California Development Agreement

EXHIBIT 10.30


PAPA JOHN'S


DEVELOPMENT AGREEMENT


Developer: PJ America, Inc.
Address: P.O. Box 611165
Birmingham, AL 35261-1165


Number of Restaurants: Thirty-seven (37)
Development Area: Kern, Ventura, San Luis Obispo,
Santa Barbara and Northern
Los Angeles Counties in California


TABLE OF CONTENTS


Page 1. Grant.................................................................. 2


2. Development Fee........................................................ 3


3. Development of Restaurants; Schedule for Completion.................... 3


4. Term................................................................... 7


5. Construction or Remodeling............................................. 7


6. Your Organization, Operation and Ownership............................. 7


7. Your Covenants......................................................... 8


8. Principal Operator..................................................... 10


9. Default and Termination................................................ 11


10. Assignment or Transfer................................................. 13


11. No Grant of Franchise or Franchise Rights.............................. 14


12. Notices................................................................ 14


13. Independent Contractor; Indemnification................................ 15


14. Enforcement............................................................ 16


15. Acknowledgements....................................................... 20


16. Miscellaneous.......................................................... 22


(i)


DEVELOPMENT AGREEMENT
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THIS DEVELOPMENT AGREEMENT ("Agreement") is made and entered into this _____ day of June, 1997, by and between PAPA JOHN'S INTERNATIONAL, INC., a Delaware corporation ("we", "us" or "Papa John's"), and PJ AMERICA, INC., a Delaware corporation ("you"). If you are a corporation, limited liability company or partnership, certain provisions of the Agreement also apply to your owners and will be noted.


RECITALS:
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A. We and our Affiliates (defined below) have expended time, money and effort to develop a unique system for operating retail restaurants devoted primarily to carry-out and delivery of pizza and other food items. The chain of current and future Papa John's restaurants are referred to herein as the "Papa John's Chain" or the "Chain".


B. The Chain is characterized by a unique system which includes special recipes and menu items; distinctive design, decor, color scheme and furnishings; software and programs; standards, specifications and procedures for operations; procedures for quality control; training assistance; and advertising and promotional programs all of which we may improve, amend and further develop from time to time (the "System").


C. We identify our goods and services with certain service marks, trade names and trademarks, including but not limited to, "Papa John's," "Papa John's Pizza," "Pizza Papa John's Delivering the Perfect Pizza!" and "Better Ingredients. Better Pizza." as well as certain other trademarks, service marks, slogans, logos and emblems that have been and may be designated for use in connection with the System from time to time (the "Marks").


D. You desire to obtain certain rights to develop one or multiple Papa John's Pizza restaurant(s) in the "Development Area" (as defined below) in accordance with the terms of this Agreement.


E. We have agreed to grant you such rights;


NOW, THEREFORE, the parties agree as follows:


1. Grant.
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(a) Subject to the terms and conditions of this Agreement and your continuing faithful performance, we hereby grant to you the right and obligation to establish 37 Papa John's restaurant(s) (at specific locations we approve) in the areas specified on attached Exhibit A. (The Papa John's restaurants that you develop pursuant to this Agreement are collectively referred to as the "Restaurants" and individually as a "Restaurant"; the areas specified on Exhibit A are collectively referred to as the "Development Area"). Notwithstanding the foregoing, enclosed malls, institutions (such as hospitals or schools), airports, parks (including theme parks), and sports arenas shall be excluded from the Development Area unless otherwise agreed by us in writing, and absent such agreement, we may open Papa John's restaurants, or franchise the right to open Papa John's restaurants to other persons at any of these locations, regardless of where they are located.


(b) Each Restaurant shall be established and operated pursuant to a separate "Franchise Agreement" to be entered into between you and us. As used herein, the term "Franchise Agreement" shall mean the form of Papa John's Franchise Agreement (for the initial Restaurant) or Short Form Franchise Agreement (for each subsequent Restaurant) to be executed for each Restaurant developed under this Agreement and all attachments and exhibits thereto.


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(c) Except as may be otherwise provided herein or in the Franchise Agreements, we shall not locate, nor license another to locate, a Papa John's restaurant in the Development Area during the "Term" (as defined in Section 4).


(d) This Agreement is not a franchise agreement and we do not grant you any franchise rights or other rights to use the Marks or System under this Agreement.


(e) You have no right to license or subfranchise others to use the Marks or the System, or to enter into any agreement with respect to the Marks or System.


2. Development Fee. You have paid to us a development fee of One Hundred Eighty-five Thousand Dollars ($185,000) ("Development Fee") (i.e. Five Thousand Dollars ($5,000) for each Restaurant to be developed), receipt of which we acknowledge. The Development Fee was fully earned by us when paid, is non- refundable and is not contingent upon our rendering any further performance. The Development Fee is in consideration of, among other things, the development rights granted to you, the reservation of the Development Area, the development opportunities lost or deferred as a result of the rights granted to you in this Agreement and the administrative and other expenses that we have incurred. However, $5,000 of the Development Fee will be credited against each Initial Franchise Fee at the time it is paid, as provided in Section 3.


3. Development of Restaurants; Schedule for Completion.
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(a) You shall have the number of Restaurants open and operating within the time frame set forth in subsection 3. below, and you shall exercise each such development right only at locations that we have approved within the Development Area.


(b) With respect to each proposed location, you shall submit a completed site evaluation form, together with such other information and materials as we may reasonably request. We shall have 30 days after receipt of such information to accept or reject each proposed location.


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If we fail to respond within such 30 day period, the location submitted by you shall be deemed to be approved. We will not unreasonably withhold our approval of a location. In approving or disapproving any proposed site, we will consider such matters as we deem material, including, without limitation, demographic characteristics of the proposed site, traffic patterns, parking, the predominant character of the neighborhood, competition from other businesses providing similar services within the area (including other Papa John's Restaurants), the proximity to other businesses, the rights granted to our other franchisees, the nature of other businesses in proximity to the site, and other commercial characteristics (including the purchase price or rental obligations and other lease terms for the proposed site) and the size of the premises, appearance, and other physical characteristics of the proposed site. Approval of a site by us does not constitute an assurance, representation or warranty of any kind, expressed or implied, as to the successful operation of a Papa John's Restaurant, or for any other purpose. Our approval of a site indicates only that we believe the site complies with an acceptable minimum criteria that we establish solely for our purposes as of the time period encompassing the evaluation. You acknowledge that application of criteria that have been effective with respect to other sites and premises may not be predictive of potential for all sites. Further, demographic and/or economic factors included in our criteria could change and other relevant factors that might alter the potential of a site may be excluded from our criteria. The uncertainty and instability of such criteria are beyond our control. We are not responsible if a site that we approve fails to meet your expectations as to potential revenue or operational criteria or for your failure to locate the required number of suitable sites in the Development Area. You further acknowledge and agree that your acceptance of a Franchise for the operation of a Papa John's Restaurant at a site is based on your own independent investigation of the suitability of a site. Any proposed lease shall include an addendum in the form of Exhibit A to the Franchise Agreement, or shall contain terms and conditions substantially similar to those contained in Exhibit A to the Franchise Agreement. Any changes in the language set forth in Exhibit A must be approved by us in advance in writing.


(c) We shall deliver the Franchise Agreement to you within 20 days after you provide the address and telephone number for an approved location that you have leased or


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purchased. The Franchise Agreement for such location must be signed by you and submitted to us along with payment of the initial franchise fee within 10 days after it is delivered to you.


(d) The approval of a location and the delivery of a Franchise Agreement by us shall be conditioned upon a determination by us, in our reasonable judgment, that:


(i) You have the financial and operational capacity to develop and operate the Restaurant;


(ii) the site that you propose for the Restaurant is within the Development Area and is a suitable site based upon criteria that we establish from time to time; and


(iii) You and your owners are in compliance with this Agreement and all Franchise Agreements executed pursuant to this Agreement.


(e) Notwithstanding any provision of any Franchise Agreement entered into between us and you, you shall exercise each development right as follows:


DEVELOPMENT SCHEDULE
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Cumulative Number of Dates on Which Each Restaurants to be Restaurant Shall be Open Open and Operating* - ------------------------ --------------------


April 1, 1998 1
August 1, 1998 2
November 1, 1998 3
February 1, 1999 4
June 1, 1999 5
August 1, 1999 6
October 1, 1999 7
December 1, 1999 8
February 1, 2000 9


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June 1, 2000 10
August 1, 2000 11


DEVELOPMENT SCHEDULE (cont.)
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Cumulative Number of Dates on Which Each Restaurants to be Restaurant Shall be Open Open and Operating* - ------------------------ --------------------


October 1, 2000 12
December 1, 2000 13
February 1, 2001 14
June 1, 2001 15
August 1, 2001 16
October 1, 2001 17
December 1, 2001 18
February 1, 2002 19
June 1, 2002 20
August 1, 2002 21
October 1, 2002 22
December 1, 2002 23
February 1, 2003 24
June 1, 2003 25
August 1, 2003 26
October 1, 2003 27
December 1, 2003 28
February 1, 2004 29
June 1, 2004 30
August 1, 2004 31
October 1, 2004 32
December 1, 2004 33
February 1, 2005 34
June 1, 2005 35
August 1, 2005 36
October 1, 2005 37


[* - Includes only those Restaurants to be developed pursuant to this
Development Agreement.]


(f) The Initial Franchise Fee to be paid by you for each Restaurant shall be $20,000; provided that $5,000 of the Development Fee shall be credited against the Initial


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Franchise Fee. The net amount of the Initial Franchise Fee ($15,000) shall be paid at the time each Franchise Agreement is executed.


(g) It shall be your responsibility to ensure that each Restaurant is constructed or remodeled, and equipped and operated in compliance with all laws, ordinances and governmental rules and regulations and the Franchise Agreement, and you shall obtain all necessary permits and licenses relating thereto.


4. Term. Unless sooner terminated as provided in this Agreement, this Agreement shall expire on the earlier to occur of: (a) the date on which all the Restaurants have been developed, or (b) 12:00 midnight on the last date set forth on the Development Schedule (the "Term"). Upon the termination or expiration of this Agreement, all unexercised development rights shall expire.


5. Construction or Remodeling. You shall, at your own expense, construct or remodel the Restaurant at each location in accordance with the then-current specifications and standards established for the System and the terms of the Franchise Agreement. You shall allow us and our agents and employees access to all areas of the premises of each Restaurant at such times as we or they may reasonably request and you shall cooperate fully with us and our agents and employees in preparing specifications applicable to the location of each Restaurant to be developed hereunder. However, it shall be your obligation to have plans drawn showing the layout of all equipment, signs and leasehold improve ...