Buffalo Wild Wings 2005 Annual Report Download

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FORM 10−K
BUFFALO WILD WINGS INC − BWLD
Filed: March 02, 2006 (period: December 25, 2005)
Annual report which provides a comprehensive overview of the company for the past year

Table of contents

  • Page 1
    FORM 10âˆ'K BUFFALO WILD WINGS INC âˆ' BWLD Filed: March 02, 2006 (period: December 25, 2005) Annual report which provides a comprehensive overview of the company for the past year

  • Page 2
    ...Item 9B. Market for Registrant's Common Equity, Related Stockholder Selected Financial Data 19 Management's Discussion and Analysis of Financial Condition and Results of Operations 20 Quantitative and Qualitative Disclosures About Market Risk 31 Financial Statements and Supplementary Data 32 Changes...

  • Page 3
    ... AND SUPPLEMENTARY DATA CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON CONTROLS AND PROCEDURES OTHER INFORMATION PART III ITEM 10. ITEM 11. ITEM 12. ITEM 13. ITEM 14. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT EXECUTIVE COMPENSATION SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND...

  • Page 4
    SIGNATURES EXâˆ'10.11 (Material contracts) EXâˆ'10.12 (Material contracts) EXâˆ'10.16 (Material contracts) EXâˆ'10.17 (Material contracts) EXâˆ'10.18 (Material contracts) ...

  • Page 5
    ...SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 25, 2005 OR |_| TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM_____TO_____. COMMISSION FILE NUMBER: 000âˆ'24743 BUFFALO WILD WINGS, INC. (EXACT NAME OF REGISTRANT AS...

  • Page 6
    DOCUMENTS INCORPORATED BY REFERENCE Portions of the Proxy Statement for the 2006 Annual Meeting of Shareholders are incorporated by reference into Part III of this report

  • Page 7
    ... Selected Financial Data Management's Discussion and Analysis of Financial Condition and Results of Operations 17 19 20 31 32 52 52 53 Item 6. Item 7. Item 7A. Quantitative and Qualitative Disclosures About Market Risk Item 8. Item 9. Financial Statements and Supplementary Data Changes in and...

  • Page 8

  • Page 9
    ... franchising program. In November 2003, we completed an initial public offering and became a publicly held company. OUR CONCEPT AND BUSINESS STRATEGY Our goal is to continue to grow and develop the Buffalo Wild Wings(R) Grill & Bar concept into a leading national restaurant chain. To do so, we plan...

  • Page 10
    3

  • Page 11
    ...âˆ'unit area development agreements. THE BUFFALO WILD WINGS MENU Our restaurants feature a variety of menu items including our Buffalo, New Yorkâˆ'style chicken wings spun in one of our signature sauces (from sweet to screamin' hot: Teriyaki(TM), Sweet BBQ(TM), Mild(TM), Medium(TM), Spicy Garlic...

  • Page 12
    ...11 a.m. to 2 a.m. Closing times vary depending on the day of the week and city and state regulations governing the sale of alcoholic beverages. Our franchise agreements require franchisees to operate their restaurants for a minimum of 12 hours a day. SITE SELECTION AND DEVELOPMENT Our site selection...

  • Page 13
    5

  • Page 14
    ... and obtain the lowest possible prices for our ingredients, products and supplies, our purchasing team negotiates prices based on systemâˆ'wide usage for both companyâˆ'owned and franchised restaurants. The kitchen manager for each restaurant places orders with approved local suppliers and...

  • Page 15
    ... to support our future growth plans. We utilize a standard pointâˆ'ofâˆ'sale system in all of our companyâˆ'owned restaurants that helps facilitate the operation of the restaurants by recording sales, cost of sales, labor and other operating metrics and allows managers to create various reports. We...

  • Page 16
    ... to the "Buffalo Wild Wings(R)" service mark and to certain other service marks and trademarks used in our system. We attempt to protect our sauce recipes as trade secrets by, among other things, requiring a confidentiality agreement with our sauce supplier and executive officers. It is possible...

  • Page 17
    ... supply. Additional information related to chicken wing prices is included in Item 7 under "Results of Operations." IF WE ARE UNABLE TO SUCCESSFULLY OPEN NEW RESTAURANTS, OUR REVENUE GROWTH RATE AND PROFITS MAY BE REDUCED. To successfully expand our business, we must open new Buffalo Wild Wings...

  • Page 18
    our franchisees open may not achieve operating results similar to those of our existing restaurants. Our ability to expand successfully will depend on a number of factors, many of which are beyond our control. These factors include: 9

  • Page 19
    ... of the Buffalo Wild Wings brand. Sales at restaurants opening in new markets may take longer to reach average annual restaurant sales, if at all, thereby affecting the profitability of these restaurants. We may not be successful in operating our restaurants in new markets on a profitable basis. NEW...

  • Page 20

  • Page 21
    ...sameâˆ'store sales; Fluctuations in food costs, particularly fresh chicken wings; The timing of new restaurant openings, which may impact margins due to the related preopening costs and initially higher restaurant level operating expense ratios; Labor availability and costs for hourly and management...

  • Page 22
    ...in the supply of food products. CHANGES IN CONSUMER PREFERENCES OR DISCRETIONARY CONSUMER SPENDING COULD HARM OUR PERFORMANCE. Our success depends, in part, upon the continued popularity of Buffalo, New Yorkâˆ'style chicken wings, our other menu items, sports bars and casual dining restaurant styles...

  • Page 23
    ... economic conditions, disposable consumer income and consumer confidence. A decline in consumer spending or in economic conditions could reduce guest traffic or impose practical limits on pricing, either of which could harm our business, financial condition, operating results or cash flow. 12

  • Page 24
    ... OUR BUSINESS ADVERSELY. There are health risks associated with eating contaminated or improperly handled or prepared food items. Negative publicity over illness caused by improper handling or preparation of food items could harm our future revenue and profitability. While we currently maintain...

  • Page 25
    ... goodwill in our marks. We attempt to protect our sauce recipes as trade secrets by, among other things, requiring confidentiality agreements with our sauce suppliers and executive officers. However, we cannot be sure that we will be able to successfully enforce our rights under our marks or prevent...

  • Page 26
    ... site in the event of default under the lease or franchise agreement. The following table sets forth the 35 states in which Buffalo Wild Wings restaurants are located and the number of restaurants in each state as of December 25, 2005: NUMBER OF RESTAURANTS OPEN COMPANYâˆ'OWNED FRANCHISED TOTAL...

  • Page 27
    ... our business, including claims arising from personal injuries, contract claims, franchiseâˆ'related claims, dram shop claims, employmentâˆ'related claims and claims from guests or employees alleging injury, illness or other food quality, health or operational concerns. To date, none of these types...

  • Page 28
    ...in connection with payment of the exercise price upon stockâˆ'forâˆ'stock option exercises or payment of taxes upon vesting of restricted stock by employees, including seven executive officers. INITIAL PUBLIC OFFERING AND USE OF PROCEEDS We completed an initial public offering of 3,450,000 shares of...

  • Page 29
    per share pursuant to registration statement No. 333âˆ'108695, which was declared effective on November 20, 2003. The managing underwriters for the IPO were RBC Capital Markets, SG Cowen and McDonald Investments Inc. 17

  • Page 30
    ... are expected to be used for general corporate purposes, including opening new restaurants and renovation and maintenance of existing restaurants, acquiring existing restaurants from franchisees, research and development, working capital, and capital expenditures. We invest our cash balances in...

  • Page 31
    ... set forth in Item 8 of this Form 10âˆ'K. Fiscal Years Ended(1 Dec. 30, Dec. 29, Dec. 28, Dec. 26, Dec 25, 2001 2002 2003 2004 2005 in thousands, except share and per share data) CONSOLIDATED STATEMENTS OF EARNINGS DATA: Revenue: Restaurant sales Franchising royalties and fees Total revenue Costs...

  • Page 32
    ... chain of 1,000 locations, with 20% annual unit growth in the next several years, continuing the strategy of developing both companyâˆ'owned and franchised restaurants. Our growth and success depend on several factors and trends. First, we continue to monitor and react to our cost of goods sold...

  • Page 33
    ... general and administrative, relate to both companyâˆ'owned restaurant and franchising operations. As a growing company, we review our trend in general and administrative expenses, and are focused on reducing this expense as a percentage of revenue. We operate on a 52 or 53âˆ'week fiscal year ending...

  • Page 34
    ...considered in making the accruals. We estimate future lease obligations based on these factors and evaluate quarterly the adequacy of the estimated reserve based on current market conditions. During 2003, we recorded a reserve of $163,000, which included charges of $87,000 for a restaurant closed in...

  • Page 35
    ... month's purchases. During fiscal 2003, 2004, and 2005, vendor allowances were recorded as a reduction in inventoriable costs, and cost of sales was reduced by $2.3 million, $3.9 million, and $4.0 million, respectively. REVENUE RECOGNITION âˆ'âˆ' FRANCHISE OPERATIONS Our franchise agreements have...

  • Page 36
    ... as a percentage of restaurant sales. Fiscal Years Ended Dec. 28, Dec. 26, Dec. 25, 2003 2004 2005 Revenue: Restaurant sales Franchising royalties and fees Total revenue Costs and expenses: Restaurant operating costs: Cost of sales Labor Operating Occupancy Depreciation General and administrative...

  • Page 37
    ... restaurants operating at least fifteen months): Fiscal Years Ended Dec. 28, Dec. 26, Dec. 25, 2003 2004 2005 Companyâˆ'owned sameâˆ'store sales Franchised sameâˆ'store sales 4.3% 5.6 9.7% 7.6 3.2% 2.2 The annual average prices paid per pound for fresh chicken wings are as follows: Fiscal Years...

  • Page 38
    ... of their current sales levels for restaurants in new markets. Depreciation increased by $2.0 million, or 21.1%, to $11.8 million in 2005 from $9.7 million in 2004. The increase was primarily due to the additional depreciation on 19 new restaurants in 2005 and 19 new restaurants opened in 2004...

  • Page 39
    ..., and incurred costs of approximately $30,000 for restaurants that opened in 2003. Average preopening cost per restaurant was $132,000 and $94,000 in 2005 and 2004, respectively. The increase was reflective of additional training and development of managers and team members at new locations. In 2006...

  • Page 40
    subscriptions on sports packages did not increase at the same rate relative to our sales growth. 25

  • Page 41
    ... other general business needs. Our main sources of liquidity and capital during the last three years have been cash flows from operations and the issuance of common stock through an initial public offering in November 2003. The cash and marketable securities balance at the fiscal year ended 2005 was...

  • Page 42
    receivable was primarily due to higher credit card receivables partially offset by lower landlord receivables for tenant improvements. The increase in income tax receivables was due to the timing of payments. 26

  • Page 43
    ... fees was due to an increased number of franchise agreements sold but not yet opened. The increase in prepaid expenses was due to higher insurance costs as we completed our initial public offering. Net cash used in investing activities for 2003, 2004, and 2005 was $10.7 million, $59.9 million, and...

  • Page 44
    ... of factors, including increases or decreases in sameâˆ'store sales, changes in fresh chicken wing prices, the timing and number of new restaurant openings and their related expenses, asset impairment charges, store closing charges, general economic conditions and seasonal fluctuations. As a result...

  • Page 45
    ... (UNAUDITED) Mar. 28, 2004 Restaurant sales Franchise royalties and fees Total revenue Costs and expenses: Restaurant operating costs: Cost of sales Labor Operating Occupancy Depreciation General and administrative Preopening Restaurant impairment and closures Total costs and expenses Income from...

  • Page 46
    ...) Mar. 28, 2004 Revenue: Restaurant sales Franchise royalties and fees Total revenue Costs and expenses: Restaurant operating costs: Cost of sales Labor Operating Occupancy Depreciation General and administrative Preopening Restaurant impairment and closures Total costs and expenses Income from...

  • Page 47
    ...owned and franchised restaurants is fresh chicken wings. We purchase fresh chicken wings based on current market prices that are subject to monthly fluctuation. A material increase in fresh chicken wing costs may adversely affect our operating results. Fresh chicken wing prices in 2005 averaged 14...

  • Page 48
    ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA BUFFALO WILD WINGS, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets as of December 26, 2004 and December 25, 2005 Consolidated Statements of Earnings for the Years...

  • Page 49
    ... operations and their cash flows for each of the fiscal years in the threeâˆ'year period ended December 25, 2005, in conformity with U.S. generally accepted accounting principles. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States...

  • Page 50
    BUFFALO WILD WINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 26, 2004 AND DECEMBER 25, 2005 (DOLLAR AMOUNTS IN THOUSANDS) December 26, 2004 ASSETS Current assets: Cash and cash equivalents Marketable securities Accounts receivableâˆ'âˆ'franchisees, net of allowance of $25 ...

  • Page 51
    BUFFALO WILD WINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS FISCAL YEARS ENDED DECEMBER 28, 2003, DECEMBER 26, 2004, AND DECEMBER 25, 2005 (DOLLAR AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA) 2003 Revenue: Restaurant sales Franchise royalties and fees Total revenue Costs...

  • Page 52
    BUFFALO WILD WINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FISCAL YEARS ENDED DECEMBER 28, 2003, DECEMBER 26, 2004, AND DECEMBER 25, 2005 (DOLLAR AMOUNTS IN THOUSANDS) Common Stock Shares Amount Balance at December 29, 2002 Net earnings Accretion resulting from ...

  • Page 53
    BUFFALO WILD WINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FISCAL YEARS ENDED DECEMBER 28, 2003, DECEMBER 26, 2004, AND DECEMBER 25, 2005 (DOLLAR AMOUNTS IN THOUSANDS) Fiscal years ended December 28, December 26, December 25, 2003 2004 2005 Cash flows from operating ...

  • Page 54
    ... in December. The fiscal years ended December 28, 2003, December 26, 2004, and December 25, 2005, were comprised of 52 weeks. (D) RESTAURANT SALES CONCENTRATION As of December 25, 2005, the Company operated 21 Companyâˆ'owned restaurants and had 60 franchised restaurants in the state of Ohio. The...

  • Page 55
    ...of five or ten years, depending on contract terms and if certain conditions are met. The Company provides the use of the Buffalo Wild Wings trademarks, system, training, preopening assistance, and restaurant operating assistance in exchange for area development fees, franchise fees, and royalties of...

  • Page 56
    ... Company believes that franchising is an effective and efficient means to expand the Buffalo Wild Wings brand. Franchised restaurants open for a full year averaged $2.1 million in sales in 2005. The franchisee is required to operate their restaurants in compliance with their franchise agreement that...

  • Page 57
    ...in 2005 and 75,964 restricted stock units are subject to performance vesting requirements in future periods. The Company applies the intrinsicâˆ'value method in accounting for its employee stock option grants and records compensation expense for option grants to employees under its stock option plan...

  • Page 58
    ... options' vesting period, typically four years. Fiscal Years Ended December 28, December 26, December 25, 2003 2004 2005 Net earnings, as reported Add: Total stockâˆ'based employee compensation expense included in reported earnings, net of related tax effects Deduct: Total stockâˆ'based employee...

  • Page 59
    ... the Company's construction period. The Company will adopt this new pronouncement in its first quarter of fiscal 2006. The adoption of FSP 13âˆ'1 is expected to increase preâˆ'opening costs by $30,000 per Companyâˆ'owned restaurant opening in 2006. In November 2005, the FASB issued Staff Position No...

  • Page 60
    ...its restaurants and corporate offices under operating leases that have various expiration dates. In addition to base rents, leases typically require the Company to pay its share of maintenance and real estate taxes and certain leases include provisions for contingent rentals based upon sales. Future...

  • Page 61
    ... and operating expenses, require payment of percentage rents based upon sales levels. Rent expense, excluding the Company's proportionate share of real estate taxes and building operating expenses, was as follows: Fiscal Years Ended December 28, December 26, December 25, 2003 2004 2005 Minimum...

  • Page 62
    ...plan for employees, officers, and directors. The option price for shares issued under this plan is to be not less than the fair market value on the date of grant. Incentive stock options become exercisable in four equal installments from the date of the grant and have a contractual life of ten years...

  • Page 63
    .... The Plan became effective upon the effective date of the Company's initial public offering (IPO). Participants may purchase the Company's common stock at 85% of the beginning or ending closing price, whichever is lower, for each sixâˆ'month period ending in May and November. During 2004 and 2005...

  • Page 64
    of common stock under the plan and has 250,309 available for future sale. 47

  • Page 65
    ...8,165,078 438,803 8,603,881 $0.88 0.84 Fiscal year ended December 25, 2005 Earnings Shares Perâˆ'share (numerator) (denominator) amount Net earnings Earnings per common share Effect of dilutive securitiesâˆ'âˆ'stock options and warrants Earnings per common shareâˆ'âˆ'assuming dilution $ 8,880...

  • Page 66
    ... (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PERâˆ'SHARE AMOUNTS) (9) SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Fiscal Years Ended December 28, December 26, December 25, 2003 2004 2005 Cash paid during the period for: Interest Income taxes Noncash financing and investing transactions: Capital...

  • Page 67
    recoverable based on estimated discounted future cash flows and the underlying fair value of the assets. 49

  • Page 68
    ... salary, executive officers are entitled to participate in additional equity incentive plans and other employee benefit plans. Fiscal 2005 annual base salary commitments under employment agreements were $1.2 million. (13) RELATED PARTY TRANSACTIONS It is the Company's policy that all related party...

  • Page 69
    terms available or the amounts that would have to be paid or received, as applicable, in armsâˆ'length transactions with independent thirdâˆ'parties. 50

  • Page 70
    BUFFALO WILD WINGS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 26, 2004 AND DECEMBER 25, 2005 (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PERâˆ'SHARE AMOUNTS) The Company subleases a portion of its main offices to Carefree Capital Partners, Limited Partnership (Carefree) on a...

  • Page 71
    ... our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Stockholders Buffalo Wild Wings, Inc.: We have audited management...

  • Page 72
    Commission (COSO). The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management's assessment and an ...

  • Page 73
    ... sheets of Buffalo Wild Wings, Inc. and subsidiaries as of December 26, 2004 and December 25, 2005, and the related consolidated statements of earnings, stockholders' equity, and cash flows for each of the fiscal years in the threeâˆ'year period ended December 25, 2005, and our report dated February...

  • Page 74
    ... in connection with the 2006 Annual Meeting of Shareholders. Such information is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by this item relating to the security ownership of...

  • Page 75
    ... filed with this report and can be found at Item 8 of this Form 10âˆ'K. Report of Independent Registered Public Accounting Firm dated February 24, 2006 Consolidated Balance Sheets as of December 26, 2004 and December 25, 2005 Consolidated Statements of Earnings for the Years Ended December 28, 2003...

  • Page 76
    SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: March 2, 2006 BUFFALO WILD WINGS, INC. By /s/ SALLY J. SMITH SALLY J. SMITH HIEF EXECUTIVE OFFICER...and thing ...

  • Page 77
    56

  • Page 78
    ... Buffalo Wild Wings, Inc. and subsidiaries (the Company) as of December 26, 2004 and December 25, 2005 and the related consolidated statements of earnings, stockholders' equity, and cash flows for each of the fiscal years in the threeâˆ'year period ended December 25, 2005 as contained in the annual...

  • Page 79
    ... of Franchise Agreement Form of Area Development Agreement Employee Stock Purchase Plan and Amendment No. 1 (1) (2) Amendment to Management Deferred Compensation Plan, dated as of December 4, 2003 (incorporated by reference 10.14 to Exhibit 10.20 to our Form 10âˆ'K for the fiscal year ended December...

  • Page 80
    ... Financial Officer Pursuant to Section 906 of the Sarbanesâˆ'Oxley Act of 2002 Filed herewith. (1) (2) Incorporated by reference to the corresponding exhibit numbers to our Registration Statement on Form Sâˆ'1, Reg. No. 333âˆ'108695 Management agreement or compensatory plan or...

  • Page 81
    EXHIBIT 10.11 BUFFALO WILD WINGS(R) FRANCHISE AGREEMENT BETWEEN BUFFALO WILD WINGS INTERNATIONAL, INC. 1600 UTICA AVENUE, SUITE 700 MINNEAPOLIS, MN 55416 AND AUTHORIZED LOCATION Street City State Zip Code EFFECTIVE DATE To be completed by us)

  • Page 82
    ... BUFFALO WILD WINGS(R) FRANCHISE AGREEMENT SECTION 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. PAGE DEFINITIONS...1 GRANT OF LICENSE...2 TRADEMARK STANDARDS AND REQUIREMENTS...4 TERM AND RENEWAL...5 FACILITY STANDARDS AND MAINTENANCE...6 PRODUCTS AND OPERATIONS STANDARDS AND REQUIREMENTS...

  • Page 83
    ...as all license and use fees. Gross Sales excludes sales taxes. C. "Menu Items" means the chicken wings, sandwiches and other products and beverages prepared according to our specified recipes and procedures, as we may modify and change them from time to time. D. "Principal Owner" means any person or...

  • Page 84
    ..., you must, within 10 days from the date of each such change, update the Ownership and Management Addendum. As used in this Agreement, any reference to Principal Owner includes all Principal Owners. E. "Restaurant" means the BUFFALO WILD WINGS Restaurant you develop and operate pursuant to this...

  • Page 85
    ... or impose conditions on our development of future franchised, company or affiliate owned restaurants at any time or at any location. You acknowledge that the consumer service area or trade area of another BUFFALO WILD WINGS restaurant may overlap with your Designated Area. You also acknowledge and...

  • Page 86
    ... as BUFFALO WILD WINGS restaurants. As a result, you agree that the following locations ("Special Sites") are excluded from the Designated Area and we have the right, subject to our thenâˆ'current Special Sites Impact Policy, to develop or franchise such locations: (1) military bases; (2) public...

  • Page 87
    ... with products and services approved by us and that meet our standards or requirements with respect to quality, mode and condition of storage, production, preparation and sale, and portion and packaging. C. Restaurant Identification. You must use the name BUFFALO WILD WINGS GRILL & BAR as the trade...

  • Page 88
    ... or smaller trade area, we may reduce the number of required site evaluations. You may not use the Restaurant premises or Authorized Location for any purpose other than the operation of a BUFFALO WILD WINGS Restaurant during the term of this Agreement. We make no guarantees concerning the success of...

  • Page 89
    ... if this Agreement is for your first BUFFALO WILD WINGS restaurant or if you or any of your affiliates have failed to timely open any other BUFFALO WILD WINGS restaurant in accordance with the terms of any franchise agreement with us, you must use one of our designated general contractors and...

  • Page 90
    ... and maintain all required zoning changes, building, utility, health, sanitation, liquor and sign permits and licenses and any other required permits and licenses (if this Agreement is for your first BUFFALO WILD WINGS restaurant or if in any previous franchise agreement executed between you or...

  • Page 91
    ... evaluation system then being used by us) and accepted by us within 60 days after closing the prior Restaurant, have opened the new Restaurant for business within 180 days of such closure and complied with any other conditions that we reasonably require. You must pay the costs of any relocation, and...

  • Page 92
    .... From time to time as we require, you must effect items of modernization and/or replacement of the building, premises, trade dress, equipment and grounds as may be necessary for your Restaurant to conform to the standards for similarly situated new BUFFALO WILD WINGS restaurants. The maximum...

  • Page 93
    ... we designate and approve in writing from time to time for sale by your Restaurant. You must offer for sale from the Restaurant all items and only those items listed as Menu Items and other approved food and beverage products. We have the right to make modifications to these items from time to time...

  • Page 94
    ... may require you to carry and offer for sale in the Restaurant a representative supply of approved trademarked clothing and other novelty items, including special promotional items that we develop and market from time to time. F. Health and Sanitation. Your Restaurant must be operated and maintained...

  • Page 95
    ... fee for each visit will vary. H. Period of Operation. Subject to any contrary requirements of local law, your Restaurant must be opened to the public and operated at least 12 hours each day of the year, although you have the option to close your Restaurant on Thanksgiving, Christmas Eve, Christmas...

  • Page 96
    ...right to require you to offer catering service to customers located within the Designated Area. Any catering or delivery services must meet our written standards. You also must charge the same price for products offered by the Restaurant whether delivered or catered by or sold in the Restaurant. Any...

  • Page 97
    ... Restaurant or the BUFFALO WILD WINGS system, we have the right to require that you replace the Control Person or Unit General Manager with an individual who meets our standards and qualifications within 30 days. Any new Control Person or Unit General Manager must attend and successfully complete...

  • Page 98
    ... other location we designate. In addition, we may develop and require you to purchase an inâˆ'restaurant training program. D. Staffing. You will employ a sufficient number of competent and trained employees to insure efficient service to your customers. You must require all your employees to work in...

  • Page 99
    ... Menu Items at the Restaurant. Any pointâˆ'ofâˆ'sale posters or other promotional materials used by you must be current and in good condition. To that end, we may make available at a reasonable cost to you annually or at other reasonable intervals, and when made available you must purchase, a sales...

  • Page 100
    ... all certificates, cards or checks from an approved supplier. We have developed a gift card program and require that you sign the Participation Agreement attached as Appendix E. At the time of termination or expiration, or the transfer of your rights under this Agreement, you must pay all amounts...

  • Page 101
    ... and submit reports as we periodically require, including but not limited to a monthly profit plan, monthly balance sheet and monthly statement of profit and loss, records of prices and special sales, check registers, purchase records, invoices, sales summaries and inventories, sales tax records and...

  • Page 102
    ... material cost items (iv) if requested by us to verify your Gross Sales, all such books and records as we may require under our audit policies published from time to time. You also must, at your expense, submit to us within 90 days after the end of each fiscal year a detailed balance sheet, profit...

  • Page 103
    ... (ix) Buffalo Wild Wings, Inc., Buffalo Wild Wings International, Inc. and affiliates as named additional insureds on all liability policies required by this subparagraph; (x) any other such insurance coverages or amounts as required by law or other agreement related to the Restaurant. The insurance...

  • Page 104
    ...casual or fast casual restaurant that sells or offers to dispense prepared food products the same as or similar to the type sold in BUFFALO WILD WINGS restaurants; (ii) a video entertainment oriented, casual or fast casual restaurant or bar business; or (iii) any business establishment that sells or...

  • Page 105
    ... sale), lease, pledge, management agreement, contract for deed, option agreement, assignment, bequest, gift or otherwise, or any arrangement pursuant to which you turn over all or part of the daily operation of the business to a person or entity who shares in the losses or profits of the business...

  • Page 106
    ... final close of the installment sale or the termination of such interest, as the case may be. 6. General Release. You, each Principal Owner and each guarantor must sign a general release of all claims arising out of or relating to this Agreement, your Restaurant or the parties' business relationship...

  • Page 107
    ... any other conditions that we reasonably require from time to time as part of our transfer policies, provided that such conditions will not be more stringent than any conditions otherwise imposed on new franchisees signing the then current franchise agreement. E. Death, Disability or Incapacity. If...

  • Page 108
    building, equipment, furniture and fixtures, and any leasehold interest used in the operation of your Restaurant. Unless otherwise agreed to in writing by us and you, the purchase price for our purchase of assets in the event of a transfer that occurs by a change in control or insolvency or ...

  • Page 109
    ..., you recognize that the Restaurant is one of a large number of restaurants and stores identified by the Trademarks and similarly situated and selling to the public similar products, and the failure on the part of a single franchisee to comply with the terms of its agreement could cause irreparable...

  • Page 110
    ... totaling 90 days over any 5 year period, the loss of your lease, the failure to timely cure a default under the lease, the loss of your right of possession or failure to reopen or relocate under subparagraph 5.D, the closing of the Restaurant by any state or local authorities for health or public...

  • Page 111
    ... a business appraiser appraise the Restaurant's other assets) selected with the consent of both parties, provided we give you written notice of our preliminary intent to exercise our purchase rights under this Paragraph within 30 days after the date of the expiration or termination of this Agreement...

  • Page 112
    ... menu or method of operation similar to that employed by our companyâˆ'owned or franchised restaurants. C. Claims. You and your Principal Owners and guarantors may not assert any claim or cause of action against us or our affiliates relating to this Agreement or the BUFFALO WILD WINGS business after...

  • Page 113
    ...writing and signed by the party serving the same and either delivered personally or by a reputable overnight service or deposited in the United States mail, service or postage prepaid and addressed as follows: 1. If intended for us, addressed to General Counsel, Buffalo Wild Wings International, Inc...

  • Page 114
    ... operate, administrate, develop, and change the System in any manner that is not specifically precluded by the provisions of this Agreement, although this right does not modify the requirements of subparagraph 5.E and other express limitations set forth in this Agreement. 3. Our Reasonable Business...

  • Page 115
    ...instances from your rights and obligations under this Agreement. O. Notice of Potential Profit. We and/or our affiliates may from time to time make available to you or require you to purchase goods, products and/or services for use in your Restaurant on the sale of which we and/or our affiliates may...

  • Page 116
    ...the preâˆ'opening conditions set forth in this Agreement. T. Acknowledgment of Prohibition on Insider Trading. Federal law and our parent company's policy prohibit purchasing or selling stock in Buffalo Wild Wings, Inc. ("BWW") by anyone in possession of material, nonâˆ'public information concerning...

  • Page 117
    IN WITNESS WHEREOF, on the dates written below. FRANCHISEE: the parties have executed this Franchise Agreement US: BUFFALO WILD WINGS INTERNATIONAL, INC. Date By:_____ Its:_____ By:_____ Its:_____ Date By: Sally J. Smith Its: President & CEO 35

  • Page 118
    ...FRANCHISE AGREEMENT In consideration of the execution of the Franchise Agreement (the "Agreement") between BUFFALO WILD WINGS INTERNATIONAL, INC. ("we" or "us") and (the "Franchisee"), dated , 2006 and for other good... Name _____ Address _____ City State Zip Code _____ Telephone 2 _____ Individually...

  • Page 119
    _____ Individually _____ Print Name _____ Address _____ City State Zip Code _____ Telephone 3 _____ Individually _____ Print Name _____ Address _____ City State Zip Code _____ Telephone

  • Page 120
    ... person, is your Unit General Manager: NAME TITLE ADDRESS 4. Change. You must immediately notify us in writing of any change in the information contained in this Addendum and, at our request, prepare and sign a new Addendum containing the correct information. 5. Effective Date. This Addendum is...

  • Page 121
    ... Date: Service Mark: Registration No.: Registration Date: Service Mark: Registration No.: Registration Date: Service Mark: Registration No.: Registration Date: Service Mark: Registration No.: Registration Date: BUFFALO WILD WINGS 2,239,550 April 13, 1999 BUFFALO WILD WINGS GRILL & BAR (Design...

  • Page 122
    ... and conditions of the Franchise Agreement, the Designated Area in which you will locate and operate the Restaurant is defined as follows The Designated Area is considered fixed as of the date of the Franchise Agreement. FRANCHISEE: FRANCHISOR: BUFFALO WILD WINGS INTERNATIONAL, INC. _____ By:_____...

  • Page 123
    ...operate a Restaurant at the Premises pursuant to Tenant's Franchise Agreement (the "Franchise Agreement") with Buffalo Wild Wings International, Inc. ("BWW") under the name "Buffalo Wild Wings Grill & Bar" or other name designated by BWW (the "Restaurant... its parent company, at any time during the ...

  • Page 124
    ..., postage prepaid, to the following address: Buffalo Wild Wings International, Inc. 1600 Utica Avenue South Suite 700 Minneapolis, MN 55416 Attention: General Counsel BWW may change its address for receiving notices by giving Landlord written notice of the new address. Landlord agrees that it will...

  • Page 125
    ...and all other items identifying the Premises as a Buffalo Wild Wings(R) Restaurant and to make such other modifications (such as repainting) as are reasonably necessary to protect the Buffalo Wild Wings(R) marks and system. In the event BWW exercises its option to purchase assets of Tenant, Landlord...

  • Page 126
    ...the Franchise Agreement ELECTRONIC TRANSFER OF FUNDS AUTHORIZATION Franchisee: Location: Date NEW CHANGE Attention: Bookkeeping Department The undersigned hereby authorizes Buffalo Wild Wings International, Inc., its parent company or any affiliated entity (collectively, "BWW"), to initiate weekly...

  • Page 127
    ... provided by SASH Management L.L.C. d.b.a. Gift Card Solutions, a Utah limited liability company ("GCS") to owners of franchises operated under an agreement with Buffalo Wild Wings, Inc., a Minnesota corporation, Blazin Wings, Inc., a Minnesota corporation, Buffalo Wild Wings International, Inc., an...

  • Page 128
    ... of the Agreement. Each Gift Card which is purchased as part of this program and which is not completely used on the date which is the later of one (1) year from the initial purchase of the Gift Card or one (1) year from the last time the customer added cash to the value of the Gift card shall be...

  • Page 129
    ... to allow Stored Value Systems to electronically debit and credit Franchisee's account. In the event Franchisee has insufficient funds to pay any amount due hereunder and such amount is collected from the insurance account referred to above or from Buffalo Wild Wings, Inc., the paying party shall...

  • Page 130
    ... Coâˆ'Tenants Map Daytime Employment Map Traffic Volumes Map Medium Household Income Map Mosaic Index Map Owner Occupied Units Map Population & Daytime Employment Map 3âˆ'5âˆ'7 Minute Drive Time Map Demographic Report Traffic Location Report Trade Area Rating Report HOW DO I GET STARTED? Once you...

  • Page 131
    ... of three (3) for a total of $1,200. |_| |_| Enclosed is a check for $1,200 made payable to geoVue, Inc. Please bill my credit card (Visa, MC or Amex) Card Number Expirations Date Full Name on Card City State Zip Telephone By signing below and using the geoVue Portal products, you agree, for...

  • Page 132
    ...conditions, you may not access or otherwise use the Products. You are responsible for obtaining and paying for the hardware, software, and Internet access required for you to use the Products. The Products are only to be used within the United States of America. You acknowledge that transmissions to...

  • Page 133
    ... BE LIABLE FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES THAT ARE DIRECTLY OR INDIRECTLY RELATED TO THE USE OF, OR THE INABILITY TO USE, THE CONTENT, MATERIALS AND FUNCTIONS IN THE PRODUCTS, INCLUDING WITHOUT LIMITATION LOSS OF REVENUE OR ANTICIPATED PROFITS OR LOST BUSINESS, EVEN IF SUCH...

  • Page 134
    ... not rely on the BUFFALO WILD WINGS Offering Circular that we provided to you in connection with the offer and purchase of your BUFFALO WILD WINGS Business. Although the statements in the Offering Circular do not become part of the Franchise Agreement, nothing in the Offering Circular may contradict...

  • Page 135
    ...TO BUFFALO WILD WINGS(R) FRANCHISE AGREEMENT FOR THE STATE OF MARYLAND This Addendum pertains to franchises sold in the State of Maryland and is for the purpose of complying with Maryland statutes and regulations. Notwithstanding anything which may be contained in the body of the Franchise Agreement...

  • Page 136
    ... Wild Wings International, Inc. ("BWW") and ("Franchisee") enter into this Release of Claims ("Agreement"). RECITALS A. BWW and Franchisee entered into a BUFFALO WILD WINGS(R) Franchise Agreement dated B. [NOTE: Describe the circumstances relating to the release.] C. Subject to and as addressed...

  • Page 137
    ... the event of a breach of this Agreement that requires one of the parties to enforce the terms and conditions of this Agreement, the nonâˆ'prevailing party shall pay the prevailing party's attorneys' fees and costs incurred by reason of the breach. Dated: _____,2006 BUFFALO WILD WINGS INTERNATIONAL...

  • Page 138
    ... the BUFFALO WILD WINGS mark, and you will cooperate with the defense in any reasonable manner prescribed by us with any direct cost of such cooperation to be borne by us. 2. Minnesota law provides franchisees with certain termination and nonrenewal rights. As of the date of this Franchise Agreement...

  • Page 139
    ...in the State of North Dakota. 5. Pursuant to Section 51âˆ'19âˆ'09 of the North Dakota Franchise Investment Law, a franchisee may not be required to sign a general release as a condition of renewal under Section 4.B of the Franchise Agreement. 6. Except as amended herein, the Franchise Agreement will...

  • Page 140
    ... TO BUFFALO WILD WINGS(R) FRANCHISE AGREEMENT FOR THE STATE OF WASHINGTON This Addendum pertains to franchises sold in the State of Washington and is for the purpose of complying with Washington statutes and regulations. Notwithstanding anything which may be contained in the body of the Franchise...

  • Page 141
    ... of the Franchise Agreement to the contrary, Section 13.B of the Agreement pertaining to "Termination by Us" is extended as follows: We will provide you at least 90 days' prior written notice of termination, cancellation, or substantial change in competitive circumstances. The notice will state all...

  • Page 142
    BUFFALO WILD WINGS(R) DEVELOPER INCENTIVE PACKAGE ADDENDUM TO FRANCHISE AGREEMENT This Addendum is appended to, and made a part of, the BUFFALO WILD WINGS Franchise Agreement, dated _____ (the "Agreement"), between BUFFALO WILD WINGS INTERNATIONAL, INC. ("we" or "us") and _____("you"). Capitalized ...

  • Page 143
    ...WILD WINGS location or business, or the likelihood of success at your franchised business? Check one: ( ) Yes ( ) No. If yes, please state in detail the oral, written or visual claim or representation Did any employee or other person speaking on behalf of Buffalo Wild Wings International, Inc. make...

  • Page 144
    ... products through alternative methods of distribution and to issue franchises or operate competing businesses for or at locations, as we determine, (i) outside of your Designated Area using any trademarks; (ii) inside your Designated Territory using any trademarks other than the BUFFALO WILD WINGS...

  • Page 145
    ... WILD WINGS location or business, or the likelihood of success at your franchised business? Check one:( ) Yes ( ) No. If yes, please state in detail the oral, written or visual claim or representation Did any employee or other person speaking on behalf of Buffalo Wild Wings International, Inc. make...

  • Page 146
    ... products through alternative methods of distribution and to issue franchises or operate competing businesses for or at locations, as we determine, (i) outside of your Designated Area using any trademarks; (ii) inside your Designated Territory using any trademarks other than the BUFFALO WILD WINGS...

  • Page 147
    ...WILD WINGS location or business, or the likelihood of success at your franchised business? Check one: ( ) Yes ( ) No. If yes, please state in detail the oral, written or visual claim or representation Did any employee or other person speaking on behalf of Buffalo Wild Wings International, Inc. make...

  • Page 148
    ... products through alternative methods of distribution and to issue franchises or operate competing businesses for or at locations, as we determine, (i) outside of your Designated Area using any trademarks; (ii) inside your Designated Territory using any trademarks other than the BUFFALO WILD WINGS...

  • Page 149
    EXHIBIT 10.12 Buffalo Wild Wings(R) Area Development Agreement Between Buffalo Wild Wings International, Inc. 1600 Utica Avenue, Suite 700 Minneapolis, MN 55416 And Effective Date: To be completed by Us)

  • Page 150
    ... RECITALS 2 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. DEFINITIONS...2 GRANT OF DEVELOPMENT RIGHTS...2 DEVELOPMENT FEE...2 DEVELOPMENT SCHEDULE...2 TERM2 YOUR DUTIES...2 DEFAULT AND TERMINATION...2 RIGHTS AND DUTIES OF PARTIES UPON TERMINATION OR EXPIRATION...2 TRANSFER...2 MISCELLANEOUS...2 PAGE...

  • Page 151
    ... of the Agreement also apply to your owners and will be noted. RECITALS A. Our parent company has developed a unique system for operating video entertainment oriented, fast casual restaurants that feature chicken wings, sandwiches, unique food service and other products, beverages and services using...

  • Page 152
    ...the BUFFALO WILD WINGS Trademark and Service Mark that have been registered in the United States and elsewhere and the trademarks, service marks and trade names set forth in each Franchise Agreement, as we may modify and change from time to time, and the trade dress and other commercial symbols used...

  • Page 153
    ... chain. Outside of the Development Territory, we and our affiliates have the right to grant other franchises or develop and operate company or affiliate owned BUFFALO WILD WINGS restaurants and offer, sell or distribute any products or services associated with the System (now or in the future...

  • Page 154
    ... Facility within your Development Territory. You acknowledge and agree that if you accept the Offer, we may require you to submit a full application, pay an initial fee and sign a new form of franchise agreement. E. This Agreement is not a Franchise Agreement and you have no right to use in any...

  • Page 155
    ... number of Restaurants to be open and continuously operating for business in the Development Territory. If you fail to either execute a Franchise Agreement or to open a Restaurant according to the dates set forth in the Franchise Agreement, we have the right to (i) require that you hire a franchise...

  • Page 156
    ... to the success of the Restaurant. 3. Your Submission of Information. You must furnish to us, at least 30 days prior to the earliest of (i) the date set forth in the Development Schedule by which you must execute a Franchise Agreement or (ii) the actual date in which the Franchise Agreement would be...

  • Page 157
    ... involve greater initial investment and operating capital requirements than those stated in the Uniform Franchise Offering Circular provided to you prior to the execution of this Agreement. You are obligated to execute all the Franchise Agreements and open all the Restaurants on the dates set forth...

  • Page 158
    ... federal, state and local laws, rules and regulations. D. If you at some time in the future desire to make either a public or a private offering of your securities, prior to such offering and sale, and prior to the public release of any statements, data, or other information of any kind relating to...

  • Page 159
    .... You will have no right to develop or operate any business for which a Franchise Agreement has not been executed by us. We will be entitled to develop and operate, or to franchise others to develop and operate, BUFFALO WILD WINGS restaurants in the Development Territory, except as may be otherwise...

  • Page 160
    ... of the business attributable to your operation of the Restaurant if you are in compliance with the terms and conditions of the Franchise Agreement for that Restaurant). The purchase price must be paid in cash at the closing of the purchase, which must take place no later than 90 days after your...

  • Page 161
    ... Agreements for Restaurants in the Development Territory. Accordingly, the assignment terms and conditions of the Franchise Agreements shall apply to any Transfer of your rights and interests under this Agreement. As used in this Agreement, the term "Transfer" means any sale, assignment, gift...

  • Page 162
    ... and protections that might be provided through the laws of any state relating to franchises or business opportunities, other than those of the state in which your first Restaurant is located. 2. Our Rights. Whenever this Agreement provides that we have a certain right, that right is absolute and...

  • Page 163
    ... at any time after the date of this Agreement becomes a Principal Owner must execute the form of undertaking and guarantee at the end of this Agreement. K. You and we are independent contractors. Neither party is the agent, legal representative, partner, subsidiary, joint venturer or employee of the...

  • Page 164
    ... time the violating party offers her/him employment. You agree that this amount is for the damages that the nonâˆ'violating party will suffer for the loss of the person hired away by the other party, including the costs of finding, hiring and training a new employee and for the loss of the services...

  • Page 165
    IN WITNESS WHEREOF, the parties have executed the foregoing Agreement as of the dates written below. DEVELOPER FRANCHISOR BUFFALO WILD WINGS INTERNATIONAL INC By: Sally J. Smith Its: President & CEO By Its By Its By Its 15

  • Page 166
    ... TERMS AND CONDITIONS OF THE AREA DEVELOPMENT AGREEMENT In consideration of the execution of the Area Development Agreement (the "Agreement") between BUFFALO WILD WINGS INTERNATIONAL, INC. ("we" or "us") and _____ (the "Developer"), dated _____, and for other good and valuable consideration, the...

  • Page 167
    Individually Print Name Individually Print Name Address Address City State Zip Code City State Zip Code Telephone 2 Telephone

  • Page 168
    APPENDIX A DESCRIPTION OF DEVELOPMENT TERRITORY DEVELOPER: FRANCHISOR BUFFALO WILD WINGS INTERNATIONAL INC By Its By Its By Its

  • Page 169
    ...Cumulative number of Date by Which the Restaurants Required to be Restaurant Must be Open and Continuously Opened and Continuously Operating for Business in the Date by Which Franchise Operating for Business Development Territory as of Restaurant Number Restaurant Type Agreement Must be Signed in...

  • Page 170
    ... the BUFFALO WILD WINGS Area Development Agreement, dated _____ (the "Development Agreement"), between BUFFALO WILD WINGS INTERNATIONAL, INC. ("we" or "us") and _____ ("you"). Capitalized terms not defined in this Addendum have the meanings given to them in the Development Agreement. In the event of...

  • Page 171
    ...time. We do not have any obligation to provide training and opening assistance for the fourth and subsequent Restaurants under the Development Agreement. All training must comply with our requirements and must be completed to our satisfaction. We shall have no liability in connection with or related...

  • Page 172
    ... upon if any future Restaurants open after the scheduled opening date. In the event the months in your bank fall to zero (0) or below zero (0) at any given time, the bank of months will be automatically eliminated altogether. 8. Press Release. We may hire, at our own cost, a public relations firm to...

  • Page 173
    ... on the BUFFALO WILD WINGS Offering Circular that we provided to you in connection with the offer and purchase of your BUFFALO WILD WINGS Business. Although the statements in the Offering Circular do not become part of the Area Development Agreement, nothing in the Offering Circular may contradict...

  • Page 174
    ADDENDUM TO BUFFALO WILD WINGS(R) AREA DEVELOPMENT AGREEMENT FOR THE STATE OF MARYLAND This Addendum pertains to franchises sold in the State of Maryland and is for the purpose of complying with Maryland statutes and regulations. Notwithstanding anything which may be contained in the body of the ...

  • Page 175
    ADDENDUM TO BUFFALO WILD WINGS(R) AREA DEVELOPMENT AGREEMENT FOR THE STATE OF MINNESOTA This Addendum pertains to franchises sold in the State of Minnesota and is for the purpose of complying with Minnesota statutes and regulations. Notwithstanding anything which may be contained in the body of the...

  • Page 176
    ADDENDUM TO BUFFALO WILD WINGS(R) AREA DEVELOPMENT AGREEMENT FOR THE STATE OF NORTH DAKOTA This Addendum pertains to franchises sold in the State of North Dakota and is for the purpose of complying with North Dakota statutes and regulations. Notwithstanding anything which may be contained in the ...

  • Page 177
    ADDENDUM TO BUFFALO WILD WINGS(R) AREA DEVELOPMENT AGREEMENT FOR THE STATE OF WASHINGTON This Addendum pertains to franchises sold in the State of Washington and is for the purpose of complying with Washington statutes and regulations. Notwithstanding anything which may be contained in the body of ...

  • Page 178
    ..., the Area Development construed and enforced in accordance with its terms. Agreement will be Each of the undersigned hereby acknowledges having read and understood this Addendum and consents to be bound by all of its terms. YOU By Its By Its WE: BUFFALO WILD WINGS INTERNATIONAL INC By: Sally...

  • Page 179
    ...the disclosures in the Offering Circular? Check one: ( ) Yes ( ) No. If yes, please state in detail the oral, written or visual claim or representation 6. Except as state in Item 19, did any employee or other person speaking on behalf of Buffalo Wild Wings International, Inc. make any oral, written...

  • Page 180
    ... products through alternative methods of distribution and to issue franchises or operate competing businesses for or at locations, as we determine, (i) outside of your Designated Area using any trademarks; (ii) inside your Development Territory using any trademarks other than the BUFFALO WILD WINGS...

  • Page 181
    ...the disclosures in the Offering Circular? Check one: ( ) Yes ( ) No. If yes, please state in detail the oral, written or visual claim or representation 6. Except as state in Item 19, did any employee or other person speaking on behalf of Buffalo Wild Wings International, Inc. make any oral, written...

  • Page 182
    ... products through alternative methods of distribution and to issue franchises or operate competing businesses for or at locations, as we determine, (i) outside of your Designated Area using any trademarks; (ii) inside your Development Territory using any trademarks other than the BUFFALO WILD WINGS...

  • Page 183
    ...the disclosures in the Offering Circular? Check one: ( ) Yes ( ) No. If yes, please state in detail the oral, written or visual claim or representation 6. Except as state in Item 19, did any employee or other person speaking on behalf of Buffalo Wild Wings International, Inc. make any oral, written...

  • Page 184
    ... products through alternative methods of distribution and to issue franchises or operate competing businesses for or at locations, as we determine, (i) outside of your Designated Area using any trademarks; (ii) inside your Development Territory using any trademarks other than the BUFFALO WILD WINGS...

  • Page 185
    ... Buffalo Wild Wings, Inc., a Minnesota corporation (the "Company"), and _____ ("Participant"). W I T N E S S E T H: WHEREAS, Participant on the date hereof is a key employee or officer of the Company or a Subsidiary of the Company; and WHEREAS, the Company wishes to grant a restricted stock unit...

  • Page 186
    ... such Vesting Date. 3. Issuance of Shares. On the date the Company files its 10âˆ'K for each fiscal year of the Award, the Company shall cause to be issued a stock certificate representing that number of shares of Common Stock which is equivalent to the percentage of restricted stock units for which...

  • Page 187
    ...this Notice to the contrary, in the event the Company makes any public offering of its securities and determines, in its sole discretion, that it is necessary to reduce the number of issued but unvested restricted stock units so as to comply with any state securities or Blue Sky law limitations with...

  • Page 188
    ... of its costs and fees, including the arbitrator's fees, administrative fees, travel expenses, outâˆ'ofâˆ'pocket expenses and reasonable attorneys' fees. Unless otherwise agreed by the parties, the place of any arbitration proceedings shall be Hennepin County, Minnesota. BUFFALO WILD WINGS, INC. By...

  • Page 189
    ... STOCK UNIT AWARD BUFFALO WILD WINGS, INC. 2003 EQUITY INCENTIVE PLAN THIS AWARD, made effective as of this __ day of ____ 2005, by and between Buffalo Wild Wings, Inc., a Minnesota corporation (the "Company"), and _____ ("Participant"). W I T N E S S E T H: WHEREAS, Participant on the date...

  • Page 190
    .... 3. Issuance of Shares. On the date the Company files its 10âˆ'K for each fiscal year of the Award, the Company shall cause to be issued a stock certificate representing that number of shares of Common Stock which is equivalent to the percentage of restricted stock units for which the risks of...

  • Page 191
    ...this Notice to the contrary, in the event the Company makes any public offering of its securities and determines, in its sole discretion, that it is necessary to reduce the number of issued but unvested restricted stock units so as to comply with any state securities or Blue Sky law limitations with...

  • Page 192
    ... of its costs and fees, including the arbitrator's fees, administrative fees, travel expenses, outâˆ'ofâˆ'pocket expenses and reasonable attorneys' fees. Unless otherwise agreed by the parties, the place of any arbitration proceedings shall be Hennepin County, Minnesota. BUFFALO WILD WINGS, INC. By...

  • Page 193
    ... quarterly $20,000 in value 1,000 shares *Annual grant of restricted stock units to be granted as of the first day of each fiscal year, with the number of units to be granted determined by dividing $20,000 by the fiscal yearâˆ'end stock price. These units vest to the extent of 33âˆ'1/3% on the...

  • Page 194
    ... are set annually by our Board of Directors. Payments under the bonus plan that are based on the achievement of the following financial objectives: revenue, net income, same store sales increases, increase in systemâˆ'wide locations, and retention/turnover percentage. The Chief Executive Officer and...

  • Page 195
    ... ARRANGEMENTS FOR EXECUTIVE OFFICERS FOR FISCAL YEAR 2006 The Buffalo Wild Wings, Inc. Board of Directors, based on recommendations from the Compensation Committee, set the 2006 fiscal year base salaries and restricted stock unit grants for the executive officers and determined the amount...

  • Page 196
    ... for each of the fiscal years in the threeâˆ'year period ended December 25, 2005 and the related consolidated statement schedule, management's assessment of the effectiveness of internal control over financial reporting as of December 25, 2005 and the effectiveness of internal control over financial...

  • Page 197
    ... that: 1. I have reviewed this report on Form 10âˆ'K for fiscal year ended December 25, 2005 of Buffalo Wild Wings, Inc.; 2 Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of...

  • Page 198
    ... that: 1. I have reviewed this report on Form 10âˆ'K for fiscal year ended December 25, 2005 of Buffalo Wild Wings, Inc.; 2 Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of...

  • Page 199
    ... 2002 In connection with the Annual Report of Buffalo Wild Wings, Inc. (the "company") on Form 10âˆ'K for the year ended December 25, 2005 as filed with the Securities and Exchange Commission (the "Report"), I, Sally J. Smith, Chief Executive Officer of the company, certify, pursuant to 18 U.S.C. ss...

  • Page 200
    ... 2002 In connection with the Annual Report of Buffalo Wild Wings, Inc. (the "company") on Form 10âˆ'K for the year ended December 25, 2005 as filed with the Securities and Exchange Commission (the "Report"), I, Mary J. Twinem, Chief Financial Officer of the company, certify, pursuant to 18 U.S.C. ss...