if this Sublease is assigned to a partnership, corporation, or limited liability company, all general partners, shareholders, or members must guaranty this Sublease and be bound jointly and severally by all its provisions. The guarantors to this Sublease represent and warrant that they are the sole owners of Sublessee.
"REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK**
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@PFDesktop\::ODMA/WORLDOXW:/WDOX/CLIENTS/FBF/012/00013469.WPD Sublease Agreement April 24. 2006
IN WITNESS TO THE FOREGOING, the parties to this Sublease have signed this Sublease as of the date stated above.
SUBLESSEE HAVADJIA HOLDINGS, INC.
_______________________________ By:____________________________
[franchisee's legal name] Print Name:_
By:__________________________________ Print Title: _
Print Name:___________________________ 3425 University Avenue
T... ., Riverside CA 92501
Tltle',f any:--------------------------------------------- 909/275-9900
Address: 909/275-9930 fax
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@PFDesktop\::ODMA/WORLDOX/W:/WDOX/CLIENTS/FBF/012/00013469.WPD Sublease Agreement April 24, 2006
COVENANTS OF SHAREHOLDERS, PARTNERS, OR MEMBERS
The undersigned individuals represent and warrant that they are all of the shareholders, partners, or members of Sublessee. Accordingly, to induce Havadjia Holdings to enter into this Sublease, each of the undersigned individuals jointly and severally guarantees the performance by Sublessee of its obligations under this Sublease and each of the undersigned individuals jointly and severally agrees to be bound by all of the provisions of this Sublease.
Dated: A
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@PFDesktop\::ODMA/WORLDOX/W:/WDOX7CLIENTS/FBF/012/00013469.WPD Sublease Agreement April 24, 2006
RENT
SCHEDULE A
@PFDesktop\::ODMA/WORLDOX/W:/WDOX/CLIENTS/FBF/012/00013469.WPD Sublease Agreement April 24, 2006
FARMER BOYS® RESTAURANT LEASE
1. Basic Provisions.
This paragraph 1 contains the Basic Provisions of this Lease. The Basic Provisions are further defined and explained in other paragraphs of this Lease and are to be read in conjunction with them.
1.1 Parties; Date: This Lease ("Lease"), dated for reference purposes only as of ___________________________[date], is made by Havadiia Holdings. Inc.. whose address for notice and
the payment of rent is 3452 University Avenue, Riverside CA 92501 ("Landlord"), and A , whose address for notice
is the Premises ("Tenant").
1.2 Premises: The real property, including all improvements now or in the future erected on it, commonly known as A and legally described Aas and generally described as land and a commercial or industrial building now existing or to be built, including all parking areas, landscape areas, walks, drives, trash enclosures, and other appurtenances ("Premises").
1.3 Term; Options: This Lease will be for an initial term of approximately Twenty (20)
years ("Original Term") beginning on the earlier of___________________________________[date] or the
date that Tenant opens the business to be conducted at the Premises ("Commencement Date"), and ending
on__________________, 2022 ("Expiration Date"). In addition, Tenant will have two (2) options ("Option(s)")
to extend the term of this Lease for ten (10) years per Option {"Option Period"). If no Option Periods are specified in this paragraph of this Lease, then references to an Option or Option Periods in this Lease will be considered surplusage and may be ignored. In spite of the above definition of the Commencement Date, all of the Tenant's indemnity obligations under this Lease, as well as the Tenant's obligations to carry insurance, will be effective at any time that the Tenant or any of the Tenant's agents, employees, contractors, subcontractors or any person acting at the request of the Tenant, is on or in possession of the Premises.
1.4 Rent:
(a) The rent per month for the Premises for the Original Term and any Option
Periods will be as follows:
MONTHLY RENT
From the Commencement Date until____________________________________, 2007 $
The next five (5) years $
The next five (5) years $
The next five (5) years $
The rent for the first five (5) years of each Option Period will be the greater of the rent for the five (5) year period immediately preceding each applicable Option Period, or the fair market rental value of the Premises as determined in accordance with the provisions of paragraph 3.4, below. The rent for the second five (5)
years of each Option Period will be increased by an amount equal to_______percent of the rent for the first
five (5) years of the applicable Option Period.
1.5 Security: On the signing of this Lease, the Tenant will pay Landlord an amount equal to the monthly rent as of the Commencement Date of this Lease as a security deposit. At the beginning of each five years thereafter, Tenant must pay Landlord an amount sufficient to increase the security deposit to the rent during the applicable period.
ATTACHMENT 2-B
@PFDesktop\::ODMA/WORLDOX/W:/WDOX/CLIENTS/FBF/012/00013469.WPD Restaurant Lease April 24, 2006
1.6 Permitted Use: FARMER BOYS® restaurant
1.7 Guarantor: The obligations of the Tenant under this Lease are to be guaranteed by A ("Guarantor"). If no Guarantor is identified in this paragraph of this Lease, then references to a Guarantor in this Lease will be considered surplusage and may be ignored.
1.8 Contingencies. Tenant acknowledges that as of the date of the signing of this Lease Landlord does not own fee title to the Premises, and the parties do not have the requisite permits or licences to construct the Premises or operate Tenant's business at the Premises. Therefore, this Lease will be contingent upon Landlord's either purchasing the Premises or acquiring a ground lease for the Premises, on terms that are acceptable to Landlord, in its sole and absolute discretion. The obligations under this Lease are also contingent upon the parties obtaining any permits and/or licenses (including but not limited to conditional use permits, building permits, and variances) that are required by applicable laws to enable Tenant legally to (a) construct Tenant's improvements to the Premises; (b) to install Tenant's signs on the Premises; and (c) to conduct its business from the Premises. Landlord and Tenant will, at Tenant's expense, initiate and diligently pursue each permit and/or license. Landlord will sign any applications and will provide Tenant with any further assistance and cooperation that Tenant may require in applications for these permits and licenses.
2. Premises.
2.1 Lease of Premises. Landlord leases to Tenant, and Tenant hires from Landlord, the Premises, for the term, at the rental, and upon all of the terms, covenants and conditions stated in this Lease. Unless otherwise provided in this Lease, any statement of square footage in this Lease, or any statement of square footage that may have been used in calculating rental, is an approximation which Landlord and Tenant agree is reasonable and the rental based on it is not subject to revision whether or not the actual square footage is more or less.
2.2 Acceptance of Premises. Tenant acknowledges: (a) that prior to the Commencement Date of this Lease it has satisfied itself with respect to the condition of the Premises and the present and future suitability of the Premises for Tenant's intended use, (b) that neither Landlord, nor any of Landlord's agents, has made any oral or written representations or warranties with respect to these matters other than as describe in this Lease, (c) that the Premises are subject to all applicable zoning ordinances, building codes and to all easements, covenants, conditions, restrictions and other matters of record on the Commencement Date, and (d) that Tenant accepts the Premises in an "as-is" condition, with all faults.
3. Term.
3.1 Term. The Commencement Date, Expiration Date and Original Term of this Lease are as specified in paragraph 1.3.
3.2 Holding Over; Surrender. Tenant must vacate the Premises upon the expiration or earlier termination of this Lease and Tenant. Tenant must indemnify Landlord against any and all damages incurred by Landlord resulting from any delay by Tenant in vacating the Premises when required. In spite of the foregoing, if Tenant fails to vacate the Premises upon the expiration or earlier termination of this Lease and Landlord accepts rent from Tenant, Tenant's occupancy of the Premises will be considered a "month-to-month" tenancy, subject to all of the other terms of this Lease, except that the rent will be increased by fifty percent (50%) over the rent in effect on the date of termination of this Lease. Tenant must surrender the Premises by the end of the last day of the Lease term or any earlier termination date, with all improvements, parts and surfaces clean and free of debris and in good operating order, condition and state of repair, ordinary wear and tear excepted. "Ordinary wear and tear" will not include any damage or deterioration that would have been prevented by good maintenance practice or by Tenant performing all of its obligations under this Lease. Tenant must repair of any damage occasioned by the installation, maintenance or removal of Tenant's Trade Fixtures.
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@PFDesktop\::ODMAAfl/ORLDOX/W:Art/DOX/CLIENTS/FBF/012/00013469.WPD Restaurant Lease April 24, 2006
The original documents were scanned as an image. The original file can be downloaded at the link above.