Does a Better Blend franchisee have the right to establish additional franchised outlets without a Multi-Unit Development Agreement?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
Source: Item 12 — TERRITORY (FDD pages 27–29)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, franchisees do not have the right to establish additional franchised outlets unless they sign a Multi-Unit Development Agreement (MUDA). If a franchisee and Better Blend sign a MUDA, the franchisee gains the right to establish a mutually-agreed number of additional outlets on a mutually-agreed schedule.
Under the MUDA, the franchisee's right to develop additional outlets is contingent upon several factors. These include complying with the development schedule, possessing sufficient financial and organizational capacity to manage each additional Better Blend business, maintaining compliance with all brand requirements at their existing Better Blend businesses, and remaining in compliance with all agreements with Better Blend. The franchisor retains approval rights over the location of future sites, applying their then-current standards for sites and territories. For each new site, the franchisee must sign Better Blend's current form of Franchise Agreement, which may differ materially from the original agreement.
While franchisees are not obligated to develop additional outlets under the MUDA and can terminate it at any time without penalty, Better Blend reserves the right to terminate the franchisee's right to develop additional outlets if the development schedule is not met. This arrangement is fairly typical in franchising, where multi-unit agreements provide a structured path for expansion while protecting the brand's interests and ensuring the franchisee's capability to manage multiple locations effectively.