Buffalo Wild Wings 2005 Annual Report Download - page 128

2. There will be a transaction fee for each transaction which is
performed with respect to a Gift Card issued as part of the program.
The transaction fee shall be $.16 per transaction, and shall be
charged for each transaction performed by the Franchisee. The
cumulative amount of the transaction fees for a particular month
shall be paid as part of the payment to be made pursuant to the
terms of this Agreement. A "transaction" shall be defined as the
initial activation of a Gift Card and each respective use of a Gift
Card for the purchase of product from a participating store. In
addition, a transaction shall include the payment of any inactivity
fee which is debited against a Gift Card.
3. In addition to the transaction fee, a fee of $.04 per transaction
will be charged, and this amount will be added to an insurance
account established for the payment of delinquent franchise
payments. The insurance account which these fees are added to shall
be owned by Franchisor, and all amounts paid to this account shall
be under the control of Franchisor. The cumulative amount of the
insurance account fees for a particular month shall be paid as part
of the payment to be made pursuant to the terms of the Agreement.
4. 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 assessed a fee of $2.00 on such date which shall be debited
against the remaining value of the Gift Card. This fee shall be
applied thereafter for each additional month until the earlier of
the customer adding additional cash to the Gift Card or until the
remaining balance of the Gift Card is $0.00. The $2.00 inactivity
fee shall be credited to the Franchisee if the Gift Card was
purchased at a Franchisee's store.
5. GCS may modify any of the aforementioned fees, except the insurance
account fee, to cover any cost increases incurred by GCS when
material cost increases are sustained from non−related third party
vendors that provide support services to GCS. These price changes
can only take place once in each contract year upon sixty (60) days'
prior written notice to the Franchisee. GCS will not have the power
to modify the insurance account fee, but this fee may be modified by
Franchisor, provided the fee may not be greater than $.04 per
transaction.
6. GCS will maintain and provide monthly reports of the amounts due
from the Franchisee. The Franchisee's account shall be debited with
an amount equal to the value of all Gift Cards sold at the
Franchisee's stores and all fees which are due from a Franchisee as
set forth in this Agreement. The Franchisee's account will be
credited with an amount equal to the value of all product purchased
from the Franchisee's store using a Gift Card and all inactivity
fees which are attributed to the Franchisee. The resulting
difference as of the last day of each month will be the monthly
amount which is due to or from the Franchisee. This amount will be
collected from or paid to a participant as set forth below.
7. GCS shall be solely responsible for the accuracy of all account
management with regard to the Gift Cards. Any error in the account
management shall be the sole liability of GCS and GCS shall bear the
cost of any such error. By way of example and not limitation, if a
$10.00 Gift Card is sold and entered into the terminal for $10.00
and GCS accounts for the Gift Card at $100.00, GCS shall be solely
responsible for the $90.00 discrepancy.
Franchisee is responsible for providing an electronic card issuing
terminal that is compatible with and can interface with the GCS system to be
used for this Program. GCS will assist Franchisee by programming Franchisee's
individual terminal for a fee of $150.00. GCS will maintain adequate
communication lines for both Franchisee's issuing terminal and verification
terminal. A Verifone Terminal package may be purchased from GCS for Two Hundred
Twenty Five Dollars ($225.00). This amount shall be due with the first monthly
payment, as described above.
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