What is the effect of an attachment to the Chop5 Salad Kitchen franchise agreement?

TABLE OF CONTENTS

ATTACHMENTS

ATTACHMENT "A" Deal Terms

AREA DEVELOPMENT AGREEMENT

This Area Development Agreement (this "Agreement") is entered into as of, 202 (the "Effective Date") between CHOP5 Franchise LLC, a Kentucky limited liability company ("we" or "us") and , a(n) ("you").

• 1. DEFINITIONS. Capitalized terms used in this Agreement shall have the meanings given to them below, or if not defined below, the meanings given to them in the Initial Franchise Agreement.
  • "Developer Entity" means the Entity that: (a) signs this Agreement as the area developer (if this Agreement is signed by an Entity); or (b) assumes this Agreement subsequent to its execution by the original Owners.
  • "Development Business" means the franchised business you conduct pursuant to this Agreement consisting of developing and opening Restaurants within the Development Territory.
  • "Development Schedule" means the schedule described in §4.1 and Part D of ATTACHMENT "A" for the development of the Restaurants within the Development Territory.
  • "Development Territory" means the geographic area described in Part C of ATTACHMENT "A".
  • "Dispute" means any Claim, dispute or disagreement between the parties, including any matter pertaining to: (a) the interpretation or enforcement of this Agreement; (b) the offer or sale of the area development rights; or (c) the relationship between the parties.
  • "Franchise Agreement" means a CHOP5 Salad Kitchen Franchise Agreement executed by us and you (or your affiliate) for the development and operation of a Restaurant pursuant to this Agreement.
  • "General Release" means our then-current form of Waiver and Release of Claims that you and your Owners must sign pursuant to §8.2 in connection with a Transfer.
  • "Initial Franchise Agreement" means the Franchise Agreement you execute for the first Restaurant to be developed pursuant to this Agreement.
  • "Minority Interest Transfer" means a Transfer by an Owner of less than 20% of the Equity Interests in the Developer Entity other than a Transfer that results in the Operating Partner owning less than 5% of the Equity Interests in the Developer Entity.
  • "Owner" means a Person who meets any of the following criteria: (a) the Person directly signs this Agreement as the area developer, either alone or in conjunction with one or more other Persons; (b) the Person directly or indirectly through one or more intermediaries owns any Equity Interest in the Developer Entity (if the area developer under this Agreement is an Entity); (c) the Person directly signs a Franchise Agreement as the franchisee, either alone or in conjunction with one or more other Persons; and/or (d) the Person directly or indirectly through one or more intermediaries owns any Equity Interest in any affiliate of yours that executes a Franchise Agreement as authorized by §6.
  • "Permitted Transfer" means: (a) a Transfer from one Owner to another Owner who was an approved Owner prior to such Transfer, other than a Transfer that results in the Operating Partner owning less than 5% of the ownership interests in the Development Business or Developer Entity, as applicable; and/or (b) a Transfer by the Owners to a newly established Developer Entity for which such Owners collectively own and control 100% of the Equity Interests.
  • "Term" means the period of time beginning on the Effective Date of this Agreement and expiring on the earlier to occur of: (a) the opening date listed in the Development Schedule for the last Restaurant you are required to open; or (b) the date this Agreement is effectively terminated.
  • "Transfer" means any direct or indirect, voluntary or involuntary, assignment, sale, conveyance, subdivision, sublicense or other transfer or disposition of:
    • (a) this Agreement (or any interest therein);
    • (b) the area development rights granted by this Agreement (or any interest therein);

• (c) the Development Business you conduct pursuant to this Agreement (or any interest therein);
• (d) the right to manage a Restaurant or occupy the Restaurant's premises; or
• (e) an Equity Interest in the Developer Entity, including public and private offerings;

including by: merger or consolidation; judicial award, order or decree; issuance of additional Equity Interests in the Developer Entity; foreclosure of a security interest by a lender; or operation of Law, will or a trust upon the death of an Owner of the Developer Entity, including the Laws of intestate succession.

• 2. GRANT OF DEVELOPMENT RIGHTS. Subject to the terms of this Agreement, we hereby grant you the right and obligation to develop, open and operate each of the Restaurants referred to in the Development Schedule. Each Restaurant must be located within the Development Territory. This Agreement does not grant you any right or license to use our Intellectual Property.
• 3. TERRITORIAL PROTECTIONS AND LIMITATIONS. During the Term we will not develop or operate, or license a third party to develop or operate, a Restaurant that is physically located within the Development Territory other than: (a) any Restaurant that is operating, under development, or for which a franchise agreement has been executed, in each case as of the Effective Date, and that is (or will be) located within the Development Territory; and (b) any Restaurant otherwise permitted by this Section.

Source: Item 23 — RECEIPT (FDD pages 50–178)