Is a Better Blend franchisee obligated to develop additional outlets under a Multi-Unit Development Agreement?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
e to circumstances beyond your control.
You do not have the right to establish additional franchised outlets unless you sign a Multi-Unit Development Agreement ("MUDA") in the form attached as Exhibit C to this disclosure document. If you and we sign a MUDA, then you will have the right to establish a mutually-agreed number of additional outlets on a mutually-agreed schedule. Under the MUDA, your right to develop additional outlets is subject to (1) you must comply with the mutually-agreed development schedule, (2) you must have sufficient financial and organizational capacity to develop, open, operate, and manage each additional Better Blend business, (3) you must be in compliance with all brand requirements at your open Better Blend business(es), and (4) you must not be in default under any other agreement with us. We will approve the location of future sites and territories for those sites, and our then-current standards for sites and territories will apply. For each future site, you must sign our then-current form of Franchise Agreement, which may be materially different than the original Franchise Agreement that you signed. You are not obligated to develop additional outlets under the MUDA, and you may terminate it any time without penalty. If you do not meet your development schedule in the MUDA, we have the right to terminate your right to develop additional outlets.
Options to Acquire Additional Franchises
You do not receive any options, rights of first refusal, or similar rights to acquire additional franchises.
Territory Protection
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
In your franchise agreement, we grant you a protected territory.
Source: Item 12 — TERRITORY (FDD pages 27–29)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, a franchisee is not obligated to develop additional outlets even if they sign a Multi-Unit Development Agreement (MUDA). The FDD states that a franchisee may terminate the MUDA at any time without penalty. However, if a franchisee does not meet the development schedule outlined in the MUDA, Better Blend has the right to terminate the franchisee's right to develop additional outlets.
If a franchisee and Better Blend sign a MUDA, the franchisee gains the right to establish a mutually agreed-upon number of additional outlets based on a mutually agreed-upon schedule. This right is contingent upon several factors: compliance with the development schedule, sufficient financial and organizational capacity to manage the new businesses, adherence to all brand requirements at existing Better Blend locations, and remaining in compliance with all agreements with Better Blend. The locations of future sites are subject to Better Blend's approval, and the then-current standards for sites and territories will apply.
For each new location under a MUDA, the franchisee must sign Better Blend's then-current form of Franchise Agreement, which may differ materially from the original agreement. Furthermore, if a franchisee signs a MUDA, Better Blend grants them exclusive development rights in the development area until the date the final Better Blend location is to open. During this period, Better Blend will not establish company-owned or franchised outlets selling similar goods or services under the same trademarks. This territorial exclusivity is contingent on meeting the development schedule and avoiding termination of the MUDA due to default under a franchise agreement.