5.3 Credit for Upfront Fees. For each full-service coffee developed by the Promoter in accordance with this Agreement, the Promoter will receive a credit of $5,000 on the initial fee at the time of signing the Franchise Agreement, up to a maximum cumulative number of full-service coffees that the Promoter has committed to develop in accordance with Schedule B. The developer will not receive credit for the upfront costs of Diedrich Coffee, which are kiosks or coffee carts, or for full-service cafes beyond the minimum development commitment. 7.3.1 This Agreement has been entered into by the Company on the basis of and taking into account the individual or collective character, reputation, skills, attitude, legal capacity and financial capacity of the Developer or, as the case may be, its owners, who will actively and substantially participate in the development, ownership and operation of Diedrich Coffee Coffeehouses. Accordingly, neither the Developer nor any of the Developer Owners may, directly or indirectly, sell, assign, transfer, transfer, give, pledge or otherwise encumber (an assignment) any direct or indirect interest in this Agreement or in all or substantially all of the Developer`s assets, without the prior written consent of the Company, giving consent for any reason after its sole discretion the subjective discretion of the company may be denied. Suppose a franchisor`s initial franchise fee is $30,000 and requires a down payment of $15,000 for each additional franchise the franchisee opens with multiple units. Let`s also assume that the franchisee with multiple units agrees to open five locations. After signing the multi-unit development agreement, the multi-unit developer typically signs its first franchise agreement and pays $90,000.00 to the franchisor. A territory development agreement (also known as a multi-unit development agreement) is a type of agreement with a franchisor that stipulates that a franchisee must open a certain number of franchise units in a given territory within a set period of time.

CONSIDERING that MRD wishes to obtain the exclusive right to develop, construct, manage and operate several Boston-based The Gourmet Pizza restaurants in accordance with the development schedule described in Appendix B (the “Development Plan”) and designates, in the territory described under Lease, the lease or sublease or any other agreement or instrument under which the Developer is granted the right to: to occupy a location and premises of Diedrich Coffee Coffeehouse. This Agreement and the Annexes contained therein contain all the terms and conditions agreed upon by the parties with respect to the subject matter of this Agreement. No other written or oral agreement regarding the subject matter of this Agreement shall be deemed to exist or be binding on either party, and all prior agreements, understandings and representations shall be merged herein and superseded herein. Developer represents that there are no simultaneous agreements or understandings between the parties with respect to the subject matter of this Agreement that are not contained herein. No officer, employee or representative of the Company shall have the authority to make any representations or promises not contained in this Agreement or in any potential franchisee offer circular required by applicable law, and the Developer agrees that it has signed this Agreement without relying on any such statement or promise. This Agreement may only be modified or amended by a written document signed by all parties. While each franchisee can acquire multiple locations over time, a regional developer – better known as a multi-unit developer – enters the franchise relationship with a multi-site development plan. 1. The California Department of Corporations requires that certain provisions of franchise documents be amended to comply with California law, including the California Franchise Investment Law, CAL.

COMPANY CODES Section 31000 et seq., and the California Franchise Relations Act, CAL. BUS. & PROF. CODE Section 20000 et seg. . . .