Is the execution of a Franchise Agreement a development obligation for Golden Corral?

of the development fee for each restaurant shall be credited toward the initial franchise fee payable at the time each Franchise Agreement is executed pursuant to the Development Schedule, which initial franchise fee payment credit shall be fully earned when credited and non-refundable.

3. DEVELOPMENT OBLIGATIONS

• 3.1. Execution of Franchise Agreement: Area Developer shall execute the then current form of Franchise Agreement for each Restaurant site approved by Franchisor in the Development Area as hereinafter provided. The Franchise Agreement for each Restaurant developed hereunder shall be the then current form of Franchise Agreement and the amendment(s) thereto, if any, being offered generally by Franchisor for such restaurant design at the time each such Franchise Agreement is executed. The current form of Franchise Agreement being offered by Franchisor as of the date hereof is the Franchise Agreement attached hereto as Exhibit B. The Franchise Agreement for each Restaurant shall be executed by Area Developer and submitted to Franchisor within fifteen (15) days of receipt of the applicable Franchise Agreement.
• 3.2. Site Selection and Management Orientation: Prior to Area Developer's acquisition by lease or purchase of any site for a Restaurant but within ninety (90) days after the execution of this Agreement, Area Developer shall complete and submit to Franchisor, in form(s) as may be specified by Franchisor, a feasibility study regarding Area Developer's proposed costs of development, construction and operation of a Golden Corral restaurant on the Proposed Site, the description of the proposed site and such information or materials as Franchisor may reasonably require, together with a letter of intent or other evidence satisfactory to Franchisor which confirms Area Developer's favorable prospects for obtaining the site. Franchisor shall have up to sixty (60) days after receipt of the feasibility study, the description of the proposed site and other information and materials to approve or disapprove, in its sole discretion, each proposed site for a Restaurant. Notwithstanding anything contained in this Development Agreement to the contrary, Area Developer must acquire by lease or purchase a location approved by Franchisor at the earlier of one hundred eighty (180) days after the execution of this Agreement or six (6) months before the scheduled opening date of the first Restaurant as set forth in the Development Schedule, and

thereafter must acquire a location approved by Franchisor not less than six (6) months prior to the date each respective Restaurant is required to be opened pursuant to the Development Schedule.

• 3.3. Lease: If Area Developer will occupy the premises at which a Restaurant is operated under a lease, Area Developer shall, prior to the execution thereof, submit such lease to Franchisor, for its written approval. Franchisor's approval of the lease may be conditioned upon the inclusion in the lease of such provisions as Franchisor may reasonably require, including, without limitation:
• 3.3.1. A provision which restricts the use of the premises during the term of the Franchise Agreement solely to the operation of the business franchised under the Franchise Agreement;
• 3.3.2. A provision which prohibits Area Developer from subleasing or assigning all or any part of its occupancy rights or extending the term of or renewing the lease, without Franchisor's prior written consent;
• 3.3.3. A provision that the landlord consents to Area Developer's use of such Proprietary Marks and signage as Franchisor may prescribe for the franchised business;
• 3.3.4. A provision giving Franchisor the right to enter the premises without assuming the lease to make modifications necessary to protect the Proprietary Marks and the System or cure any default under the Franchise Agreement;
• 3.3.5. A provision that the initial term of the lease, or the initial term together with any renewal terms (for which the rent shall be set forth in the lease), shall be for not less than fifteen (15) years;
• 3.3.6. A provision which requires the landlord concurrently to provide Franchisor with a copy of any written notice of breach or default under the lease sent to Area Developer; and which grants to Franchisor, in its sole discretion, the right (but not the obligation) to cure any breach or default under the lease, should Area Developer fail to do so, within fifteen (15) days after the expiration of the period in which Area Developer may cure the breach or default; and
• 3.3.7.

Source: Item 22 — CONTRACTS (FDD pages 84–85)