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franchisee failed to open the agreed-upon number of shops, it
lost its exclusive rights in the territory and could not open any
additional Mister Donut shops. Petitioner could then operate, or
authorize others to operate, Mister Donut shops in the territory,
so long as the newly opened shops were not within a certain
proximity of the franchisee's already existing shops.
Franchisees were entitled to use the building design,
layout, signs, emblems, and color scheme relating to the Mister
Donut System, along with petitioner's copyrights, trade names,
trade secrets, know-how, and preparation and merchandising
methods, as well as any other valuable and confidential
information. However, petitioner retained exclusive ownership of
its current and future trademarks, as well as any additional
materials that constituted an element of the Mister Donut System.
Use of these assets was prohibited after the termination of the
franchise agreement.
The franchise agreements obligated petitioner to provide
training at petitioner's training facility in Saint Paul,
Minnesota, for employees of the franchisees. Instructional
programs covered every aspect involved in the operation of a
Mister Donut franchise, including production procedures and
techniques, personnel matters, accounting, promotion, and
maintenance. Petitioner required its new international
franchisees to send a minimum of two employees to the training
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Last modified: May 25, 2011