What is the consequence of failing to adhere to the Mandatory Development Schedule for Baya Bar?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
Developer acknowledges and agrees that the terms of the Mandatory Development Schedule are reasonable and viable based upon Developer's independent investigation and analysis. Failure by Developer to adhere to the Mandatory Development Schedule (including any extensions thereof approved by Franchisor in writing pursuant to Section 5.3 below) shall constitute a material event of default under this Agreement.
- 5.3 Extension of Mandatory Development Schedule. If Developer is unable to meet the Mandatory Development Schedule for any outlet, Developer may seek a reasonable extension from Franchisor. Any request for an extension must be in writing and submitted to Franchisor at least sixty (60) days prior to the Mandatory Open Date for such outlet. Franchisor shall not unreasonably withhold consent for such reasonable extension provided that Developer has (i) submitted its extension request in a timely manner; (ii) demonstrated diligent efforts to meet the original Mandatory Open Date; and (iii) has at all times acted in good faith and is otherwise fulfilling its obligations under this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 56–189)
What This Means (2024 FDD)
According to the 2024 Baya Bar Franchise Disclosure Document, failing to adhere to the Mandatory Development Schedule constitutes a material event of default under the Development Agreement. This means that the developer is obligated to follow the schedule agreed upon for opening new Baya Bar outlets.
However, the FDD also states that a developer may seek a reasonable extension from Baya Bar if they are unable to meet the Mandatory Development Schedule for any outlet. The request must be submitted in writing at least 60 days prior to the Mandatory Open Date. Baya Bar will not unreasonably withhold consent for the extension if the developer has submitted the request in a timely manner, demonstrated diligent efforts to meet the original date, acted in good faith, and is fulfilling their other obligations under the agreement.
If the developer fails to meet the schedule and does not obtain an approved extension, it triggers a default under the agreement. Item 23 outlines several other events that can also lead to default, such as misrepresentation of facts, falsifying reports, failure to comply with laws, attempting unauthorized transfers, conviction of a felony, adverse judgments, breach of non-disclosure agreements, defaults under other agreements, or terminating the agreement without cause. These defaults can lead to termination of the agreement and loss of development rights.