RUBIO'S RESTAURANTS, INC.

FRANCHISE AGREEMENT

FRANCHISEE: ____________________________

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RUBIO'S RESTAURANTS, INC.

FRANCHISE AGREEMENT

TABLE OF CONTENTS

PAGE

1. BACKGROUND........................................................1

2. AWARD OF FRANCHISE................................................4

3. TERM..............................................................5

4. DEVELOPMENT AND OPENING OF YOUR RUBIO'S STORE.....................6

5. FEES..............................................................9

6. MARKETING........................................................10

7. STORE RECORDS AND REPORTING......................................13

8. COMPUTER HARDWARE AND SOFTWARE SYSTEMS...........................15

9. MODIFICATIONS OF THE SYSTEM......................................16

10. TRAINING AND GUIDANCE............................................17

11. YOUR RUBIO'S STORE-- IMAGE AND OPERATION.........................18

12. MARKS............................................................21

13. ORGANIZATION OF FRANCHISEE.......................................23

14. TRANSFERABILITY OF INTEREST......................................24

15. COVENANTS........................................................27

16. TERMINATION......................................................28

17. OBLIGATIONS ON TERMINATION OR EXPIRATION.........................30

18. OPTION TO PURCHASE...............................................31

19. GENERAL MATTERS..................................................32

20. NOTICES AND PAYMENTS.............................................35

21. DISPUTE RESOLUTION...............................................35

22. ACKNOWLEDGMENTS..................................................38

GUARANTEE AND ASSUMPTION OF FRANCHISEE'S OBLIGATIONS.............40

EXHIBITS:

Exhibit 1: Franchisee Information

Exhibit 2: Current Form Of Releasing Language

Rider 1: Franchise Agreement Expiration Date

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RUBIO'S RESTAURANTS, INC.

FRANCHISE AGREEMENT

Date of this Agreement: ________________________________________

Franchisor: Rubio's Restaurants, Inc., a Delaware corporation

(Also referred to as "we," "us" or "our.")

Franchisee: ___________________________________________

(Also referred to as "you" or "your.")

1. BACKGROUND

1.1. We've developed, and plan to continue to develop, methods of

operating upscale, quick-service Mexican-style restaurants which offer a wide

variety of Mexican-style food, and certain other products, to a broad customer

base. These businesses, which are referred to in this Agreement as "Rubio's

Stores," feature a distinctive format and method of doing business, which we

refer to as the "System" (as defined below). The System and its components may

be changed, improved and further developed by us from time to time.

1.2. We own and operate, and selectively award franchises for

others to own and operate, Rubio's Stores using the System and the Marks (as

defined below). You've applied for a franchise to own and operate a Rubio's

Store at the Premises (as defined below) and your application has been approved

by us in reliance on all of the representations made in your application.

1.3. You understand and acknowledge the importance of our high and

uniform standards of quality, operations and service and the necessity of

developing and operating the Rubio's Store at the Premises in strict conformity

with this Agreement, the System and the Manuals (as defined below).

1.4. For purposes of this Agreement, the following terms have the

meanings listed below. Other terms used in this Agreement are defined and

construed in the context in which they occur.

"AFFILIATE" - Any person, company or other entity which controls, is

controlled by or is under common control with another person, company

or other entity, as well as any spouse, parent, child and/or sibling

and any entity controlled by any spouse, parent, child and/or sibling.

"AGREEMENT" - This Franchise Agreement.

"DESIGNATED EQUIPMENT" - Equipment that meets our requirements and is

to obtained and used by you in the operation of your Rubio's Store,

including (but not limited to) cash registers, computers and software.

"FRANCHISE" - The nonexclusive right to use the System and the Marks in

the continuous operation of a single Rubio's Store at the Premises

pursuant to the terms and conditions of this Agreement.

"GENERAL RELEASE" - A general release, in a form prescribed by us, of

any and all claims, known or unknown, against us and/or all Rubio's

Affiliates, excepting only those claims which, by applicable law, may

not be released. A copy of our current form of releasing language

(which is subject to change by us at any time) is attached as Exhibit 2

and, by signing this Agreement, you approve that language.

"GOOD STANDING" - "Good Standing" includes (but is not limited to) you

and each Affiliate of yours: (A) not being in default or threat of

default under this Agreement and/or any other agreement, or any other

legal obligation, to us and/or any Rubio's Affiliate; and (B) operating

each Rubio's Store, in which you

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and/or any Affiliate of yours has any ownership or other interest, in

full compliance with the Manuals and the System.

"MANUALS" - One or more handbooks, manuals, bulletins and/or volumes,

other written materials, and video, audio and/or software media

(including materials distributed electronically or otherwise),

regardless of title, containing (among other things) specifications,

standards, policies and procedures prescribed by us from time to time

and to be followed by you in connection with your development,

operation and marketing of your Rubio's Store and your performance

under this Agreement, including (but not limited to) all goods and

services to be sold and/or provided at or from your Rubio's Store

and/or in association with the Marks. The term "Manuals" also includes

all changes and supplements that may be issued by us in the future.

"MARKS" - The trademarks, service marks and other commercial symbols

now and/or in the future owned by, or licensed to, us and which we

designate, from time to time, to be used to identify the services

and/or products offered by Rubio's Stores, including (but not limited

to) the mark "Rubio's(R)" and design, "Home of the Fish Taco(R),"

"Pesky(R)" and design, "Health Mex(R)," "Baja Grill(R)," the Trade

Dress and certain associated logos.

"PREMISES" - The location at which you will operate a single Rubio's

Store, as permitted and accepted by us pursuant to this Agreement, and

as identified in Exhibit 1.

"PRODUCTS" AND "SERVICES" - Products and services designated by us from

time to time for use, sale, lease, rental or to be otherwise used,

offered and/or provided at or from your Rubio's Store, and/or in

association with the Marks, including (among other things) all

beverages, food products and paper goods served and/or used in or from

your Rubio's Store.

"RUBIO'S AFFILIATE(S)" - Each and all of the following, whether past,

present and/or future: each and all company(ies) and/or person(s)

acting by, through, under, in concert, affiliated and/or associated in

any way with us; each and all of the partners, shareholders, officers,

directors, agents, attorneys, accountants, and/or employees of us

and/or any of the foregoing; as well as each and all of the successors

and/or assigns of us and/or any of the foregoing.

"RUBIO'S STORE" - The Rubio's Store which you're franchised to operate

at the Premises pursuant to this Agreement.

"SUPPLIER" - "Supplier" includes (but is not limited to) manufacturers,

distributors, wholesalers and all others in the distribution chain

and/or process.

"SYSTEM" - The distinctive format and method of doing business now or

in the future developed, used and/or modified by us in the exercise of

our reasonable business judgment for the operation of a retail sales

outlet specializing in the sale of Mexican-style food, including but

not limited to: (A) distinguishing characteristics related to the

image, design, appearance, layout and color scheme of a Rubio's Store;

(B) design, style, color and other distinguishing characteristics of

fixtures, menu boards, signs and furnishings; (C) layout, design and

selection of equipment; (D) specifications for Products and as used in

preparing Products for sale; (E) methods used for selecting,

purchasing, marketing, displaying and selling Products; (F) operating,

marketing, training and other systems, procedures and standards; and

(G) the standards of quality, service and cleanliness used in the

operation of a Rubio's Store.

"TRADE DRESS" - The Rubio's Store design and image developed and owned

by us for Rubio's Stores, as it currently exists and as it may be

revised and further developed by us from time to time.

"US," "WE," "OUR" OR "FRANCHISOR" - Rubio's Restaurants, Inc., a

Delaware corporation.

"YOU," "YOUR" OR "FRANCHISEE" - The entity(ies) or individual(s)

signing this Agreement as Franchisee. (If there's more than one entity

or individual identified as the "Franchisee," each is jointly and

severally

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obligated under this Agreement.)

1.5. We only award franchises to individuals and entities that

share, and have made a commitment to, our mission statement, key objectives and

shared values. Without that commitment, it wouldn't be appropriate for you and

us to be involved in a long-term business relationship, such as a Rubio's

Franchise. Your commitment to the mission statement, key objectives and shared

values is one of the most important parts of your being a Rubio's franchisee and

that's why we've placed them at the beginning of this Agreement. You agree that

you'll continuously comply with, observe and support the following:

THE RUBIO'S MISSION STATEMENT

THE RUBIO'S MISSION IS TO OPERATE IN A MANNER THAT IS RESPONSIBLE,

PROFITABLE AND TO THE BENEFIT OF EMPLOYEES, GUESTS AND COMMUNITY. WE

PROVIDE THE HIGHEST QUALITY PRODUCT, SERVICE, CLEANLINESS AND

EFFICIENCY AT REASONABLE PRICES.

RUBIO'S BAJA GRILL, THE "HOME OF THE FISH TACO," IS A LEADER IN THE

RESTAURANT INDUSTRY AND IS RENOWNED FOR ITS INNOVATIVE AND DYNAMIC

APPROACH IN PROVIDING AUTHENTIC MEXICAN FOOD.

RUBIO'S KEY OBJECTIVES

1. ATTRACT, TRAIN, DEVELOP, MOTIVATE AND RETAIN THE HIGHEST

QUALITY MANAGEMENT AND FRANCHISEE TEAM POSSIBLE.

2. BECOME THE RECOGNIZED LEADER IN GUEST SATISFACTION AND VALUE

BY SUPERIOR H.Q.S.C. EXECUTION.

3. EXPAND RUBIO'S MARKET PRESENCE - CREATE AND SUCCESSFULLY

IMPLEMENT A STRATEGIC DEVELOPMENT PLAN.

4. DEVELOP AND ENHANCE THE "RUBIO'S CULTURE" AND OUR SHARED

VALUES.

5. DEVELOP, COMMUNICATE AND EXCEED FINANCIAL OBJECTIVES.

RUBIO'S SHARED VALUES

O FAMILY

O GUEST FOCUS

O EMPLOYEE COMMITMENT

O INTEGRITY/TRUST

O TEAMWORK

O ACCOUNTABILITY

O GROWTH

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2. AWARD OF FRANCHISE

2.1. AWARD. We're pleased to award you a Franchise to operate a

single Rubio's Store at the Premises, and to use the Marks and the System in the

operation of your Rubio's Store. You may not operate a Rubio's Store at any

location other than the Premises and you may not relocate your Rubio's Store

without our prior written consent, which we may withhold in the exercise of our

reasonable business judgment and which will be conditioned on execution of a

General Release by you and all guarantors of your obligations to us. If you

request our consent to a relocation of your Rubio's Store, you must pay us a

reasonable fee to reimburse us for all expenses incurred in connection with your

relocation request.

You agree that you will at all times faithfully, honestly and

diligently perform your obligations under this Agreement, and that you will

continuously exert your best efforts to promote, enhance and maximize the

business of your Rubio's Store and the goodwill of the Marks. You understand and

agree that critical to the System and this Agreement, as well as your possible

success, is full adherence by you to each element of the System. Accordingly,

you will continuously comply with the following (and all other) elements of the

System: (A) you'll use and sell only Products and Services, and only deal with

Suppliers, approved by us; (B) you'll use only prescribed building and equipment

layouts and designs; (C) you'll strictly adhere to our then-current standards of

quality, service and cleanliness; (D) you'll maintain a close and personal

working relationship with your Rubio's Store; and (E) you agree to be personally

accountable for the performance of your obligations under this and all other

agreements pertaining to your Rubio's Store.

You agree that it would be inappropriate for us to enter into this

Agreement if there might be a possibility of your asserting claims against us

and/or Rubio's Affiliates based on our prior relationship. Accordingly, you

agree that you and all guarantors of your obligations to us will,

contemporaneously with the execution of this Agreement, execute a General

Release.

2.2. NO EXCLUSIVITY. The Franchise is a site/address specific (or

"spot") franchise only, with you having no other rights. Except for those rights

expressly awarded to you under an Area Development Agreement, you do not have,

have not paid for, and have no expectation of receiving any benefits of, any

"exclusive territory" or any "exclusive," "protected" or "reserved" territorial,

similar or other rights, no such rights are awarded or will be inferred, and

there will be no limitation of any type on our rights, or of anyone we

designate, to locate and/or consent to the location of other Rubio's Stores, or

other distribution facilities and/or channels of distribution of any type,

whether or not using the System, the Marks and/or Trade Dress at any location,

regardless of the distance from, impact on, or vicinity of, your Rubio's Store

or the number of Rubio's Stores, other outlets or otherwise in any area or

market.

We retain, without limitation of any kind or nature, all rights with

respect to Rubio's Stores, the System, the Marks and Trade Dress, the sale of

Products and any other products and services under any name, mark, trade dress

or otherwise, anywhere in the world, including in proximity to your Rubio's

Store. The rights we retain include: (A) the right to operate and/or license

others to operate Rubio's Stores at any location other than the Premises during

the term of this Agreement and at any location, including the Premises, after

this Agreement terminates or expires; (B) the right to operate and/or license

others to operate any other business at any location during and after the term

of this Agreement; and (C) the right to merchandise and distribute goods and

services identified by the Marks at any location through any other method or

channel of distribution.

2.3. FORMS OF AGREEMENT. You acknowledge that, over time, we have

entered, and will continue to enter, into agreements with other

franchisees/licensee that may contain provisions, conditions and obligations

that differ from those contained in this Agreement. The existence of different

forms of agreement and the fact that we and other franchisees/licensees may have

different rights and obligations does not affect the duties of the parties to

this Agreement to comply with the terms of this Agreement.

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3. TERM

3.1. INITIAL TERM. The Initial Term of this Agreement and the

Franchise granted by this Agreement begins on the date of this Agreement and

terminates at midnight on the day preceding the 10th anniversary of the date

your Rubio's Store first opened for business, unless this Agreement is

terminated at an earlier date pursuant to Section 16. Notwithstanding the

foregoing, if this Agreement is awarded in connection with your acquisition of

an existing franchised Rubio's Store, the Initial Term will expire on the date

that the initial term of the prior franchise agreement would have expired. We

shall complete and forward to you a notice, in the form of attached Rider A, to

memorialize the date the your Rubio's Store first opened for business.

If, during the term of this Agreement, you, through no act or failure

to act on your part (except the failure to extend the lease for the Premises

through the Initial Term of this Agreement), lose the right to possession of the

Premises, the Initial Term shall expire as of the date of the loss of the right

to possession. However, if the right to possession is lost through no act or

failure to act on your part, you may relocate the Rubio's Store (without paying

any additional new store opening fee or transfer fee) at your expense and the

Initial Term shall not expire if: (A) we consent to the new location in writing;

(B) you construct and equip a Rubio's Store at the new location in accordance

with the then-current System standards and specifications; (C) a Rubio's Store

at the new location is open to the public for business within 6 months after the

loss of possession of the Premises; and (D) you reimburse us for all reasonable

expenses actually incurred by us in connection with the approval of the new

location.

3.2. RENEWAL TERMS. At the expiration of the Initial Term, you

shall have an option to remain a franchisee for a First Renewal Term of 10 years

and, at the expiration of the First Renewal Term, a Second Renewal Term of, at

your option, 5 or 10 years, unless this Agreement or a successor franchise

agreement is terminated prior to its expiration. The conditions for renewal at

the expiration of the Initial Term are set forth in this Section 3.2. Except as

provided in Section 3.3., the conditions for renewal at the expiration of the

First Renewal Term shall be set forth in the franchise agreement in effect at

that time.

A. If you desire to extend the Franchise for the First

Renewal Term, you must provide us written notice of your intent to do so at

least 180 days, but not more than 270 days, before the Initial Term expires. (If

you fail to timely provide us this notice, you will be deemed to have waived

your option to extend the Franchise.)

B. If you desire to extend the Franchise for the First

Renewal Term, you must comply with all of the following conditions prior to and

at the end of the Initial Term:

(1) You shall not be in default under this

Agreement or any other agreements between you and us or any Rubio's Affiliate;

you shall not be in default beyond the applicable cure period under any real

estate lease, equipment lease or financing instrument relating to your Rubio's

Store; you shall not be in default beyond the applicable cure period with any

vendor or supplier to your Rubio's Store; and, for the 12 months before the date

of your notice and the 12 months before the expiration of the Initial Term, you

shall not have been in default beyond the applicable cure period under this

Agreement or any other agreements between you and us or any Rubio's Affiliate.

(2) You shall make the capital expenditures

required to renovate and modernize your Rubio's Store to conform to the interior

and exterior designs, decor, color schemes, furnishings and equipment and

presentation of the Marks consistent with the image of the System for new

Rubio's Stores at the time you provides us the renewal notice, including such

structural changes, remodeling, redecoration and modifications to existing

improvements as may be necessary to do so.

(3) You and your employees at your Rubio's Store

shall be in compliance with our then-current training requirements.

(4) You shall have the right to remain in

possession of the Premises, or another location approved in writing by us, for

the First Renewal Term and all monetary obligations owed to your landlord, if

any, must be current.

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(5) You and all guarantors of your obligations

to us shall have executed a General Release.

(6) As determined by us, in the exercise of our

reasonable business judgment, you have operated your Rubio's Store in accordance

with this Agreement and the System.

C. Within 4 months after our receipt of the written

notice of your desire to extend the Franchise for the First Renewal Term, we

will advise you whether or not you may extend the Franchise for the First

Renewal Term. If we are willing to let you extend the Franchise, the notice from

us will contain preliminary information regarding actions you must take to

satisfy Sections 3.2.B.(2) and (3). If not, the notice from us will specify the

reasons for non-renewal. If we do not to permit you to extend the Franchise for

the First Renewal Term, we shall have the right to unilaterally extend the

Initial Term of this Agreement as necessary to comply with any applicable laws.

D. If the Franchise is extended for the First Renewal

Term, we shall forward you a new franchise agreement for the First Renewal Term

for your signature at least 2 months prior to the expiration of the Initial

Term. The form of successor franchise agreement shall be the form then in

general use by us for Rubio's Stores (or, if we are not then granting franchises

for Rubio's Stores, that form of agreement as specified by us) and likely will

differ from this Agreement, including, but not limited to, provisions relating

to the royalty fee and Marketing Fund Contributions.

E. You shall execute the successor franchise agreement

for the First Renewal Term and return the signed agreement to us at least one

month prior to the expiration of the Initial Term. Your failure to sign the

successor franchise agreement and return it to us within this time shall be

deemed an election by you not to extend the Franchise and shall result in

termination of this Agreement and the Franchise granted by this Agreement at the

expiration of the Initial Term. Provided you have timely complied with all of

the conditions set forth in this Section 3.2., we shall execute the successor

franchise agreement and promptly return a fully-executed copy to you.

3.3. CONDITIONS TO THE SECOND RENEWAL TERM. In addition to the

conditions on renewal that will be contained in the franchise agreement in

effect for the First Renewal Term, the following conditions must be satisfied

before the Second Renewal Term may begin: (A) you shall pay us a renewal fee in

an amount equal to the greater of 50% of the New Store Opening Fee paid by you

in connection with this Agreement or 50% of the new store opening fee we are

charging to new franchisees at the expiration of the First Renewal Term (if the

Second Renewal Term will be for 10 years), or the greater of 25% of the New

Store Opening Fee paid by you in connection with this Agreement or 25% of the

new store opening fee we are charging to new franchisees at the expiration of

the First Renewal Term (if the Second Renewal Term will be for 5 years); and (B)

if, in the exercise of our reasonable business judgment, we determine that the

Premises no longer satisfies our criteria for a site for a Rubio's Store, we may

require that you relocate your Rubio's Store to another location that satisfies

our criteria, to which we have consented in writing, in the general trade area

where the Premises are located.

4. DEVELOPMENT AND OPENING OF YOUR RUBIO'S STORE

4.1. SITE CLEARANCE.

A. If the site for your Rubio's Store has not been

identified and purchased (or leased) by you and consented to by us by the time

you and we sign this Agreement, you must purchase or lease (and obtain

possession of) a site suitable for the operation of your Rubio's Store and

obtain our written consent to the site within 60 days after the date of this

Agreement. You won't make any commitments with respect to any location, or

operate a Rubio's Store and/or use any of the Marks from or at any location,

until and unless we've consented to the location. If you are unable to purchase

or lease an acceptable site within such period, we may (but have no obligation

to), at any time thereafter, terminate our obligations and your rights under

this Agreement, provided we refund to you the lesser of: (A) 50% of the New

Store Opening Fee paid to us pursuant to this Agreement; or (B) the New Store

Opening Fee less all expenses (including legal fees, commissions, training

costs, etc.) incurred in connection with such franchising and termination; and

you will concurrently execute documents acceptable to us, providing for:

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(1) continuation of your indemnification, confidentiality and noncompetition

obligations and the dispute resolution provisions of this Agreement, including

those of Sections 15, 19.5. and 21 and (2) a General Release.

B. For each proposed site for your Rubio's Store, you

shall, if requested by us, submit a complete real estate package (containing

that information as we may reasonably require) for a proposed site which you

reasonably believe conforms to site selection criteria we establish from time to

time for demographic characteristics, traffic patterns, parking, character of

the neighborhood, competition from other businesses in the area, the proximity

to other businesses (including other Rubio's Stores), the nature of other

businesses in proximity to the site and other commercial characteristics

(including the purchase price, rental obligations and other lease terms for the

proposed site) and the size, appearance, other physical characteristics, and a

site plan of the premises.

You acknowledge and agree that, in order to enhance the reputation and

goodwill of all Rubio's Stores and the goodwill of the Marks, your Rubio's Store

must be properly developed, operated and maintained. Accordingly, you agree that

we may refuse to consent to a site for your Rubio's Store unless you demonstrate

sufficient financial capabilities, in our sole judgment, applying standards

consistent with criteria we use to establish franchised Rubio's Stores in other

comparable market areas, to properly develop, operate and maintain the proposed

Rubio's Store. To this end, you shall furnish us with such financial statements

and other information regarding you and the development and operation of the

proposed Rubio's Store, including, without limitation, investment and financing

plans for the proposed Rubio's Store, as we reasonably may require.

C. Within 30 days after our receipt of the information

described in Section 4.1.B., we shall advise you in writing whether we have

consented to a particular site. If we do not respond to a completed real estate

package within 30 days, we shall be deemed to have not consented to that site.

Our consent may be subject to reasonable conditions as determined by us in the

exercise of our reasonable business judgment. You may not begin construction of

a Rubio's Store at a particular site until we have consented to the site in

writing. Our consent to one or more sites is not a representation or a promise

by us that a Rubio's Store at such a site will achieve a certain sales volume or

a certain level of profitability. Similarly, our consent to one or more sites

and our refusal to consent to other sites is not a representation or a promise

that a site to which we have consented will have a higher sales volume or be

more profitable than a site to which we did not consent. We assume no liability

or responsibility for: (1) evaluation of a site's soil for hazardous substances;

(2) inspection of any structure on a site for asbestos or other toxic or

hazardous materials; (3) compliance with the Americans With Disabilities Act

("ADA"); or (4) compliance with any other applicable law. It is your sole

responsibility to obtain satisfactory evidence and/or assurances that a site

(and any structures thereon) is free from environmental contamination and in

compliance with the requirements of the ADA.

4.2. LEASE OF PREMISES. If you propose to lease or sublease the

Premises, you shall provide us with a copy of the fully-executed lease or

sublease (for a term, including renewal terms, for at least the Initial Term of

this Agreement) for the Premises within 5 days after the later of execution of

this Agreement or written consent to the Premises by us. The lease or sublease

shall not contain any covenants or other obligations that would prevent you from

performing your obligations under this Agreement. Unless waived by us in

writing, any lease or sublease for the Premises shall contain provisions that

satisfy the following requirements during the entire term of the lease,

including any renewal terms:

A. The landlord consents to your use of the proprietary

signs, distinctive exterior and interior designs and layouts, and the Marks

prescribed by us, and upon expiration or the earlier termination of the lease,

consents to permit you, at your expense, to remove all such items and other

trade fixtures, so long as you make repairs to the building caused by such

removal.

B. The landlord agrees to provide us (at the same time

sent to you) a copy of all amendments and assignments and notices of default

pertaining to the lease and the leased premises.

C. We shall have the right to enter the leased premises

to make any modifications or alterations necessary to protect the System and the

Marks and to cure, within the time periods provided by the lease, any default

under the lease, all without being guilty of trespass or other tort, and to

charge you for these costs.

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D. The landlord agrees that you shall be solely

responsible for all obligations, debts and payments under the lease.

E. The landlord agrees that, following the termination

or earlier expiration of this Agreement, you shall have the right to make those

alterations and modifications to the Premises as may be necessary to clearly

distinguish to the public the Premises from a Rubio's Store and also make those

specific additional changes as we reasonably may request for that purpose. The

landlord also agrees that, if you fail to promptly make these alterations and

modifications, we shall have the right to do so without being guilty of trespass

or other tort so long as we make repairs to the building caused by such removal.

F. The landlord agrees not to amend or otherwise modify

the lease in any manner that would affect any of the foregoing requirements

without our prior written consent, which consent shall not be unreasonably

withheld.

G. The landlord consents to your assignment of the lease

to us or our designee without payment of any assignment fee or similar charge or

increase in any rentals payable to the landlord.

If these provisions are not in your lease or sublease, we may, at our

option, either require that you immediately cause such provisions to be added or

terminate this Agreement following written notice to you.

4.3. FRANCHISEE'S RESPONSIBILITY. You assume all cost, liability

and expense for developing, constructing and equipping your Rubio's Store in

accordance with the requirements of this Agreement and the System. It also shall

be your responsibility to have prepared all required construction plans and

specifications to suit the shape and dimensions of the Premises and you must

ensure that these plans and specifications comply with applicable ordinances,

building codes and permit requirements and with lease requirements and

restrictions. You shall use only registered architects, registered engineers,

and professional and licensed contractors. We do not warrant or guarantee to you

in any way that any contractor (even one referred to you by us) is suitable,

competent, reliable or otherwise able to perform adequately the tasks for which

they are hired and you're the only person/entity with any responsibility for the

work of any contractor selected and/or employed by you. We're unable to provide

any assurance as to costs of construction or otherwise, or as to when you may be

open for business, since such matters are not within our control.

4.4. RUBIO'S STORE DESIGN STANDARDS. We'll furnish you with (and

may update from time to time) standards, specifications and other requirements

for design, decoration, layout, equipment, furniture, fixtures, signs and other

items for Rubio's Stores ("Rubio's Store Design Standards"), with which you'll

promptly comply. You agree that the Rubio's Store Design Standards are an

integral part of the System and that your Rubio's Store will be developed,

constructed, designed and operated in full compliance with the latest Rubio's

Store Design Standards at all times.

4.5. DEVELOPMENT SCHEDULE FOR YOUR RUBIO'S STORE. Within 180 days

after the last to occur of the date of this Agreement or the date we consent in

writing to a site, you must: (A) secure all financing required to fully develop

your Rubio's Store; (B) submit to us for consent any proposed modifications to

the Rubio's Store Design Standards to comply with applicable ordinances,

building codes, permit requirements, lease requirements and restrictions (any

modifications will be at your expense); (C) obtain all required zoning changes,

building, utility, sign, health, sanitation and business permits and licenses

and any other required permits and licenses; (D) construct all required

improvements in compliance with construction plans and specifications supplied

or consented to by us; (E) decorate your Rubio's Store in compliance with plans

and specifications consented to by us; (F) purchase and install all required

equipment, furniture, fixtures and signs (including the Designated Equipment and

computer hardware and software); (G) purchase an opening inventory of the

Products designated by us; (H) obtain all customary contractors' sworn

statements and partial and final waivers of lien for construction, remodeling,

decorating and installation services; and (I) open your Rubio's Store for

business to the general public.

Within such periods you'll also select and employ a licensed contractor

reasonably consented to by us and

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you'll commence construction and/or development as soon as possible and will

expeditiously attend to its completion, purchase and pay for all supplies;

purchase, pay for and attend to the installation of all fixtures and equipment,

train all employees, obtain all required insurance, permits and licenses and do

everything necessary for your Rubio's Store to open for business.

4.6. EQUIPMENT, FURNITURE, FIXTURES AND SIGNS. You'll use in the

development and operation of your Rubio's Store only those (and use each of

those) brands, types and/or models of equipment, furniture, fixtures and signs

as are consented to by us. You'll purchase or otherwise obtain approved brands,

types and/or models of equipment, fixtures and signs only from suppliers

designated by us, which may include and/or be limited to ourselves and/or our

affiliates.

4.7. RUBIO'S STORE OPENING. You won't open your Rubio's Store for

business until: (A) we notify you that all of your pre-opening obligations have

been fulfilled; (B) pre-opening training of all of your personnel has been

completed; (C) all amounts then due us have been paid; and (D) we've been

furnished with copies of all insurance policies (or such other evidence of

insurance coverage and payment of premiums as we request), leases/subleases and

other documents as required by this Agreement. You'll comply with these

conditions and be prepared to open your Rubio's Store for business within the

periods of time specified by this Agreement and, in any case, you'll open your

Rubio's Store for business and commence business pursuant to this Agreement

within 5 days after we give notice to you stating that your Rubio's Store is

ready for opening.

4.8. GRAND OPENING PROGRAM. You'll conduct a grand opening

advertising and promotional program, meeting our specifications, for your

Rubio's Store and will, within 28 days after its opening, spend no less than

$3,500 on such advertising and promotion during that time. Such advertising and

promotional program will only utilize marketing, advertising and public

relations programs, formats, media and materials consented to by us. We'll

furnish advice and guidance to you with respect to your grand opening

advertising and promotional program. The monies you spend for grand opening

advertising are in addition to the monies you are required to spend for local

store marketing pursuant to Section 6.2.

5. FEES

5.1. NEW STORE OPENING FEE. You'll pay us, on signing this

Agreement, a New Store Opening Fee of $25,000. The New Store Opening Fee is

fully earned by us on signing of this Agreement and is entirely nonrefundable

(as are all amounts paid to us and/or any Rubio's Affiliate) except for possible

partial or other refund as expressly provided in other provisions of this

Agreement.

5.2. ROYALTY FEE. In addition to all other amounts to be paid by

you to us, on a twice monthly basis, you'll pay us a nonrefundable and

continuing royalty fee in an amount equal to 4% of the "Gross Volume" (as

defined in Section 5.3.) of your Rubio's Store, for the right to use the System

and the Marks at your Rubio's Store. We may, at any time after the 3rd

anniversary of the date of this Agreement, increase the royalty fee to as much

as 5% of Gross Volume for the remainder of the Initial Term if the form of

franchise agreement then generally being offered to new Rubio's franchisees at

the time of the proposed increase provides for a royalty fee greater than 4% of

Gross Volume.

You must participate in our then-current electronic funds transfer

program authorizing us to utilize a pre-authorized bank draft system on a twice

monthly basis (or otherwise as we specify from time to time in the exercise of

our reasonable business judgment). All royalty fees, Marketing Fund

Contributions and other amounts due us for each period must be received by us or

credited to our account by pre-authorized bank debit before 5:00 p.m. on the day

after the end of each period (I.E., on the 16th for the period from the 1st

through the 15th and on the 1st day of the following month for the period from

the 16th through the end of the month), or at a later point in time specified by

us from time to time. If you fail to timely make any payments or provide us with

any reports, or fail to fully cooperate with any audit, we may thereafter

specify periodic amounts for regular transfer to our (or a Rubio's Affiliate)

account, based on past reports of sales by you and/or reasonable expectations of

royalty fees, Marketing

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Fund Contributions and other amounts to become due from you and, in any event,

covering royalty fees and Marketing Fund Contributions. You will, of course,

fully participate in our then-current electronic reporting system covering sales

and other items.

5.3. DEFINITION OF "GROSS VOLUME." Gross Volume includes all

revenues (except sales tax collected and paid when due to the appropriate taxing

authority and actual customer refunds, adjustments and credits) which are, or

could be, received by you: (A) by or with respect to your Rubio's Store; (B)

which relate to the type of products, services or any other items which are or

could be provided, sold, rented or otherwise distributed at, through or in

association with a Rubio's Store; and/or (C) with respect to any products and

services which are, or could be, provided, sold, or otherwise distributed in

association with any use of the Marks or the System. You'll not divert any

business or take any other actions (or fail to take any actions) which would

have the effect of reducing the Gross Volume with respect to which royalty fees

are payable and you will use your best efforts to maximize Gross Volume. All

sales and/or billings, whether collected or not, will be included in Gross

Volume, with no deduction for credit card or other charges.

5.4. INTEREST. All amounts you may owe us and/or any Rubio's

Affiliate will bear interest at the highest applicable legal rate for open

account business credit, but not to exceed 1.5% per month. This doesn't

constitute our agreement to accept payments after they're due or any commitment

to extend credit to, or otherwise finance your operation of, your Rubio's Store.

If you fail to pay any amounts (including any electronic draft returns, returns

for insufficient funds or otherwise), or fail to deliver any report when due,

that failure can constitute grounds for termination of this Agreement, in spite

of the provisions of this Section. Notwithstanding any provision in this

Agreement to the contrary, in no event will any amounts be charged as late fees

or otherwise which exceed or violate any applicable legal restrictions.

5.5. APPLICATION OF PAYMENTS. Notwithstanding any designation by

you, we can apply any payments received from you, whether designated as payable

to us, the Marketing Fund or otherwise, to any past due or other indebtedness of

yours for royalty fees, Marketing Fund Contributions, purchases, interest or

otherwise as we choose in the exercise of our reasonable business judgment. We

can set off, from any amounts that may be owed to you, any amount that you owe

to us. We can retain any amounts we have received for your account (whether

rebates or other funds and whether paid by or due from suppliers or otherwise),

as a credit and payment against any amounts that you owe or will owe to us or

with respect to any Marketing Fund Contribution, without notice and at any time.

We have the right to accept payment from any other person or entity as payment

by you. Our acceptance of that payment will not result in that other person or

entity being substituted for the named Franchisee.

6. MARKETING

6.1. MARKETING FUND.

YOUR CONTRIBUTIONS. We've instituted an advertising, publicity and

marketing fund ("Marketing Fund") for such advertising, advertising-related,

marketing and/or public relations programs, services and/or materials as we, in

the exercise of our reasonable business judgment, may deem necessary or

appropriate to promote Rubio's Stores. You'll contribute to the Marketing Fund

3% of Gross Volume; provided that we can, at any time, whether on a temporary,

permanent, regional, national or any other basis, require you to pay a Marketing

Fund Contribution of up to and including 5% of Gross Volume, but we will not

increase your required contribution by more than one percentage point in any

12-month period (E.G. an increase from a 3% level to a 4% level of Gross Volume

in any 12-month period would be allowed) and we will provide you with at least

90 days' prior notice of any such increase. Your Marketing Fund Contributions

will be calculated and payable at the same time and in the same manner as

royalty fees.

For management purposes, the Marketing Fund is divided into two

subfunds: the "Production Fund" and the "Media Fund."

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PRODUCTION FUND. With respect to your Marketing Fund Contributions, no

more than 1.5% of your Gross Volume will be paid into the Production Fund. (On a

temporary, regional or any other basis, we can specify that less, but not more,

than that amount will be paid into, and disbursed under, the Production Fund for

any period.)

The Production Fund may be used to pay the costs of preparing,

producing, distributing and using marketing, advertising and other materials,

items and/or programs, including production of commercials, advertisements and

other promotional and advertising materials, programs and/or items; development

of creative concepts and related content; administering national, regional

and/or local marketing programs, including, without limitation, employing

advertising, public relations and other agencies and firms (such as consultants,

lawyers and accountants, among others); supporting public relations, market

and/or product research and related activities (including tests and surveys);

providing advertising and marketing materials for use by Rubio's Stores; new

product development, menu boards and other signage; and/or other purposes deemed

beneficial for the general recognition of the Marks and/or the benefit of

Rubio's operators generally, as well as any expenses associated with any

Franchisee Advisory Council(s), if those Councils, and such expenses, are

approved by us in the exercise of our reasonable business judgment. The

Production Fund will, as available, furnish you with marketing, advertising and

promotional formats and sample materials and may charge the direct cost of

producing items supplied to you, plus shipping, handling and other related

costs. In the exercise of our reasonable business judgment, we can reallocate

amounts paid into the Production Fund to the Media Fund and spend those amounts

for purposes authorized under the Media Fund.

MEDIA FUND. With respect to your Marketing Fund Contributions, any

amounts not contributed to the Production Fund will be allocated to the Media

Fund and spent on either: (A) national advertising media, "image advertising"

(which may include advertising, public relations and/or otherwise) and/or other

advertising media that the advertising industry generally regards as "national

media" and/or its functional equivalent; and/or (B) local and/or regional

advertising media, including media placement and/or other advertising-related

programs/materials (and/or public relations programs/materials) reaching the

Designated Market Area ("DMA") in which your Rubio's Store is located ("local

media expenditures.") Such local media expenditures may be made directly by us,

through a local cooperative or other association which we have approved, and/or

directly by return to, and expenditure by, you, in each case under such

procedures and conditions as we designate from time to time. In each case, all

advertising and/or other marketing efforts are subject to our prior written

approval, in the exercise of our reasonable business judgment.

GENERAL ADMINISTRATIVE PROVISIONS. Subject to the above express

limitations, we'll have sole discretion over all matters relating to the

Marketing Fund in any way, including (but not limited to) its management, all

financial matters, expenditures, receipts and/or investments by the Marketing

Fund, timing of expenditures, media placement and allocation thereof or

otherwise.

You'll participate in all marketing programs instituted by the

Marketing Fund or us but will retain full freedom to set your own prices, except

that we may, to the greatest degree permitted by applicable law, specify maximum

prices above which you will not sell or otherwise provide any goods or services

and you will comply with all such maximum prices. We may, in the exercise of our

reasonable business judgment, use the Marketing Fund to pay the costs of

advertising, advertising-related, marketing and/or public relations programs,

services and/or materials with respect to locations, programs or concepts where

products and/or services offered under the Marks are to be offered in

conjunction with products and/or services offered under other marks, including

(but not limited to) any co-branding, dual franchising or other programs, and

any other franchised or non-franchised alternative channel of distribution,

whether controlled by us or not.

The Marketing Fund will be accounted for separately from our other

funds (but may be commingled with our other funds) and will not be used to

defray any of our general operating expenses, except for such salaries,

administrative costs, overhead and other expenses as we may reasonably incur in

activities related to the Marketing Fund and/or its programs (including, without

limitation, conducting market research, preparing advertising and marketing

materials, insurance, legal costs and collecting and accounting for the

Marketing Fund, which will be paid out of the Production Fund). In any event, we

may charge the Marketing Fund for attorneys' fees and other costs related in any

way to our defense of any claims against us and/or any Rubio's Affiliate

regarding the Marketing Fund

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and/or with respect to collecting amounts due and/or expenditures by or from the

Marketing Fund. We may, in the exercise of our reasonable business judgment,

spend in any fiscal year an amount greater or less than the aggregate

contributions to the Marketing Fund (and/or any sub-fund) in that year and the

Marketing Fund (and/or any sub-fund) may borrow from us or other lenders to

cover deficits or to invest any surplus for future use.

You authorize us to collect for remittance to the Marketing Fund (and

allocation/disbursement as we deem appropriate in the exercise of our reasonable

business judgment) any advertising or promotional monies or credits offered by

any supplier based upon purchases by you or otherwise. A statement of monies

collected and costs incurred by the Marketing Fund will be prepared annually by

us and be furnished to you upon written request. We'll have the right to cause

the Marketing Fund (and/or any sub-funds) to be incorporated or operated through

an entity separate from us as we deem appropriate, and such successor entity

will have all rights and duties of ours relating to the Marketing Fund. The

Marketing Fund may be combined with any marketing fund otherwise established for

Rubio's Stores and the funds merged for use in accordance with this Agreement.

(A brief statement regarding the availability of information on the purchase of

Rubio's franchises may be included in advertising and other items produced

and/or distributed using the Marketing Fund.)

We can, in the exercise of our reasonable business judgment, arrange

for services, goods and otherwise to be provided to the Marketing Fund by

ourselves, any Rubio's Affiliate and our and/or their employees or agents,

including persons/entities who may be owned, operated, controlled by, and/or

affiliated with, us (such as an "in-house advertising agency") or which may be

independent. We may use the Marketing Fund to compensate and reimburse any such

persons/entities (including ourselves) as we deem appropriate in the exercise of

our reasonable business judgment (including payment of commissions) and to

compensate ourselves and/or others for administrative and other services,

materials, etc. rendered to the Marketing Fund, provided that any compensation

to us or any persons/entities owned, controlled and/or operated by us will not

be unreasonable in amount.

We'll cause all Rubio's Stores owned by us to contribute to the

Marketing Fund on the same basis as comparable franchisees. You understand that,

due to differing forms of franchise agreements or otherwise, some Rubio's

franchisees/licensees may have different Marketing Fund and/or other obligations

than in this Agreement. The Marketing Fund Contribution any franchisee/licensee

is required to pay may be decreased by us on a market-by-market, general,

temporary, permanent or other basis as we believe necessary or desirable.

We may (but are not required to) remit a portion of Marketing Fund

contributions back to a franchisee (or cooperative) on such terms and conditions

as we determine in the exercise of our reasonable business judgment, including

(but not limited to) reimbursement of local advertising expenditures made by a

franchisee and we may waive and/or compromise claims for contributions to,

and/or claims against or with respect to, the Marketing Fund in the exercise of

our reasonable business judgment, using the Marketing Fund to pay any such

claims and related legal and other costs. We'll have sole discretion as to

whether or not we take legal or other action against any franchisee who is in

default of his or her obligations with respect to the Marketing Fund (including

obligations to make contributions) or otherwise and whether a franchisee may be

allowed to make direct advertising expenditures in place of contributions to the

Marketing Fund.

Except as expressly provided above with respect to the use of the Media

Fund for local and/or regional advertising, we will have no obligation to ensure

that expenditures by the Marketing Fund in or affecting any geographic area are

or will be proportionate or equivalent to the contributions to the Marketing

Fund by Rubio's Stores operating in that geographic area or that any Rubio's

Store will benefit directly or in proportion to its contribution to the

Marketing Fund or from the development of advertising and marketing materials

and/or programs, the placement of advertising or otherwise. We have no

obligation to cause other Rubio's Stores, licensees or outlets (some of which

may be under different arrangements) to contribute to the Marketing Fund, any

cooperative or engage in local marketing. You agree that we will not have any

direct or indirect liability or obligation to you, the Marketing Fund or

otherwise with respect to the management, maintenance, direction, administration

or otherwise of the Marketing Fund. You agree that neither we nor any Rubio's

Affiliate will be liable for any act or omission, whether with respect to the

Marketing Fund or otherwise which is consistent with this Agreement or other

information provided to you, or which is done in subjective good faith.

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You and we, each having a mutual interest in, and agreeing on the

critical practical business importance of, your and our relationship being

governed solely by written instruments signed by the parties to be bound (and

not having either of us subject to the uncertainty and ambiguity inherent in the

application of legal or other concepts not expressly agreed to in writing by you

and us), agree that your and our rights and obligations with respect to the

Marketing Fund and all related matters are governed solely by the express terms

of this Agreement and that this Agreement (and all rights and obligations with

respect to the Marketing Fund) is not in the nature of a "trust," "fiduciary

relationship" or similar special arrangement (neither you nor we intending to

create such relationships and expressly disavowing any such or similar

relationships) and is only an ordinary commercial relationship between

independent businesspersons for their independent economic benefit. We may

maintain Marketing Fund assets in one or more accounts designated as "trust

accounts" (or similarly designated), for purposes of protecting such assets from

claims of third-party creditors or otherwise, but such designation and/or

treatment will not operate to create any "trust," "fiduciary relationship" or

similar special arrangement as to the Marketing Fund, its assets or otherwise.

While we're not required to do so, if we submit any matters with regard to the

Marketing Fund or otherwise for approval to any Franchisee Advisory Council and

approval is granted by a majority of that council, the approval will be binding

on you.

6.2. LOCAL STORE MARKETING. Prior to their use by you, samples of

all advertising and promotional materials and programs (including any use of the

Internet, World Wide Web or other electronic media) not prepared or previously

approved by us must be submitted to us, in the form and manner prescribed by us

from time to time, for our review and consent, which we may withhold or

condition as we see fit in the exercise of our reasonable business judgment. If

written disapproval is not received by you within 15 days from the date of

receipt by us of such materials, we will be deemed to have given the required

consent, but we can later retract any consent (whether express or as a result of

such failure to respond) by notice to you. Our review of and consent to your

local store marketing materials is not a representation or a promise that those

materials (utilized in the media you propose) will have a positive effect on the

sales at your Rubio's Store. Our consent only indicates that the materials

properly use the Marks in a manner consistent with our overall marketing plan.

You won't use any advertising or promotional materials or programs that

we have disapproved or that do not include the copyright, trademark and other

notices required by us. In no event shall your advertising contain any statement

or material which, in the exercise of our reasonable business judgment, may be

considered: (A) in bad taste or offensive to the public or to any group of

persons; (B) defamatory of any person or an attack on any competitor; (C) to

infringe upon the use, without permission, of any other persons' trade name,

trademark, service mark or identification; or (D) inconsistent with our public

image or the public image of the System. We can require that a brief statement

regarding the purchase of Rubio's franchises may be included in all advertising

used by you and that a brochure regarding purchase of Rubio's franchises be

placed in a prominent location in your Rubio's Store.

7. STORE RECORDS AND REPORTING

7.1. BOOKKEEPING AND ACCOUNTING. You'll establish and maintain at

your own expense a bookkeeping, accounting, recordkeeping and records retention

system conforming to requirements prescribed by us from time to time (including,

without limitation, requirements for timely entering of information into

databases of a computer program designated by us and periodic printouts of

reports generated by such computer program).

Each transaction related to your Rubio's Store will be processed on a

computer system as prescribed by us. You will use (and only use) the cash

register, computer and other systems (including hardware and software) as

designated by us from time to time in the exercise of our reasonable business

judgment. We may, from time to time in the exercise of our reasonable business

judgment, designate different cash register, computer and other systems for use

in your Rubio's Store and may modify such systems, and/or may require you to

obtain management information and similar services from one or more suppliers

designated by us (which may include us and/or affiliates of ours), each of which

you'll promptly and fully comply with at your sole expense.

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As directed by us, you will participate in our electronic reporting

system covering sales and other items, with direct interconnection to (and full,

on-line access by) our computer hardware and software systems. You will

continuously use, maintain and update electronic cash register, computer and

other systems (including point-of-sale, back-office and other systems) and

software programs which meet such specifications as we designate, from time to

time in the exercise of our reasonable business judgment, and which, in some

cases, may include components only available from us, our affiliates and/or

suppliers designated by us. You will maintain your systems on-line to provide

full access for computer systems used by us and you will promptly update and

otherwise change your electronic cash register, computer hardware and software

systems as we require from time to time in the exercise of our reasonable

business judgment, at your sole expense. We reserve the right to have full

access to such electronic cash register, computer and other systems and the

sales information and data contained therein and to retrieve, analyze, download

and use the software and all data contained therein (as well as any other

information reported to us) at any time. You will promptly and fully pay all

amounts charged by any supplier or licensor of the systems and programs used by

you, including charges for use, maintenance, support and/or update of these

systems or programs.

We may require you to obtain specified computer hardware and/or

software, including, without limitation, a license to use proprietary software

developed by us or others. Modification of specifications for the components of

the cash register, computer and other systems may require you to incur costs to

purchase, lease and/or license new or modified computer hardware and/or software

and to obtain service and support for the cash register, computer and other

systems during the term of this Agreement. We cannot estimate the future costs

of the cash register, computer and other systems (or additions, modifications,

maintenance or support) and your related costs may not be fully amortizable over

the remaining term of this Agreement. You agree to pay all costs in connection

with obtaining, maintaining, upgrading, etc. the computer hardware and software

comprising the cash register, computer and other systems (and additions,

modifications, maintenance or support), including (but not limited to) the

services of any "help desk" or other support function, whether provided by us

and/or anyone else. Within 60 days after you receive notice from us, you will

obtain, install and thereafter use the components of the cash register, computer

and other systems that we designate from time to time. We have the right to

charge a reasonable fee for the license, modification, maintenance or support of

proprietary software that we may license to you and other goods and services

that we or any affiliates furnish to you related to the cash register, computer

and other systems.

7.2. REPORTS. You will provide to us such information regarding the

operation of your Rubio's Store, and in such form and format, as we specify from

time to time, including by faxed or mailed copies of reports or documents,

including through full, direct, on-line access to your cash register, computer

and other systems, or otherwise as we designate.

Our current information requirements (which we may expand or otherwise

change from time to time) are as follows:

A. daily forwarding (by hard copy, electronically or

otherwise as we designate) to us of any information from your cash register

and/or other computer systems;

B. within 24 hours after the end of each week (currently

ending on Sunday) a report of Gross Volume by hard copy, electronically or

otherwise as we designate;

C. within 30 days after the end of each fiscal quarter,

a period and year-to-date profit and loss statement and a balance sheet for your

Rubio's Store, prepared, verified and signed by you;

D. within 45 days after the end of each of your fiscal

years, an unaudited fiscal year-end balance sheet, income statement reflecting

all year-end adjustments and statement of changes in financial position, in each

case for your Rubio's Store, prepared in accordance with generally accepted

accounting principles consistently applied, and verified and signed by you. (We

reserve the right to require you, at your own expense, to have audited annual

financial statements prepared by a certified public accountant on an annual

basis and presented to us with such account's report);

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E. on request by us, such other data, information and

supporting records for such periods as we from time to time require, including

period financial statements, sales tax returns and state and federal income tax

returns. Each report and financial statement submitted by you to us will be

verified as correct and signed by you personally if a sole proprietorship, by a

general partner if a partnership, or by an executive officer if a corporation or

a limited liability company.

You'll maintain and furnish to us, on request, complete copies of: (1)

all records of or relating to your Rubio's Store; and (2) all income, sales and

other tax returns filed by you reflecting activities of your Rubio's Store for

the most recently completed fiscal years, you hereby waiving any privileges with

regard to any records and/or tax returns.

7.3. AUDIT AND INSPECTION. We and/or our designees will have the

right at any time during business hours, and without prior notice to you, to

inspect and/or audit the properties, assets, premises, business records,

bookkeeping and accounting records, sales and income tax records and returns

(you waiving all privileges with respect thereto), cash register tapes,

invoices, payroll records, check stubs and bank deposit receipts, computer files

and other records of, and/or relating in any way to, your Rubio's Store and the

books and records of any person(s), corporation or partnership which holds, or

does business with, the Franchise. You'll fully cooperate with our

representatives and independent accountants/attorneys hired by us to conduct any

such inspection or audit. Our right to audit includes the right to access all

cash registers, computers and other equipment by electronic means.

If any inspection or audit discloses an understatement of Gross Volume,

you will pay to us, within 5 days after receipt of the inspection or audit

report, the royalty fees and Marketing Fund Contributions due on the amount of

such understatement, plus interest (at the rate and on the terms provided

herein) from the date originally due until the date of payment. If any

inspection or audit is made necessary by your failure to furnish reports,

supporting records, other information or financial statements, or to furnish

reports, records, information or financial statements on a timely basis, or if

an understatement of Gross Volume for any period is determined by any audit or

inspection to be greater than 2%, you will reimburse us for the cost of the

inspection or audit, including, without limitation, the charges of any

independent accountants, and the travel expenses, room and board and applicable

per diem charges for our and their employees. Should any audit reveal an

intentional understatement of Gross Volume for any period in any amount, or an

understatement (whether intentional or not) of Gross Volume for any period to be

greater than 5%, or any other violation of this Agreement, we may terminate all

of your rights, and our obligations, hereunder, in addition to exercising any

other remedies we may have. These remedies are in addition to all other remedies

and rights of ours hereunder or under applicable law, including termination.

8. COMPUTER HARDWARE AND SOFTWARE SYSTEMS

8.1. USE AND MAINTENANCE. Since the effective and efficient

operation of a Rubio's Store is closely connected with the use and maintenance

of appropriate computer hardware and software systems as specified by us, with

direct interconnection to (and access by) our computer hardware and software

systems, you must purchase, use, maintain and update computer and other systems

(including point-of-sale, back-office and other systems) and software programs

which meet our specifications as they evolve over time and which, in some cases,

may only be available through us and/or Rubio's Affiliates. You must maintain

your systems on-line to provide full access for computer systems used by us and

you must promptly update and otherwise change your computer hardware and

software systems as we require from time to time, at your expense. You'll pay

all amounts charged by any supplier or licensor (which may be us or a Rubio's

Affiliate) of the systems and programs used by you, including charges for use,

maintenance, support and/or update of these systems or programs.

Neither we nor any supplier designated by us or otherwise will have any

liability and/or obligation (and neither you, nor any Affiliate of yours, will

make any claims) with respect to, any failures, errors or otherwise, of or by

(and/or any loss, damage, liability, expense or otherwise caused by or related

to) any computer systems, software, hardware or otherwise, whether or not

provided and/or specified by us, any Rubio's Affiliate and/or any supplier.

8.2. RUBIO'S RESTAURANT INFORMATION SYSTEM HELP DESK FEE. On

signing this Agreement, and by January 2 of each year during its term, you will

pay us a non-refundable Rubio's Restaurant Information System

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("RRIS") Help Desk Fee, pro-rated for any period of less than 12 months, to

compensate us for access to our RRIS Help Desk. As of the date of this

Agreement, the annual RRIS Help Desk Fee is $1,800. We may adjust this fee on an

annual basis to cover the RRIS Help Desk costs we expect to incur in that year.

This fee entitles you to 24 hour per day/7 days per week support for the RRIS,

which currently includes software for a POS system, Back Office System,

Communications/Polling, and Decision Support tools, but may be changed by us

(including deletion/addition/modification of features, benefits or otherwise) in

the future in the exercise of our reasonable business judgment. Hardware costs

and all software/hardware maintenance fees and costs are in addition to this fee

and will be your sole responsibility. If, in our reasonable judgment, the

support required by you is beyond that appropriate for such fee, we may

terminate all such support (and such fee) and/or increase this fee to a level

reasonably appropriate to the service and benefits to be provided.

9. MODIFICATIONS OF THE SYSTEM

9.1. We shall be entitled from time to time, in the exercise of our

reasonable business judgment, to change or modify the System, including

modifications to the Manuals, the menu and menu formats, the Designated

Equipment, the signage, the building and exterior areas of your Rubio's Store

(including the Trade Dress, decor and color schemes), the presentation of the

Marks, the adoption of new administrative forms and methods of reporting and of

payment of any monies owed to us and the adoption and use of new or modified

Marks or copyrighted materials. You shall accept and use or display in your

Rubio's Store any such changes or modifications in the System as if they were a

part of the System at the time this Agreement was executed, and you will make

such expenditures as the changes or modifications in the System may reasonably

require.

9.2. Within 30 days after receipt of written notice from us, you

shall begin selling any newly authorized menu items and cease selling any menu

items that are no longer authorized. All food, beverage and merchandise items

authorized for sale at your Rubio's Store shall be offered for sale under the

specific name designated by us. If you have a suggestion for a new menu item or

for a change to an authorized menu item or you desire to participate in a test

market program, you must provide us written notice, and obtain our written

consent, prior to implementation. You shall purchase any additional equipment

and smallwares as we deem reasonably necessary in connection with new menu

items. If we require you to begin offering a new menu item which requires the

purchase of additional equipment, a reasonable period of time, as determined in

the exercise of our reasonable business judgment, shall be provided for the

financing, purchase and installation of any such equipment before such new menu

items must be offered for sale at your Rubio's Store.

9.3. Extensive structural changes, major remodeling and renovations

and substantial modifications to existing equipment and improvements to

modernize and conform your Rubio's Store to the image of the System for new

franchised and company restaurants shall be required at our request (but not

more often than every 5 years). Capital expenses necessary for the repair and

maintenance of your Rubio's Store are not subject to the time limitations

described in the preceding sentence. Within 60 days after your receipt of our

written notice regarding the required modernization, you shall prepare and

complete drawings and plans for the required modernization. These drawings and

plans must be submitted to, and their use approved by, us prior to the

commencement of work. You shall complete the required modernization within the

time reasonably specified by us in our written notice.

9.4. We shall have the right, in the exercise of our reasonable

business judgment, to waive, defer or permit variations from the standards of

the System or the applicable agreement to any franchisee or prospective

franchisee based on the peculiarities of a particular site, existing building

configuration or circumstance, density of population, business potential, trade

area population or any other condition or circumstances. We shall have the

right, in the exercise of our reasonable business judgment, to deny any such

request we believe would not be in the best interests of the System.

9.5. If you develop any new concepts, processes or improvements

relating to the System, whether or not pursuant to an test we authorize, you

promptly shall notify us and provide us with all information regarding the new

concept, process or improvement, all of which shall become our property and

which may be incorporated into the System without any payment to you. You, at

your expense, promptly shall take all actions deemed necessary or desirable by

us to vest in us ownership of such concepts, processes or improvements.

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10. TRAINING AND GUIDANCE

10.1. TRAINING. We'll furnish to you (or a managing partner or owner

of yours consented to by us), and the initial Rubio's Store manager appointed by

you in accordance with this Agreement, an initial training program covering the

operation of a Rubio's Store. We'll furnish the initial training program at a

time and place, and for such period, as we designate in the exercise of our

reasonable business judgment (we're currently requiring approximately 25 days of

pre-opening training.) If you've been previously trained or if an Affiliate of

yours is an operator of a Rubio's Store in Good Standing, we may elect to not

provide training or may provide a revised/shortened training program. You (or a

managing partner or owner of yours consented to by us) and/or the initial

Rubio's Store manager appointed by you must each attend and complete such

training program to our satisfaction (in the exercise of our reasonable business

judgment) before beginning operation of your Rubio's Store. Each manager of your

Rubio's Store must have successfully completed all training required by us. We

may charge a reasonable fee for training of subsequent managers. We can require

successful completion of training by all of your supervisory personnel and we'll

furnish such training program at reasonable charges and at such times and places

as we designate.

If Franchisee is a business entity, Franchisee's chief executive

officer, operating partner or similar individual must successfully complete such

portion of the initial training (and any subsequent refresher or other training)

as we designate from time to time. (We currently require a minimum of 5 days

training for such individual.)

If we, in the exercise of our reasonable business judgment, determine

that you (or a managing partner or owner of yours consented to by us) have not

successfully completed (or are not making satisfactory progress in) the initial

training, we may cancel all of your rights (and all of our obligations) under

this Agreement and/or any other agreements with you and return the New Store

Opening Fee (less $12,500 to cover our sales, training and other expenses, among

other things) to you, and you will return all Manuals and you (and each

Affiliate of yours) will execute documentation providing for a General Release,

and we will provide you with a similar release, except that your indemnity,

noncompetition and confidentiality obligations, and the dispute resolution

provisions of this Agreement, including those of Sections 15, 19.5. and 21, will

continue in force and effect. Since the possibility of such termination exists,

you understand that if you make any investments or sign any documents prior to

completion of training, you are at risk. Alternatively, we can (in the exercise

of our reasonable business judgment) require you to hire a substitute manager

and arrange for him/her to complete the training program to our satisfaction.

If, whether as a result of observations, test results or otherwise

during the initial training or thereafter (including during operation of your

Rubio's Store) we determine, in the exercise of our reasonable business

judgment, that it's appropriate, we can require that you (or a managing partner

or owner of yours consented to by us) and/or a manager appointed by you, at your

sole cost, re-attend and successfully complete training.

You (or a managing partner or owner of your consented to by us) and

your supervisory personnel must attend additional and/or refresher training

programs (if we designate them as mandatory) conducted at location(s) specified

by us, including national and regional conferences, conventions and meetings,

and your other employees may be required to attend mandatory training programs

presented by us at your Rubio's Store. You and your managers and employees may

attend any additional training programs offered by us from time to time which we

designate as optional. We may charge a fee for any optional training programs.

You'll be responsible for all travel, living, incidental and other expenses and

compensation of you and your personnel attending any training program.

10.2. ANNUAL IN-PERSON REVIEW. Once each year, at a time designated

by us, you and your director of operations/manager will, at your expense, meet

with our representatives at our headquarters or another location designated by

us for the purpose of discussing and reviewing your Rubio's Store's operations,

status, financial performance and other matters.

10.3. OUR INSPECTIONS. We and/or our agents will have the right, at

any time during business hours, and without prior notice to you, to: (A) inspect

the Premises, the Designated Equipment and other equipment, furniture, fixtures,

signs, operating materials and supplies; (B) observe, photograph and video tape

(or otherwise record) the operations of your Rubio's Store for such periods as

we deem necessary or advisable; (C) remove samples of any

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items for testing and analysis without paying for the samples; (D) interview

personnel of your Rubio's Store; (E) interview customers of your Rubio's Store;

(F) inspect, and/or conduct, supervise or observe a physical count of, the

inventory and assets of your Rubio's Store; and (G) inspect and copy any books,

records, documents or otherwise relating to your Rubio's Store. You'll cooperate

fully with us in connection with such matters. You'll present to your customers

such evaluation forms as are periodically prescribed by us and will participate

and/or request your customers to participate in any surveys performed by or on

behalf of us.

10.4. GUIDANCE AND ASSISTANCE. We'll furnish guidance to you with

respect to: (A) specifications, standards and operating procedures utilized by

Rubio's Stores, including any modifications; (B) purchasing approved equipment,

fixtures, signs, inventory, operating materials and supplies; (C) developing and

implementing local advertising and promotional programs; (D) administrative,

bookkeeping, accounting, inventory control and general operating and management

procedures; and (E) establishing and conducting employee training programs at

your Rubio's Store. This guidance can, in the exercise of our reasonable

business judgment, be furnished in the Manuals, bulletins, written reports and

recommendations, other written materials, refresher training programs and/or

telephonic consultations or consultations at our offices or at your Rubio's

Store. You'll follow and comply with this guidance.

10.5. MANUALS. During the term of the Franchise, we will loan you

(or allow you electronic or other access to) one copy of the Manuals, containing

mandatory and suggested specifications, standards and operating procedures

prescribed from time to time by us for a Rubio's Store and information relative

to your obligations under this Agreement. We can, in the exercise of our

reasonable business judgment, modify any aspect of the Manuals, or

specifications, standards, policies and procedures of Rubio's Stores, to, among

other things, specify brands, types and/or models of equipment which must be

used by you in the operation of your Rubio's Store, to specify changes in the

Products and Services used and/or offered by you, and/or to specify changes in

the decor, format, image, products, services, operations or otherwise of a

Rubio's Store.

You'll promptly and continuously comply, at your sole expense, with all

provisions of, and additions/deletions/changes to, the Manuals. You have no

expectation that the Manuals will not be changed over time and you and we, in

fact, anticipate that such changes will take place, in response to competitive

challenges, commercial opportunities and otherwise. You'll keep your copy of the

Manuals current by immediately inserting all modified pages and (at our option)

destroying or returning to us all superseded material. Any such

additions/deletions/changes will take precedence over all prior communications

and in the event of a dispute, the master Manuals maintained at our office shall

control. The provisions of the Manuals as modified from time to time by us and

communicated to you constitute provisions of this Agreement and are binding upon

you. The Manuals contain proprietary information of ours and you agree to keep

the Manuals and information contained therein confidential at all times during

and after the term of this Agreement.

11. YOUR RUBIO'S STORE -- IMAGE AND OPERATION

Products sold and Services performed under the Marks have a reputation

for quality. This reputation has been developed and maintained by us, and it is

of the utmost importance to you, us and all other of our franchisees/licensees

that this reputation be maintained. In recognition of the mutual benefits that

come from maintaining the reputation for quality enjoyed by the System, you

covenant and agree, with respect to the operation of your Rubio's Store and the

Products and Services provided in connection with your Rubio's Store, that you

and your employees shall comply with all of the requirements of the System as

set forth in the Manuals or otherwise, and you additionally shall comply with

the following:

11.1. UPKEEP OF YOUR RUBIO'S STORE. You shall constantly maintain

and continuously operate your Rubio's Store and all furniture, fixtures,

equipment, furnishings, floor coverings, interior and exterior signage, the

building interior and exterior, interior and exterior lighting, landscaping and

parking lot surfaces in first-class condition and repair in accordance with the

requirements of the System, including all ongoing necessary remodeling,

redecorating, refurbishing and repairs. In addition, you shall promptly and

diligently perform all necessary maintenance, repairs and replacements to your

Rubio's Store as we may prescribe from time to time including

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periodic interior and exterior painting; resurfacing of the parking lot; roof

repairs; and replacement of obsolete or worn out signage, floor coverings,

furnishings, equipment and decor.

You shall not make any material alterations to your Rubio's Store that

affect operations or the image of the System without our prior written approval.

You acknowledge and agree that the requirements of this Section are both

reasonable and necessary to ensure continued public acceptance and patronage of

Rubio's Stores, to assist your Rubio's Store to compete effectively in the

marketplace and to avoid deterioration of your Rubio's Store.

11.2. MAXIMUM OPERATION OF YOUR RUBIO'S STORE. During the term of

this Agreement, you shall use the Premises solely for the operation of your

Rubio's Store and you shall maintain sufficient inventories, adequately staff

each shift with qualified employees and continuously operate your Rubio's Store

at its maximum capacity and efficiency for the minimum number of days and hours

set forth in the Manuals (subject to the requirements of local laws and

licensing requirements). You shall immediately resolve any customer complaints

regarding the quality of food or beverages, service and/or cleanliness of your

Rubio's Store or any similar complaints. When any customer complaints cannot be

immediately resolved, you shall use best efforts to resolve the customer

complaints as soon as practical and shall, whenever feasible, give the customer

the benefit of the doubt.

11.3. DESIGNATED EQUIPMENT, PRODUCTS AND/OR SUPPLIERS. We've already

specified, and plan to specify in the future, various suppliers of Designated

Equipment, Products and/or Services to be used or provided by Rubio's Stores and

that meet our standards and requirements, in each case in the exercise of our

reasonable business judgment. Your Rubio's Store will purchase, use and offer

each of, and only, such types, brands and/or quality of Designated Equipment,

menu items, and other Products and Services as we designate and, where we so

require, use only suppliers as designated by us. Designated suppliers may

include, and may be limited to, us and/or companies affiliated with us. We may

designate a single supplier or limited number of suppliers, may designate a

supplier only as to certain items and may concentrate purchases with one or more

suppliers to obtain lower prices, advertising support and/or other benefits in

the exercise of our reasonable business judgment. Specification of a supplier

may be conditioned on requirements relating to frequency of delivery, standards

of service, including prompt attention to complaints, as well as payments,

contributions or other consideration to us, Rubio's Affiliates, the Marketing

Fund and/or otherwise, or other criteria, and may be temporary, pending a

further evaluation of such supplier by us, in each case in the exercise of our

reasonable business judgment.

In particular, and without limiting the foregoing, all beverages, food

products and paper goods served, and/or used, in or from your Rubio's Store, all

suppliers thereof, and all menu items (including the specific recipes for these

items) must be only those approved by us, in the exercise of our reasonable

business judgment.

You'll notify us in writing (and submit to us such information,

recipes, specifications, and samples as we request) if you propose to purchase,

use or offer any type, brand and/or quality of items that have not been

previously specified by us, or if you propose to use any supplier who has not

been previously specified by us for the proposed item and will arrange for

pre-payment of reasonable charges connected with our review and evaluation of

any proposal. We'll notify you within a reasonable time whether or not you're

authorized to purchase or use the proposed type, brand and/or model of such

items or to deal with the proposed supplier. We may, from time to time,

withhold, condition and/or revoke our approval of particular items or suppliers

in the exercise of our reasonable business judgment. On receipt of written

notice of revocation, you must immediately cease to sell or use any disapproved

items and cease to deal with or use items from any such suppliers.

11.4. SPECIFICATIONS, STANDARDS AND OPERATING PROCEDURES. You agree

to operate your Rubio's Store, and use the Marks, in prompt, continuous and full

compliance with the System and the Manuals, as each is modified by us from time

to time. In particular, you'll promptly comply with all of our ongoing

requirements, standards and operating procedures relating to the operation,

appearance, function, cleanliness, menu, products, ingredients, and otherwise of

a Rubio's Store (including, without limitation, use of specified equipment,

products, services, programs and computer hardware and software), and with our

other requirements for a Rubio's Store, as they may be developed or changed by

us from time to time. You'll purchase, use and offer each of the systems,

services, equipment and products designated by us and, where we so require, use

only suppliers specified by us and will not use or offer any systems, services,

equipment, products or suppliers not specified by us. Mandatory specifications,

standards and

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operating procedures prescribed from time to time by us in the Manuals, or

otherwise communicated to you in writing, electronically or otherwise, will

constitute provisions of this Agreement as if fully set forth herein. All

references to this Agreement include all such mandatory specifications,

standards and operating procedures.

11.5. COMPLIANCE WITH LAWS AND ETHICAL BUSINESS PRACTICES. You'll

secure and maintain in force, in your name, all required licenses, permits and

certificates relating to the operation of your Rubio's Store. You'll operate

your Rubio's Store in full compliance with all applicable laws, ordinances and

regulations, including, without limitation, laws relating to health regulations,

immigration and discrimination, worker's compensation insurance, unemployment

insurance, and withholding and payment of income taxes, social security taxes

and sales taxes. We make no representations or assurances as to what (if any)

licenses, permits, authorizations or otherwise may be required in connection

with your establishment or operation of your Rubio's Store and it's your sole

responsibility to determine what licenses, permits, authorizations or otherwise

are required and to obtain them, all at your sole cost. All advertising by you

will be completely factual, in good taste in the exercise of our reasonable

business judgment, and will conform to high standards of ethical advertising.

You will, in all dealings with your customers, suppliers and public officials,

adhere to high standards of honesty, integrity, fair dealing and ethical

conduct, in each case above and beyond merely legal requirements. You'll refrain

from any business or advertising practice which may be injurious to our business

and the goodwill associated with the Marks and other Rubio's Stores. You'll

notify us in writing within 5 days of the commencement of any action, suit, or

proceeding, and of the issuance of any order, writ, injunction, award, or decree

of any court, agency, or other governmental instrumentality, which relates to,

or which may affect the operation or financial condition of, you and/or your

Rubio's Store.

11.6. MANAGEMENT AND PERSONNEL. Your Rubio's Store must be

personally managed on a full-time basis by a person who has successfully

completed all training required by us and meets all of our other then-current

standards. Although we don't require it, we strongly recommend that you

personally manage your Rubio's Store on an "on-premises" basis: absentee

ownership is not recommended by us and exposes you to a greater risk of failure

than if you are personally involved, on a full time basis, in the on-site daily

management of your Rubio's Store. Training for the first Rubio's Store manager

is included in the New Store Opening Fee but you'll be responsible for all

travel, meals, lodging and similar costs for all persons attending training and

we may charge a reasonable training fee for training subsequent Rubio's Store

managers. You'll keep us advised of the identities of the manager and other

supervisors of your Rubio's Store, and we'll have the right to deal with the

manager on matters pertaining to day-to-day operations of, and reporting

requirements for, your Rubio's Store. We reserve the right to review any

agreements between you and your manager and to require the manager to sign

confidentiality, noncompetition and other agreements acceptable to us. We

strongly recommend, but do not require, that the manager of your Rubio's Store

have a profit participation in your Rubio's Store. You'll hire all employees of

your Rubio's Store and will be solely responsible for their supervision and

possible termination, the terms of their employment and compensation and for the

proper training of such employees in the operation of your Rubio's Store. You'll

establish and maintain at your Rubio's Store an ongoing training program,

meeting our standards, for new and continuing employees.

11.7. SIGNS AND LOGOS. Subject to local ordinances, you shall

prominently display in and upon the land and buildings of the Premises interior

and exterior signs and logos using the name "RUBIO'S," and those other names,

marks, advertising signs and logos, of such nature, form, color, number,

location and size, and containing that material as we may from time to time

direct. You shall not display in or upon the Premises any sign, logo or

advertising media of any kind to which we object.

11.8. INSURANCE. You'll maintain in force insurance policies issued

by carriers approved by us covering various risks, as specified by us from time

to time, including (but not limited to) the following: (A) comprehensive general

liability insurance against claims for bodily and personal injury, death and

property damage caused by, or occurring in conjunction with, your Rubio's Store,

under one or more policies of insurance containing minimum liability coverage

prescribed by us from time to time; (B) all risk property and casualty insurance

for the replacement value of your Rubio's Store and all associated items

(including, but not limited to, leasehold improvements, furniture, fixtures,

equipment, signs, inventory, supplies, and materials); and (C) business

interruption insurance providing for continued payment of all amounts due (or to

become due) us and/or any Rubio's Affiliate under this Agreement or otherwise.

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We may periodically specify the types and amounts of coverage required

under such insurance policies and require different and/or additional kinds of

insurance at any time, including excess liability insurance. Each insurance

policy must name us as an additional insured, will contain a waiver of all

subrogation rights against us, Rubio's Affiliates and any successors and

assigns, and will provide for 30 days' prior written notice to us of any

material modifications, cancellation, or expiration of such policies.

On request by us, you'll furnish us with: (1) a copy of each renewal or

replacement insurance policy to be maintained by you for the immediately

following term; and (2) evidence of pre-payment of the premium and proof of

coverage. If you fail to maintain required insurance coverage, or to furnish

satisfactory evidence thereof and the payment of the premiums therefor, we, in

addition to our other rights and remedies hereunder, may (but aren't required

to) obtain such insurance coverage on your behalf and you'll fully cooperate

with us in our efforts to obtain the insurance policies, promptly execute all

forms or instruments required, allow any required inspections of your Rubio's

Store, and pay to us, on demand, any costs and premiums incurred by us.

Your obligations to maintain insurance coverage will not be affected by

reason of any separate insurance maintained by us, nor will the maintenance of

such insurance relieve you of any obligations under this Agreement or otherwise.

You acknowledge that no requirement for insurance contained in this Agreement

constitutes advice or a representation by us that only such policies, in such

amounts, are necessary to protect you from losses in connection with your

business under this Agreement. Maintenance of this insurance, and your

performance of your obligations under this Section, shall not relieve you of

liability under the indemnification provisions of this Agreement.

11.9. PROGRAM PARTICIPATION. We may condition your participation in

any program, whether with suppliers, referral sources or otherwise (including,

but not limited to, any program involving payments from third party suppliers),

as we determine, including, but not limited to, our requiring you to be in

compliance with such standards and qualifications as we designate and/or you

(and each Affiliate of yours) being a Rubio's franchisee in Good Standing and

not in default under this, or any other, agreement with us and/or any Rubio's

Affiliate.

11.10. 800 NUMBER, SECRET SHOPPERS. In order to (among other things)

maintain and enhance the goodwill associated with the Marks and each Rubio's

Store, we may institute various programs for verifying customer satisfaction

and/or your compliance with all operational and other aspects of the System,

including (but not limited to) an 800 number, secret shoppers or otherwise. We

will share the results of such programs, as they pertain to your Rubio's Store,

with you. You will reimburse us for all costs associated with any and all such

programs. We may fund any or all fees, costs, expenses, etc. related to such

programs from the Marketing Fund.

12. MARKS

12.1. GOODWILL AND OWNERSHIP OF MARKS. Your right to use the Marks

is derived solely from this Agreement and is limited to the operation of a

single Rubio's Store at the Premises in compliance with this Agreement and all

applicable standards, specifications and procedures prescribed by us. You'll use

the Marks only as expressly authorized by us. You won't oppose, or engage in any

acts or omissions inconsistent with, our rights in and to the Marks. Any

unauthorized use of the Marks by you is a breach of this Agreement and an

infringement of our rights in and to the Marks. This Agreement, and your

operation of your Rubio's Store, does not confer any goodwill or other interests

in the Marks on you (other than the right to operate your Rubio's Store in

compliance with this Agreement), all goodwill (whether relating to the Marks or

otherwise) and such interests belonging exclusively to us. All provisions of

this Agreement applicable to the Marks will apply to any other trademarks,

service marks and commercial symbols whenever authorized for use by, and

licensed to, you by us. Any marks or other forms of identification developed by

us in the future will remain our property and you will have no rights in or to

them but we may require you to use them as we direct. You agree that if you

breach any obligation regarding the Marks, we would have no adequate remedy at

law and that we will be entitled to equitable relief with respect to any such

breach. Your rights to the Marks are non-exclusive, are only as set forth in

this Agreement, and we retain the sole right to grant other licenses for the

Marks (in addition to those already granted) and to establish and/or become

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involved with other, similar and/or related businesses and to grant them rights

with respect to the Marks without providing you with any rights.

12.2. LIMITATIONS AND USE OF MARKS. Unless we direct or consent (in

writing) otherwise, you will use the Marks as the sole identification in

connection with your Rubio's Store, provided that you'll identify yourself as

the independent owner of your Rubio's Store as prescribed by us. You'll not use

any Mark as part of any corporate or trade name or as your primary business name

or with any prefix, suffix, or other modifying words, terms, designs, or

symbols, or in any modified form. (For example, you wouldn't use "Rubio's of

Alabama, Inc." or "Smith's Rubio's.") You won't use any Mark in connection with

the performance or sale of any unauthorized services or products or at any

location or in any other manner not expressly authorized in writing by us. The

use of any geographic or other designation in connection with the Marks will be

only as permitted by us, you will have no exclusive or other rights with regard

to any geographic or other designation and you will not take any action

inhibiting or otherwise affecting the use of the Marks by any Rubio's franchisee

or anyone else, unless expressly authorized by us in writing. You'll display the

Marks prominently as we require (including copyright, trademark and other

notices) at your Rubio's Store and in connection with advertising and marketing

materials and you won't use any of the Marks so as to negatively affect the

goodwill associated with the Marks. You won't provide any goods or services from

your Rubio's Store or otherwise under any identification or trade name, other

than the Marks. You'll give such trademark and other notices (including notices

of independent ownership) as we direct and will, at your expense, obtain

fictitious or assumed name registrations as may be required under law. You'll

sign such documents and act as required by us from time to time to protect our

interests in the Marks and you won't take any action, or omit to take an action,

so as to jeopardize our interests or their validity or enforceability of the

Marks.

12.3. NOTIFICATION OF INFRINGEMENTS AND CLAIMS. You'll immediately

notify us of any apparent or actual infringement of, or challenge to, your use

of any Mark, or any claim by any person of any rights in any Mark, and you won't

communicate with anyone other than us and our counsel in connection with any

such matter. We'll have sole discretion to take such action as we deem

appropriate in connection with such (or any related) matters, and the right to

control exclusively any settlement, litigation or Patent and Trademark Office or

other proceeding arising out of or related to any such matters or otherwise

relating to any Mark. You'll execute any and all instruments and documents,

render such assistance, and do such acts and things as may, in our opinion, be

advisable to protect and maintain our interests in any litigation or other

proceeding or to otherwise protect and maintain our interests in the Marks.

12.4. DISCONTINUANCE OF USE OF MARKS. If it becomes advisable at any

time in the exercise of our reasonable business judgment for you to modify or

discontinue the use of any of the Marks or use one or more additional or

substitute trademarks or service marks, you will promptly comply (at your sole

expense) with our directions to modify or otherwise discontinue the use of such

Marks, or use one or more additional or substitute trademarks or service marks,

including (but not limited to) replacement of all signage, etc. We won't have

any liability or obligation (whether of defense, indemnity, expense

reimbursement or otherwise) to you, and you agree to make no claim, for, or in

connection with, any modification, discontinuance or otherwise, and/or any

dispute regarding the Marks and/or your and/or our rights in or to them. We make

no guarantee that a modification, discontinuance or otherwise may not be

required, whether as a result of expiration, termination or limitation of our

rights to the Marks or otherwise.

You understand that there is always a possibility that there might be

one or more businesses, similar to the business covered by the Franchise,

operating in or near the area(s) where you may do business or otherwise, using a

name and/or marks similar to ours and with superior rights to such name and/or

marks as a result of prior use or otherwise. We strongly urge you to research

this possibility, using telephone directories, local filings and other means,

prior to your signing this Agreement, any other documents, expending or paying

any sums or making any commitments and you understand that if you fail to do so,

you're at risk.

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13. ORGANIZATION OF FRANCHISEE

13.1. REPRESENTATIONS. If Franchisee is a corporation, a limited

liability company or a partnership, you make the following representations and

warranties: (A) you are duly organized and validly existing under the laws of

the state of your formation; (B) you are qualified to do business in the state

in which the Premises are located; (C) execution of this Agreement and the

development and operation of your Rubio's Store is permitted by your governing

documents; and (D) unless otherwise approved by us in writing, your Articles of

Incorporation, Articles of Organization or written partnership agreement shall

at all times provide that your activities are limited exclusively to the

development and operation of Rubio's Stores.

13.2. GOVERNING DOCUMENTS. If Franchisee is a corporation, a limited

liability company or a partnership, copies of all of Franchisee's governing

documents (E.G., Articles of Incorporation/Organization, partnership agreement,

etc.) have been furnished to us. When any of these governing documents are

modified or changed, you promptly shall provide copies to us.

13.3. OWNERSHIP INTERESTS. If Franchisee is a corporation, a limited

liability company or a partnership, you have provided to us a list of the name,

address and ownership interest held by each person or entity with a legal or

beneficial ownership interest in you ("Ownership List"). You shall comply with

Section 14.2. prior to any change in ownership interests and shall provide us an

updated Ownership List as changes occur in order to ensure that the Ownership

List provided to us is true, accurate and complete at all times. The

requirements of this Section 13.3 shall apply only to your Control Group

(defined in Section 13.5.) if, as of the date of the first franchise-related

agreement between Franchisee and us, Franchisee was a publicly-held entity

(I.E., an entity THAT has a class of securities traded on a recognized

securities exchange or quoted on the inter-dealer quotation sheets known as the

"pink sheets.").

13.4. RESTRICTIVE LEGEND. If Franchisee is a corporation, you shall

maintain stop-transfer instructions against the transfer on your records of any

voting securities. If Franchisee is a corporation, a limited liability company

or a partnership, each stock or membership certificate shall provide that any

assignment or transfer of ownership interests is subject to the restrictions

imposed by this Agreement and the Franchise Agreement(s) we and you will enter.

13.5. CONTROL GROUP. If Franchisee is a corporation, a limited

liability company or a partnership, Exhibit 1 lists those persons who we and you

have designated as your "Control Group" who, at all times, shall own at least

51% of all legal and beneficial ownership interests in you. In the event of any

change in the Control Group or in the ownership interests of any member of the

Control Group, you shall timely provide us written notice of the change.

13.6. GUARANTEES. All members of the Control Group shall jointly and

severally guarantee payment and performance under this Agreement and shall bind

themselves to the terms of this Agreement pursuant to the attached Guarantee and

Assumption of Franchisee's Obligations ("Guarantee"). Unless Franchisee is a

publicly-held entity, all of your executive officers and holders of a legal or

beneficial interest of 10% or more ("10% Owners") also shall bind themselves to

the terms of this Agreement pursuant to the attached Guarantee. Notwithstanding

the foregoing, we reserve the right, in the exercise of our reasonable business

judgment, to waive the requirement that some or all of the previously described

individuals execute the attached Guarantee. We also reserve the right to require

any guarantor to provide personal financial statements to us from time to time.

13.7. AUTHORIZED AGENT. Franchisee shall designate and retain an

individual to serve as your Authorized Agent to act on your behalf and to make

any and all commitments on your behalf. The Authorized Agent, as of the date if

this Agreement, is identified in Exhibit 1. We may deal exclusively with the

Authorized Agent on all matters pertaining to this Agreement until we receive

written notice from you of the appointment of a new Authorized Agent who we have

approved. The Authorized Agent shall meet all of the following qualifications:

A. The Authorized Agent, at all times, shall have an

equity ownership interest in you unless you were a publicly-held entity or a

wholly-owned subsidiary of a publicly-held entity as of the date of the first

franchise-related agreement between you and us.

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B. The Authorized Agent, at all times, shall be a member

of the Control Group and have full control over the day-to-day operation of the

your Rubio's Store.

C. The Authorized Agent shall devote best efforts to

supervising the operation of your Rubio's Stores.

D. The Authorized Agent shall be responsible to ensure

that your Rubio's Store is staffed at all times by an individual(s) that have

successfully completed our training program and will ensure that those

individuals maintain a certified trained status and will obtain additional or

remedial training as we may require.

If the Authorized Agent no longer meets these qualifications, you shall

designate another person to act as Authorized Agent within 30 days of the date

of failing to remain qualified.

14. TRANSFERABILITY OF INTEREST

14.1. TRANSFERS BY US. We have the absolute, unrestricted right,

exercisable at any time, to transfer and assign all or any part of our rights

and obligations under this Agreement to any person or legal entity without your

consent. If we transfer this Agreement, or any and/or all of our rights and/or

obligations under it, all our past, current and future obligations to you will

cease and be forever extinguished. We also have the right, from time to time, to

delegate the performance of any portion or all of our obligations and duties

under this Agreement to designees, whether affiliates, agents or independent

contractors with whom we have contracted to provide this service.

You expressly recognize that we, without your consent, may sell our

assets, the Marks or the System outright to a third party; may merge, acquire

other corporations or entities, or be acquired by another corporation or other

entity; may undertake a refinancing, recapitalization, leveraged buy-out or

other economic or financial restructuring; and, with regard to any or all of the

above sales, assignments and dispositions, you expressly and specifically waive

any claims, demands or damages regarding the loss of the Marks (or any

variation) and/or the loss of association with or identification of us as the

franchisor under this Agreement.

14.2. TRANSFERS BY YOU.

A. You understand and acknowledge that the rights and

duties set forth in this Agreement are personal to you and that we have entered

into this Agreement in reliance on your business skill, financial capacity,

personal character, experience and demonstrated or purported ability in

developing and operating high quality foodservice operations. Accordingly,

neither you nor any immediate or remote successor to any part of your interest

in this Agreement, nor any individual, partnership, corporation or other legal

entity which directly or indirectly controls you shall sell, assign, transfer,

convey, give away, pledge, mortgage, or otherwise encumber any interest in you,

this Agreement or any other assets pertaining to your operations under this

Agreement (collectively "Transfer") without our prior written consent.

Except as otherwise provided in this Agreement, any purported Transfer,

by operation of law or otherwise, not having our prior written consent shall be

null and void and shall constitute a material breach of this Agreement, for

which we may terminate this Agreement without providing you an opportunity to

cure the breach.

B. You shall advise us in writing of any proposed

Transfer, submit (or cause the proposed transferee to submit) a franchise

application for the proposed transferee, and submit a copy of all contracts and

all other agreements or proposals, and all other information requested by us,

relating to the proposed Transfer. If we do not exercise our right of first

refusal, the decision as to whether or not to approve a proposed Transfer shall

be made by us in the exercise of our reasonable business judgment and shall

include numerous factors deemed relevant by us. These factors may include, but

will not be limited to, the following:

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