International Multifoods Corporation and Affiliated Companies - Page 8

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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