FRANCHISE AGREEMENT – Takoyaki Supreme

This Franchisee AGREEMENT (“Agreing the Franchisee Fee due

on the signing of this Agreement on ________________________. Upon payment of the
Franchisee Fee, the
Franchisee is entitled to the following:

• Use of trade names and logo

• Semi-Hi End Food Cart
• Operating Equipment and Utensils (subject to change without prior notice)
• Set of Personnel Uniform
• Comprehensive Training
• Notarized Franchisee Agreement
• Non-Payment of Renewal Fee
• No Hidden Charges
• No Quota
• No Royalty Fee

B. Orders
The Franchisee shall pay the amount of Products it shall order from the Franchisor
including the fee for the
delivery or shipment or other related terminal fees of the Products at the
designated location chosen by the
Franchisee which must be within the Territory.

The initial order mentioned herein includes the food cart. Further, it is
covenanted by both parties that the
minimum order of the products/goods is in the amount of Php: TEN THOUSAND PESOS
(Php10,000.00) ONLY in
areas where there is a designated and operating distributor. Whereas, in areas
where there is no distributor at
all, the franchisee’s initial order of products/goods shall be in the minimum
amount of FIFTEEN THOUSAND
PESOS (Php15,000.00) ONLY.”

C. Set-off and Withholding of Payment

The Franchisee agrees that it shall not set-off any amount due from the Franchisor
with respect to its financial
obligations under this Agreement. Likewise, the Franchisee shall not withhold any
payment due to the
Franchisor. Any violation under this Article entitles the Franchisor to terminate
this Agreement with right to
damages.

Franchise Agreement – Takoyaki Supreme 1

Article 2. Non-refundable of Payment
The Franchisee fully understands and agrees that the Payments mentioned in the
immediately preceding Article
is totally non-refundable upon the commencement of this Agreement.

Franchisee agrees that during the effectivity of this Agreement, non-operation and
low income shall not be a
ground for termination of this Agreement or for a refund of the Franchisee’s Fee.

Article 3. Pricing
The Franchisor shall set the selling prices of the Products to which the Franchisee
must fully comply. The
Franchisee shall not in any event increase or decrease the prices without the
written authority of the Franchisor.

Article 4. Term
This Agreement shall be effective for a period of one (1) year commencing on the
Effective Date as provided in
Article II of this Agreement and ending on _______________________________.
Notwithstanding the foregoing,
the Parties may agree to renew this Agreement.

Renewal will only take place the moment the franchisee signifies in writing his/her
intention to renew this
agreement within 30 days prior to the expiration of the one (1) year period.
Renewal of the term shall mean an
extension of another one (1) year period. Failure to provide the Franchisor of the
required written intention will
result to the automatic termination of this agreement. Provided further, the
renewal shall not be granted unless
the distributor had substantially complied with the rules, regulations and policies
as mandated by the Principal
including the pertinent provisions stated in this agreement.

Article 5. Quality Control

The Franchisee agrees to maintain and operate strictly in compliance with this
Agreement, the standards given
by the Franchisor, and the specification contained in the manual. The Franchisor
cannot be held liable for any
misuse or mishandling of the methods, system and products by the Franchisee.

a. Products Offered
The Franchisee agrees to purchase and offer all the products of the
Franchisor.

b. Personnel and Training Requirements

It shall be the duty of the Franchisee to thoroughly familiarize itself with
the standards and methods of
operating the business and hire sufficient, qualified and competent personnel
to meet the standards set
by the Franchisor in the operation of the business. Prior to the conduct of
business, the Franchisee and/or
its authorized representative must undergo training/seminar provided by the
Franchisor.

c. Random Spot Checking

The Franchisor reserves the right to check the Franchisee’s business premises
at any time of business day
without further notice. This is to ensure the mandatory compliance of the
Franchisee as regards the
products being sold, trademarks/service marks being used and other related
products are strictly followed
in accordance with the Franchisor’s guidelines. Any violation of the
Franchisee will be dealt with
accordingly with this agreement. Further, the Franchisee exercises no
restraint in the Franchisor’s right to
check the former’s business on matters as stated while this agreement is in
its due existence.

d. Alteration
The Franchisee is NOT AUTHORIZED to ALTER the brand name and menu

Article 6. Compliance with Law

Franchisee agrees to conduct the operation of business in compliance with all the
applicable laws and regulations
that are and may be applicable to the Franchisee with respect to all the activities
under this Agreement.
Franchisee agrees to take all such further acts and execute all such further
documents as Supplier reasonably
may request in connection with such compliance.

Article 7. Relationship of Parties

This Agreement does not create any fiduciary relationship between Franchisor and
Franchisee. Nothing in this
Agreement shall constitute the Franchisee as an agent, legal representative,
subsidiary, joint venture, partner or
employee of the Principal.

Franchisee is not authorized to make any contract, agreement, warranty, or

representation or to create
obligation, expressed or implied, on behalf of the Franchisor.

Article 8. Indemnification
Franchisee agrees to indemnify and hold Franchisor harmless from any and all
actions, awards, claims, losses,
damages, costs and expenses (including reasonable attorneys’ fees) attributable to
Franchisee’s breach of this
Agreement or to any negligent, grossly negligent, willful or unlawful acts or
omissions of Franchisee, its
employees, officers, agents, or representatives.

Article 9. Assignment
Franchisee shall have no right to assign any of its rights or obligations under
this Agreement without the prior
written consent of Principal. Any assignment without such written consent shall be
void and of no legal effect

Franchise Agreement – Takoyaki Supreme 2

whatsoever. In the event of valid assignment, this Agreement shall be binding upon
the Franchisee’s permitted
assigns.

Article 10. Death or Permanent Incapacity of Distributor

Upon the death, permanent incapacity or termination of juridical personality of the
Franchisee within the
effectivity of this Agreement, the Executor, Administrator or Authorized
Representative of the Franchiseeshall
assume the personality of the Franchisee under this Agreement but shall only for
the unexpired portion of the
term.

Article 11. Default and Termination

The Franchisor shall have the right to terminate this Agreement immediately upon
the occurrence of any of the
following events:

a. Unauthorized Disclosure
In the event the Franchisee intentionally or negligently discloses to
any unauthorized person the
contents of or any part of the Principal’s manual or any trade secrets
or confidential information
provided or acquired by the Franchisor in the during the course of its
business relationship with the
Principal.

b. Abandonment.
If the Franchisee ceases to operate the business or abandons the
location or forfeits the right to
operate the business.

c. Failure to Make Payments.

If the Franchisee fails to pay any amount due the Franchisor within ten
(10) days from notice to pay.

d. Criminal Conviction
If the Franchiseeis convicted of a felony, a crime involving moral
turpitude, or any crime or offense that
is reasonably likely, in the sole opinion of the Franchisor, to
materially and unfavorably affect the
goodwill or reputation of the Franchisor.

e. UNAUTHORIZED USE OF PRODUCTS NOT INCLUDED IN THE LISTS of the

merchantable items
provided by the Franchisor or unauthorized use of emblems trademarks or
service marks other than
that prescribed by the Franchisor, or any form of alterations of any
kind on the emblems, trademarks,
service marks on the prescribed products.

f. Purchasing and Selling of products from other suppliers is STRICTLY not

allowed, Franchisee will
order products to assigned distributors per area only or with head/branch
office

g. Franchisee is not allowed to be on the same location of other franchisee,

Franchisor allows Franchisee
at least 500 meters away from the other Franchisee and subject for
approval by the Franchisor.

If the Franchisee wilfully violates of any of the terms regarding the use, sale of
the prescribed products of the
Franchisor as well the use of altered emblems, marks and service marks of the
Franchisor which materially affects
the goodwill of the latter.

Article 12. Effects of Termination

Upon termination of this Agreement for any reason, the following shall apply:

a. All rights granted to Franchisee under this Agreement shall cease.

b. All outstanding balances owed by Franchisee to Franchisor shall become
immediately due and payable.
c. Any obligations of Franchisor to Franchiseeunder this Agreement shall
immediately cease.

Article 13. Confidentiality

The Franchisee shall treat all information it receives from the Principal strictly
confidential and shall not use such
information in an unauthorized manner or disclose the same to any unauthorized
person without the written
consent of the Principal.

This obligation of the Franchisee shall survive this Agreement. Notwithstanding the
foregoing, either party
may disclose confidential information to governmental agencies or by court order to
the extent that this is
required by law, regulatory or judicial order.

Article 14. Notice

Any notice, demand, or request permitted to be given by either Party to the other,
and any instrument required
or permitted to be tendered or delivered by either Party to the other, shall be in
writing and addressed to the
other Party and be so given, tendered, or delivered, as the case may be, by a
recognized courier company or via
personal delivery at their respective addresses set forth in this Agreement.

Franchise Agreement – Takoyaki Supreme 3

Article 15. Governing Law and Settlement of Disputes
a) This Agreement and the rights and obligations of the Parties hereunder shall
be governed by and
construed in accordance with the Laws of Philippines.

Should there be a dispute or disagreement between the Parties regarding the

interpretation of the
provisions of this Agreement or the performance of their respective
obligations under this Agreement, a
Party shall send the other Party a written request for a meeting in order to
discuss and resolve the dispute.
The Parties, in good faith, shall endeavor to reach an amicable settlement
within thirty (30) calendar days
from the receipt of the written request. If the Parties fail to settle the
dispute during said period, either
party may avail of legal remedies to protect its interest before the proper
court.

All legal disputes arising from this Agreement shall only be filed
exclusively in the proper courts of
Mandaluyong City.

b) Arbitration Clause.
If both Parties herein agree, any dispute, controversy or claim arising out
of or relating to this contract, or
the breach, termination or invalidity thereof shall be settled by
arbitration. All claims and disputes arising
under or relating to this Agreement are to be settled by binding arbitration
in accordance with the
Philippine Dispute Resolution Center Inc. and other modes of Arbitration
Rules as at present in force.

Any decision or award as a result of any such arbitration proceeding shall

be in writing and shall provide
an explanation for all conclusions of law and fact and shall include the
assessment of costs, expenses, and
reasonable attorneys' fees. Any such arbitration shall be conducted by an
arbitrator experienced in
commerce and related industry and shall include a written record of the
arbitration hearing. The parties
reserve the right to object to any individual who shall be employed by or
affiliated with a competing
organization or entity. An award of arbitration may be confirmed in a court
of competent jurisdiction.

Article 16. No Waiver

Franchisee acknowledges and agrees that any failure on the part of Franchisor to
enforce at any time or for any
period of time, any of the provisions of this Agreement shall not be deemed or
construed to be a waiver of such
provisions or of the right of Franchisor to enforce each and every provision
thereafter.

Article 17. No Liability

The Franchisor shall not be liable for any indirect, special, incidental or
consequential loss or damage for any loss
profits or loss of revenues suffered by Franchisee arising from or in any way
connected with this Agreement or
the sale, distribution or use of the Franchisor’s Products.
Article 18. No Assurance
Franchisee acknowledges and agrees that the business venture contemplated in this
Agreement involves
substantial risks and depends upon Franchisee’s ability as an independent business
person and his/her active
participation in the daily affairs of the business. No assurance or warranty,
express or implied, has been given or
provided as to the potential success of such business venture or the earnings to be
achieve

IN WITNESS THEREOF, the parties have executed and signed this Agreement as of the
date first above set forth.

Girlie Castillo
Franchisor Franchisee

Signed in the presence of:

Franchise Agreement – Takoyaki Supreme 4

REPUBLIC OF THE PHILIPPINES)
_______________________________ )S.S.

BEFORE ME, a Notary Public in and for __________________________________ on this

_________ day of
_______________________________appeared the following:

Name of Party Proof of Identity Date/Place of Issue

known to me to be the same persons who executed the foregoing instrument consisting
of five (5) pages
including this page where the acknowledgement is written and acknowledged to me
that the same is their own
free and voluntary act and deed.

WITNESS MY HAND AND SEAL.

Doc. No. _______

Page No. _______
Book No._______
Series of _______

Franchise
Agreement – Takoyaki Supreme 5