Buffalo Wild Wings 2005 Annual Report Download - page 170

BUFFALO WILD WINGS(R)
DEVELOPER INCENTIVE PACKAGE ADDENDUM
This Addendum is appended to, and made a part of, 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 any
conflict between the terms of this Addendum and those in the Development
Agreement, the terms of this Addendum will control.
The Development Agreement is hereby amended as follows:
1. Development Fee. The Development Fee will be $_____________. There will be
no Initial Franchise Fee charged for the Restaurants you develop under this
Addendum.
2. Waiver of Royalty Fee. Subject to the terms and conditions of this Addendum
and of the Development Agreement, if all your Restaurants are opened on or
before the dates set forth in the Development Schedule, for each Restaurant
you open on time in accordance with the Development Schedule, we will waive
the "Royalty Fees" (as defined in section 9.B of our standard Franchise
Agreement in effect as of the date hereof) that would otherwise be due
under the Franchise Agreement, for the first 52 weeks of operation for each
Restaurant. If you fail to open a Restaurant on time, the waiver of the
Royalty Fee for that Restaurant and for all Restaurants open thereafter
will be forfeited and you will be obligated to pay the Royalty Fees
pursuant to the terms set forth in the Franchise Agreement for each
Restaurant. Further, if you default under the Franchise Agreement for a
Restaurant within the first 52 weeks of operation for any reason
whatsoever, you must pay the Royalty Fee for that Restaurant from the date
we issue you written notice of default, even though you may subsequently
cure the default.
3. Additional Term. If you fully comply with the Development Schedule during
the initial term of the Development Agreement, we will extend the term of
the Development Agreement for months commencing on the date the franchise
agreement for your Restaurant is executed (the "Bonus Term"), provided,
however, that the Bonus Term may be terminated early pursuant to Section 7
of the Development Agreement. During the Bonus Term, you will have the
option to develop and operate as many additional Restaurants within the
Development Territory as you choose, subject to the terms and conditions of
the Development Agreement and this Addendum. All additional Restaurants for
which you exercise your option must be open prior to the expiration of the
Bonus Term. We will not charge you an Initial Franchise Fee for these
additional Restaurants; however, you must pay the Royalty Fee for each
Restaurant from the date of opening.
4. Development and Training Staff. Within 4 months after the date of this
Addendum, you must employ and maintain for the remaining term of this
Addendum a full−time development executive, who satisfactorily meets our
development executive requirements. Your development executive will be
responsible to supervise the development process for your Restaurants. To
qualify for the position, your development executive must, at a minimum,
have prior experience in developing a similar number of restaurants or
lodging facilities over a similar development period. Prior to hiring the
development executive, you must obtain our written approval. We reserve the
right to revoke our prior approval of your development executive at any
time. In addition, you must replace your development executive if he is
unable to perform the functions necessary to satisfy your obligations under
this Addendum and the Development Agreement. Furthermore, in the event that
you fail to open (i) one of your Restaurants on or before the date set
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