Under what conditions can the Amorino Area Developer exercise the right of additional development?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
4.5 Conditions to Exercise of Right of Additional Development
Area Developer's right to additional development described in Section 4.3 shall be subject to Area Developer's fulfillment of the following conditions precedent:
- (a) Area Developer shall be in good standing under this Agreement and all other agreements between Company and Area Developer.
- (b) Area Developer shall have demonstrated to Company, Franchisee's financial capacity to perform the additional development obligations set forth in the new area development agreement. In determining if Area Developer is financially capable, Company will apply the same criteria to Area Developer as it applies to prospective Area Developers at that time.
- (c) At expiration of the Term, Area Developer shall continue to operate, in the Area Development Territory, not less than the aggregate number of Stores required by the Minimum Development Obligation set forth in Schedule "A".
- (d) Area Developer shall not have already received the right to enter into three additional five-year development terms.
V. PAYMENTS BY AREA DEVELOPER
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
According to the 2025 Amorino Franchise Disclosure Document, an Area Developer's right to additional development is contingent upon fulfilling specific conditions. Approximately 60 days before the expiration of the current agreement's term, Amorino will notify the Area Developer in writing if they determine that further development within the Area Development Territory is desirable. This notification will include Amorino's proposed schedule for development over the subsequent five-year term.
To be eligible for additional development, the Area Developer must be in good standing under the existing agreement and all other agreements with Amorino. They must also demonstrate the financial capacity to handle the additional development obligations outlined in the new area development agreement, meeting the same financial criteria applied to new Area Developers at that time.
Furthermore, at the expiration of the initial term, the Area Developer must still be operating at least the number of stores required by the Minimum Development Obligation as specified in Schedule "A". Finally, the Area Developer must not have already received the right to enter into three additional five-year development terms. If all these conditions are met, the Area Developer has the first right to undertake the additional development as outlined in Amorino's notice, exercised in accordance with Section 4.4 of the agreement.