Buffalo Wild Wings 2005 Annual Report Download - page 85

B. Designated Area. You must locate and operate the Restaurant at an
Authorized Location within the area described in Appendix B (the
"Designated Area"). We and our affiliates will not locate and
operate or grant to anyone else a franchise to locate and operate a
BUFFALO WILD WINGS restaurant within the Designated Area so long as
this Agreement is in effect, except as provided in subparagraph 2.D.
You do not have any right to sublicense or subfranchise within or
outside of the Designated Area and do not have the right to operate
more than one Restaurant within the Designated Area.
C. Opening. You agree that the Restaurant will be open and operating
in accordance with the requirements of subparagraph 5.A within (i)
270 days from the date of this Agreement if the Restaurant is
located within an end cap, shopping mall, Special Site or other
similar location, or (ii) 365 days from the date of this Agreement
if the Restaurant is a free−standing building, unless in either case
we authorize in writing an extension of time. Notwithstanding the
foregoing, if you are entering this Agreement pursuant to an Area
Development Agreement executed between you and us, you agree to open
the Restaurant by the date stated in the Area Development Agreement.
If you fail to have your Restaurant open and in operation according
to the provisions of this subparagraph 2.C, we will have the right
to terminate this Agreement without opportunity to cure pursuant to
subparagraph 13.B.2.
D. Nonexclusivity; Our Reservation of Rights. The license is limited
to the right to develop and operate one Restaurant at the Authorized
Location located in the Designated Area, and does not include (i)
any right to sell products and Menu Items identified by the
Trademarks at any location other than the Authorized Location,
except for authorized catering and delivery services as noted in
subparagraph 2.E, or through any other channels or methods of
distribution, including the internet (or any other existing or
future form of electronic commerce), (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 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 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 Designated Area 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 Designated Area 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 (except as otherwise provided for in this
subparagraph). Outside of the Designated Area, 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 Designated Area, 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 Designated Area through other
distribution channels or methods: any retail food service Menu Items that are
3