Buffalo Wild Wings 2005 Annual Report Download - page 153

final Franchise Agreement under the Development Schedule, you must have an
Authorized Location for your final Restaurant.
D. The rights granted under this Agreement are limited to the right
to develop and operate Restaurants located in the Development Territory,
and do not include (i) any right to sell products and Menu Items identified
by the Trademarks at any location or through any other channels or methods
of distribution, including the internet (or any other existing or future
form of electronic commerce), other than at Restaurants within the
Development Territory, (ii) any right to sell products and Menu Items
identified by the Trademarks to any person or entity for resale or further
distribution, or (iii) any right to exclude, control or impose conditions
on our development or operation of franchised, company or affiliate owned
restaurants at any time or at any location outside of the Development
Territory. You may not use any the words BUFFALO, WILD or WINGS or any of
the other Trademarks as part of the name of your corporation, partnership,
limited liability company or other similar entity.
You acknowledge and agree that we and our affiliates have the right to
operate and franchise others the right to operate restaurants or any other
business within and outside the Development Territory under trademarks
other than the BUFFALO WILD WINGS Trademarks, without compensation to any
franchisee, except that our operation of, or association or affiliation
with, restaurants (through franchising or otherwise) in the Development
Territory that compete with BUFFALO WILD WINGS restaurants in the video
entertainment oriented, fast casual restaurant segment will only occur
through some form of merger or acquisition with an existing restaurant
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)
under the Trademarks or any other trademarks, service marks or trade names
or through any distribution channel or method, all without compensation to
any franchisee.
We and our affiliates have the right to offer, sell or distribute,
within and outside the Development Territory, any frozen, pre−packaged
items or other products or services associated with the System (now or in
the future) or identified by the Trademarks, or any other trademarks,
service marks or trade names, except for Prohibited Items (as defined
below), through any distribution channels or methods, without compensation
to any franchisee. The distribution channels or methods include, without
limitation, grocery stores, club stores, convenience stores, wholesale,
hospitals, clinics, health care facilities, business or industry locations
(e.g. manufacturing site, office building), military installations,
military commissaries or the internet (or any other existing or future form
of electronic commerce). The Prohibited Items are the following items that
we will not sell in the Development Territory through other distribution
channels or methods: any retail food service Menu Items that are cooked or
prepared to be served to the end user or customer for consumption at the
retail location (unless sold at the limited seating facilities referenced
in subparagraph (i) of the paragraph above). For example, chicken wings
cooked and served to customers at a grocery store or convenience store
would be a Prohibited Item, but the sale of frozen or pre−packaged chicken
wings at a grocery store or convenience store would be a permitted form of
distribution in the Development Territory.
You acknowledge and agree that certain locations within the
Development Territory are by their nature unique and separate in character
from sites generally developed as BUFFALO WILD WINGS restaurants. As a
result, you agree that the following locations ("Special Sites") are
excluded from the Development Territory and we have the right, subject to
our then−current Special Sites Impact Policy, to develop or franchise such
locations: (1) military bases; (2) public transportation facilities; (3)
sports facilities, including race tracks; (4) student unions or other
3