270 Legal [Sample Agreements]

MASTER FRANCHISE AGREEMENT AND GUARANTY

THIS MASTER FRANCHISE AGREEMENT AND GUARANTY (the “Agreement”) is made and entered into this 29th day of December, 2006, by and between Power Smoothie Café Franchising. Inc. a Florida corporation (“Power Smoothie”), and PS Initiatives, LLC, a Texas limited liability company (individually. “PSI”) and William A. Long, individually, as guarantor (“Guarantor”) (PSI and Guarantor are collectively referred to as “Master Franchisee”).

WHEREAS. Power Smoothie is the owner and operator of certain proprietary and other property rights and interests in and to:

(i) the “Power Smoothie CaféTM” name and logo and such other related trademarks, trade names, service marks, logotypes, insignias. trade dress and designs as Power Smoothie may use from time to time (the “Trademarks”) in connection with the development, operation and maintenance of restaurants featuring smoothies, wraps. and such other menu items as Power Smoothie may use and authorize from time to time (the “Franchised Restaurants”). and

(ii) Power Smoothie’s processes, trade secrets and procedures for the operation of such restaurants, including advertising, sales techniques, materials, signs, exterior decoration and decor. personnel management and control systems, bookkeeping and accounting methods. and in general, a style, system and method of business operation developed through and by reason of its prior business experience (the “System”);

WHEREAS, Power Smoothie desires to expand and develop the Franchised Restaurants, and seeks a master franchisee who will build, open, and/or operate or procure and assist subfranchisees (“Subfranchisee”) to build, open and/or operate numerous restaurants conducting business under the Trademarks and System within the development area, defined herein; and

WHEREAS, Master Franchisee desires to build, open, and/or operate Franchised Restaurants, and procure. qualify. train and assist Subfranchisees to build, open, and/or operate Franchised Restaurants;

WHEREAS Power Smoothie desires to grant to Master Franchisee the right to build, open and/or operate, and procure, qualify. train and assist the Subfranchisee to build. open, and/or operate Franchised Restaurants in accordance with the terms and upon the conditions contained in this Agreement.

NOW, THEREFORE, the parties, in consideration of the promises, undertakings and commitments of each Party to the other set forth herein, expand including into be legally bound, hereby mutually agree as follows:

1. GRANT

1.1 Power Smoothie grants to Master Franchisee the exclusive right in the Territory (as defined in Exhibit A). and Master Franchisee accepts the obligations, pursuant to the terms and conditions of this Agreement in complete compliance with applicable laws, rules, and regulations. and in accordance with the development schedule described in Section 2.3 hereof:

(a) The right and license to use the Trademarks in connection with the Franchised Restaurants to be conducted by Master Franchisee pursuant to the provisions of this Agreement or for any Renewal Period, a then-current Power Smoothie Franchise Agreement; and

(b) To sub-license and assist Subfranchisees to establish and operate Franchised Restaurants pursuant to a separate Franchise Agreement by and between PSI and the Subfranchisee for each such Franchised Restaurant unit as described in Section 2 hereof (Master Franchised Restaurants and Franchised Restaurants shall he referred to collectively in this Agreement as “Subfranchises” or “Franchised Restaurants”); and

(c) Enforce the Franchise Agreements to which it is a party with Subfranchisees.

1.2 Master Franchisee expressly acknowledges and agrees to open and/or operate a minimum number of Franchised Restaurants each year in the Territory either by itself or through Subfranchisees as set forth on Exhibit B hereto in accordance with Power Smoothie’s then-current franchise agreement. Master Franchisee expressly acknowledges Master Franchisee agrees that it shall not open or approve for opening any Franchised Restaurant or operating a territory or area without first receiving Power Smoothie’s written consent to the identity of the Subfranchisee and Franchised Restaurant location and/or territory or area.

1.3 Power Smoothie shall retain the right among others. for itself or through any affiliate, and in any manner and on any terms and conditions Power Smoothie deems advisable, and without granting Master Franchisee any rights therein:

(a) To own, acquire, establish, operate, and/or license others to establish and operate businesses using the Trademarks, or other trademarks, and System within or outside the Territory (which business may solicit customers inside the Territory) in order to assist Master Franchisee in establishing and/or opening Franchised Restaurants and/or to establish, develop, or open Franchised Restaurants for the benefit of the System in it sole and absolute discretion, provided that same does not conflict with any exclusive rights granted under any Franchise Agreements. In such instance, the Parties agree that Master Franchisee shall receive one-half (1/2) of all fees (including royalties; franchise fees, development fees, and profits Power Smoothie or Master Franchisee earns from the sale of any new franchise location) collected by Power Smoothie from any third-party business opened pursuant to this paragraph within the Territory;

(b) To own. acquire. establish, operate, and/or license others to establish and operate. businesses under other trademarks, or other systems; and

(c) To sell or distribute, at retail or wholesale directly or indirectly, or license others to sell or distribute, any products which bear any trademarks, including the Trademarks, within or outside the Territory.

2. TERM, RENEWAL AND DEVELOPMENT OF THE TERRITORY

2.1 Except as otherwise provided herein, the term of this Agreement shall commence on the Effective Date and shall expire ten (10) years from the date of its execution.

2.2 The Parties agree that this Master Franchise Agreement shall renew for an additional term of five (5) years (the “Renewal Period”) if:

(a) Master Franchisee shall give Power Smoothie written notice of Master Franchisee’s desire to renew no fewer than twelve (12) months prior to the end of the then-current term;

(b) Master Franchisee shall not be in default of any provision of this Agreement or any other Agreement between Master Franchisee and Power Smoothie or Power Smoothie’s affiliates and Master Franchisee shall have not committed two (2) or more defaults of any provision of this Agreement throughout the term of this Agreement, including all development requirements herein;

(c) Master Franchisee shall sign Power Smoothie’s then current master franchisee agreement if requested by Power Smoothie;

(d) Master Franchisee shall sign a general release, in the form required by Power Smoothie, releasing Power Smoothie, its affiliates, and their respective shareholders, directors, employees, and agents in their corporate and individual capacities, of all claims, liabilities and obligations which Master Franchisee may have against Power Smoothie.

Master Franchisee agrees that Power Smoothie is not required to renew this Master Franchise Agreement for the Renewal Period if Master Franchisee does not strictly comply with the preceding conditions. Should Master Franchisee not strictly comply with the preceding conditions, Power Smoothie may, in its sole and absolute discretion, and upon terms and conditions (including the payment of a renewal fee) offer Master Franchisee the opportunity to enter Power Smoothie’s then-current master franchise agreement for the Renewal Period.

2.3 Master Franchisee agrees that there shall be open and in operation no fewer than the minimum cumulative number of Subfranchises described in the “Minimum Cumulative Number of Subfranchises Open and in Operation” in the Development Schedule attached as Exhibit B hereto. The first Subfranchise opened for business in the Territory in accordance with the foregoing will hereinafter be referred to as the “Pilot Business.”

2.4 Each Subfranchise, including any Subfranchise established and operated by the Master Franchisee in accordance with the provisions of Section 1.2 hereof, shall be established and operated pursuant to a unit franchise agreement (“Franchise Agreement”) or Area Development Agreement prepared and/or approved by Power Smoothie.

2.5 Master Franchisee shall provide Power Smoothie with a copy of each executed Franchise Agreement or Area Development Agreement for a Subfranchise in the Territory within fourteen (14) days after execution. Each Franchise Agreement shall state that any and all rights of the Franchise Agreement shall be assigned to Power Smoothie upon the termination of this Agreement for any reason.

2.6 Master Franchisee shall provide Power Smoothie with the date of opening of each Subfranchise at least thirty (30) days prior to opening.

2.7 Master Franchisee’s failure to adhere to the Development Schedule is a default of this Agreement.

3. FEES

3.1 Master Franchisee shall pay to Power Smoothie an initial Master Franchise fee of Two Hundred Thousand Dollars ($200.000.00) (the “Fee”) payable as follows: Forty-Five Thousand Dollars ($45,000.00) upon execution, and Five Thousand Dollars ($5,000) no later than January 31, 2007, and the remaining One Hundred Fifty Thousand Dollars ($150.000.00) shall be paid by Master Franchisee by Master Franchisee paying one-quarter (1/4) of all fees to which it is entitled under this Agreement beginning with the fourth Franchised Restaurant until such time as the Fee is paid in full. The Parties agree that Master Franchisee shall not have to pay any part of the Fee from proceeds due Master Franchisee from the opening of the first three (3) Franchised Restaurants. Master Franchisee acknowledges and agrees that the Fee is fully earned and non-refundable upon execution of this Agreement.
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