What does Chicken Guy provide to the franchisee regarding the restaurant's design and construction?

ncidental expenses incurred by Franchisee and its employees while attending development training and optional development training.

B. Restaurant Development.

• (1) Franchisee assumes all cost, liability and expense for developing, constructing and equipping the Franchised Restaurant. Chicken Guy will furnish to Franchisee prototypical plans and specifications for a Chicken Guy! Restaurant, including requirements for dimensions, design, image, interior layout, décor, fixtures, equipment, signs, furnishings, storefront and color scheme. Chicken Guy reserves the right to require Franchisee to engage the services of an architect that has been approved by Chicken Guy. It shall be Franchisee's responsibility to have the approved architect prepare all required construction plans and specifications to suit the shape and dimensions of the Franchised Location, and Franchisee must ensure that these plans and specifications comply with applicable ordinances, building codes and permit requirements and with lease requirements and restrictions. Franchisee shall use only registered architects, registered engineers, and professional and licensed contractors.
• (2) Franchisee shall submit proposed construction plans, specifications and drawings for the Franchised Restaurant ("Plans") to Chicken Guy and shall, upon Chicken Guy's request, submit all revised or "as built" Plans during the course of such construction. Chicken Guy will approve or refuse to approve the Plans and notify Franchisee within 14 days after Chicken Guy receives the Plans. (Chicken Guy's approval shall not be unreasonably withheld.) Once Chicken Guy has approved the Plans, no substantial change shall be made to the Plans without the prior approval of Chicken Guy, which shall not be unreasonably withheld. If, in the course of construction, any such change in the Plans is contemplated, Chicken Guy's approval must first be obtained before proceeding. Chicken Guy shall approve or reject Plan changes within 10 business days after receipt. If Chicken Guy does not respond within that time period, Chicken Guy shall be deemed to have rejected approval of the Plans.
• (3) Franchisee is prohibited from beginning site preparation or construction prior to receiving written notification from Chicken Guy that Chicken Guy has approved the Plans. All construction must be in accordance with Plans approved by Chicken Guy and must comply in all respects with applicable laws, ordinances and local rules and regulations. The Franchised Restaurant may not open if construction has not been performed in substantial compliance with Plans approved by Chicken Guy, and this Agreement may be terminated if such non-compliance is not cured within a commercially reasonable amount of time. Chicken Guy may, in its sole discretion, furnish guidance to Franchisee in developing the Franchised Restaurant and may periodically inspect the premises during its development.

C. Construction.

• (1) Prior to the commencement of construction, Franchisee shall have provided Chicken Guy a copy of the fully-executed lease for the Franchised Location or, if Franchisee owns the Franchised Location, proof of Franchisee's ownership interest. Franchisee must obtain Chicken Guy's approval of and retain the services of a project manager as set forth in the Manual to manage the due diligence, design, bidding and construction processes for the Franchised Restaurant. Chicken Guy reserves the right to require Franchisee to use a general contractor approved by Chicken Guy as set forth in the Manual. As used in this Agreement, construction shall have commenced only after Franchisee has obtained all required permits and: (a) with respect to a free-standing Restaurant, Franchisee has begun the installation of building footings with the intent to maintain continuous construction thereafter; or (b) with respect to a non-free-standing Restaurant or a Restaurant being converted from a prior use, Franchisee has begun the installation of sub-floor plumbing with the intent to maintain continuous construction thereafter.
• (2) Once construction has commenced, it shall continue uninterrupted except for interruption by reason of events constituting Force Majeure until completed. Force Majeure means any act of God, strike, lock-out or other industrial disturbance, war (declared or undeclared), riot, epidemic, fire or other catastrophe, act of any government or other third party and any other cause not within the control of the party affected thereby. If events constituting Force Majeure cause a delay in the commencement of construction of the Franchised Restaurant, Chicken Guy shall proportionately extend the Opening Deadline (as defined below) for the Franchised Restaurant. Notwithstanding the occurrence of any events, except events constituting Force Majeure, construction shall be completed, and the Franchised Restaurant shall be furnished, equipped and shall otherwise be ready to open for business in accordance with this Agreement not later than the date specified in the attached Data Sheet ("Opening Deadline").
• (3) Franchisee agrees, at its sole expense, to do, or cause to be done, the following, by the Opening Deadline:
• (a) Obtain and maintain all required building, utility, sign, health, sanitation, business and other permits and licenses applicable to the Franchised Restaurant.
• (b) Construct all required improvements to the Franchised Location and decorate the exterior and interior of the Franchised Restaurant in compliance with the Plans approved by Chicken Guy.
• (c) Purchase or lease and install all specified and required fixtures, equipment, furnishings and interior and exterior signs required for the Franchised Restaurant.
• (d) Purchase an opening inventory for the Franchised Restaurant of only authorized and approved products and other materials and supplies.

D. Acquisition of Necessary Furnishings, Fixtures and Equipment.

(1) Franchisee agrees to use in the development and operation of the Franchised Restaurant only the fixtures, furnishings, equipment and signs that Chicken Guy has approved for Chicken Guy! Restaurants as meeting its specifications and standards for quality, design, appearance, function and performance. Franchisee further agrees to place or display at the Franchised Restaurant (interior and exterior) only those signs, emblems, lettering, logos and display materials that Chicken Guy approves in writing from time to time.

• (2) Franchisee shall purchase or lease approved brands, types or models of fixtures, furnishings, equipment and signs only from suppliers designated or approved by Chicken Guy, which may include Chicken Guy. If Franchisee proposes to purchase, lease or otherwise use any fixtures, furnishings, equipment or signs which have not been approved by Chicken Guy, Franchisee shall first notify Chicken Guy in writing and shall, at its sole expense, submit to Chicken Guy upon its request sufficient specifications, photographs, drawings and/or other information or samples for a determination as to whether those fixtures, furnishings, equipment and/or signs comply with Chicken Guy's specifications and standards. Chicken Guy will, in its sole discretion, approve or disapprove the items and notify Franchisee within 30 days after Chicken Guy receives the request.
• (3) If Franchisee builds any portion of the Franchised Restaurant outside of Chicken Guy's specifications without receiving Chicken Guy's prior written consent, Chicken Guy shall have the right to delay the opening of the Franchised Restaurant until Franchisee, at its sole expense, brings the Franchised Restaurant's development within full compliance of Chicken Guy's specifications.
• E. Inspection, Cooperation. During the course of construction and/or renovation, Franchisee shall (and shall cause Franchisee's architect, project manager, engineer, general contractor and subcontractors to) cooperate fully with Chicken Guy and its designees for the purpose of permitting Chicken Guy and its designees to inspect the Franchised Location and the course of construction of the Franchised Restaurant in order to determine whether construction is proceeding according to the Plans. Without limiting the generality of the foregoing, Franchisee and Franchisee's architect, project manager, engineer, general contractor and subcontractors shall: (1) supply Chicken Guy or its designees with samples of construction materials, test borings, corings, due diligence environmental studies, supplies, equipment and other material and reports, if any such tests, studies or reports indicate there may be material problems or as Chicken Guy or its designees may request; and (2) afford Chicken Guy's representatives and its designees access to the Franchised Location and to the construction work in order to permit Chicken Guy and its designees to carry out their inspections.
• F. Reports. If requested by Chicken Guy, Franchisee shall submit to Chicken Guy, on or before the first day of each month (or more frequently if Chicken Guy requests), a report with photographs showing progress made in connection with the construction and equipping of the Franchised Restaurant.
• G. Limitation of Chicken Guy's Liability. Notwithstanding the right of Chicken Guy to recommend and approve the Plans, architects, project managers and general contractors and to inspect the construction work at the Franchised Restaurant, Chicken Guy and its designees shall have no liability or obligation with respect to the Franchised Location, the design or construction of the Franchised Restaurant or the furnishings, fixtures and equipment to be acquired; Chicken Guy's rights being exercised solely for the purpose of ensuring compliance with the terms and conditions of this Agreement.
• H. Final Inspection and Opening. Franchisee shall notify Chicken Guy in writing at least 30 days prior to the date Franchisee expects construction and/or renovation to be completed and a certificate of occupancy to be issued. If requested by Chicken Guy, Franchisee shall submit a copy of the certificate of occupancy to Chicken Guy. Chicken Guy reserves the right, after receiving Franchisee's notice, to conduct a final inspection of the Franchised Restaurant and its premises to determine if Franchisee has complied with this Agreement. Chicken Guy shall not be liable for delays or loss occasioned by its inability to complete its investigation and to make a determination within this period. Franchisee shall not open the Franchised Restaurant for business without Chicken Guy's express written authorization, which will not be granted unless Franchisee has satisfied the conditions contained in Section 6.

6. OPENING OF THE FRANCHISED RESTAURANT

• A. Right to Open the Franchised Restaurant. Except for a conditional opening pursuant to Section 6.B., Chicken Guy will not authorize the opening of the Franchised Restaurant unless all the following conditions have been met:
• (1) Franchisee is not in material default under this Agreement or any other agreements with Chicken Guy; Franchisee is not in default beyond the applicable cure period under any real estate lease, equipment lease or financing instrument relating to the Franchised Restaurant; Franchisee is not in default beyond the applicable cure period with any vendor or supplier to the Franchised Restaurant; and for the previous 6 months, Franchisee has not been in default beyond the applicable cure period under any agreement with Chicken Guy.
• (2) Franchisee is current on all obligations due Chicken Guy and Franchisee has signed all documents required by Chicken Guy to participate in Chicken Guy's electronic funds transfer program.
• (3) Chicken Guy is satisfied that the Franchised Restaurant was constructed and/or renovated substantially in accordance with the Plans approved by Chicken Guy and state and local codes.
• (4) If the Franchised Location is leased, Chicken Guy has received a copy of the fully-executed lease.
• (5) Franchisee, to the extent approval for the sale of alcoholic beverages has been obtained from Chicken Guy, has obtained a liquor license authorizing the sale of alcoholic beverages at the Franchised Restaurant.
• (6) Franchisee has obtained a certificate of occupancy and any other required health, safety or fire department certificates.
• (7) Franchisee has certified to Chicken Guy in writing that the installation of all items of furnishings, fixtures, equipment, signs, computer terminals and related equipment, supplies and other items has been accomplished.
• (8) An adequate number of Franchisee's managers as determined by Chicken Guy in its sole discretion have attended, successfully completed and become "certified" in the initial manager training program, and an adequate number of Franchisee's employees as determined by Chicken Guy in its sole discretion have attended and successfully completed Team Member Training (as defined in Section 12).
• (9) Chicken Guy has determined that the Franchised Restaurant has been constructed and/or renovated and equipped substantially in accordance with the requirements of this Agreement and that Franchisee has hired and trained a staff in accordance with the requirements of this Agreement.
• (10) Chicken Guy has been furnished with copies of all insurance policies required by Section 16 or such other evidence of insurance coverage and payment of premiums as Chicken Guy reasonably may request.
• B. Conditional Opening. Chicken Guy may conditionally authorize Franchisee to open and operate the Franchised Location as a Franchised Restaurant, even though Franchisee has not fully complied with the terms of this Agreement, if Franchisee agrees to fulfill all remaining terms of this Agreement on

or before the Opening Deadline. Chicken Guy's determination as to whether to authorize a conditional opening shall be final and binding and shall be made in its sole discretion based upon those factors that Chicken Guy deems relevant, including its determination that a conditional opening will not be injurious to the reputation of the System. If Franchisee fails to fulfill all remaining terms of this Agreement on or before the Opening Deadline (or such extension thereof as may be granted by Chicken Guy in its sole discretion), this Agreement shall terminate without further action by Chicken Guy, and Franchisee shall take such steps as are required by Section 23.

7. FEES

• A. Initial Franchise Fee. Simultaneously with the execution of this Agreement, Franchisee shall pay an initial franchise fee to Chicken Guy in the amount set forth on the attached Data Sheet ("Initial Franchise Fee"). Franchisee acknowledges and agrees that the Initial Franchise Fee is fully earned by Chicken Guy when paid and is not refundable. Any Development Fees previously paid by Franchisee to Chicken Guy with respect to the Franchised Restaurant shall be credited against the Initial Franchise Fee.
• B. Royalty Fee. In addition to all other amounts to be paid by Franchisee to Chicken Guy, Franchisee shall pay Chicken Guy a nonrefundable and continuing royalty fee in the amount specified in the attached Data Sheet, which shall be a percentage of Gross Sales (as defined below) of the Franchised Restaurant, for the right to use the System and the Proprietary Marks at the Franchised Location. If, due to federal, state or local laws, Chicken Guy is prohibited from receiving a percentage royalty based on alcoholic beverage revenues, Franchisee shall pay Chicken Guy a royalty fee on all Gross Sales except alcoholic beverage revenues in the same dollar amount as would have been paid if Franchisee paid the specified royalty fee percentage on all Gross Sales. If any taxes, fees or assessments are imposed on Chicken Guy by reason of its acting as franchisor or licensing the Proprietary Marks under this Agreement, Franchisee shall reimburse Chicken Guy for the amount of those taxes, fees or assessments within 30 days after receipt of an invoice from Chicken Guy.
• C. Advertising Fees. Franchisee also shall spend and/or contribute for advertising. The exact amount of the advertising fees to be spent and/or contributed by Franchisee, and the allocation of the advertising fees, as of the date of this Agreement, is set forth in Section 9 and the attached Data Sheet.
• **D.

Source: Item 22 — CONTRACTS (FDD page 50)