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Author: findingmyway Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 401  
Subject: Franchising Date: 11/11/1999 10:22 AM
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Jim -

Looks like I was incorrect. The agreements are a percentage of gross(good!). Seems the Bass deal, the first one negociated, "averages" 5% and the following agreements seem to have been better negociated to lock in that 5%. As far as "cash up front" I have found no info on such an arrangement. The following few paragraphs are excerpts from the "International" section of the last 10-K report:


In August 1995, the Company entered into a license agreement with a subsidiary of Bass Plc ("Bass") to license the "Dave & Buster's" name and concept in the United Kingdom. Under this agreement, Bass opened a Complex in Birmingham, England in May 1997, a Complex in Bristol, England in July 1998, and has agreed to open a total of seven Complexes in the United Kingdom by 2005. Under the license agreement, Bass is required to pay the Company a royalty based upon gross revenues, net of value added taxes. The royalty rate paid by Bass is a sliding scale which averages 5% of gross revenues. The license agreement contains strict operating covenants to ensure consistency of the menu and
entertainment offerings with those in the Company-operated Complexes.

In February 1998, the Company entered into a license agreement with the TaiMall Development Company ("TaiMall") to license the "Dave & Buster's" name and concept in the Pacific Rim. Under this agreement,
TaiMall expects to open seven Complexes in the Pacific Rim by the year 2006, the first of which it anticipates opening in 1999. Under the license agreement, TaiMall is required to pay the Company a 5% royalty based upon gross revenues. The license agreement contains strict
operating covenants to ensure consistency of the menu and entertainment offerings with those in the Company operated Complexes.

In September 1998, the Company entered into a license agreement with the SVAG Development Corporation ("SVAG")to license the "Dave & Buster's" name and concept in Germany, Switzerland and Austria. Under this agreement, SVAG expects to open seven Complexes by the year 2007, and is required to pay the Company a 5% royalty based upon gross revenues. The license agreement contains strict operating covenants to ensure consistency of the menu and entertainment offerings with those in the Company operated Complexes.

In December 1998, the Company entered into a letter of intent to license the "Dave & Buster's" name and concept in Canada with W.I.N. Gaming Corp. It proposes to develop five locations in Canada, with the first location targeted to open in a Toronto retail enter in the year 2000. In October 1997, the Company entered into a letter of intent to license the "Dave & Buster's" name and concept in Mexico with ECE S.A. de C.V to develop five locations. There is no assurance that these letters of intent will result in definitive agreements.
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