Does Chop5 Salad Kitchen's acceptance of payments after a breach constitute a waiver of their rights?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
Neither party shall be deemed to have waived or impaired any of its contractual rights under this Agreement (including the right to require strict compliance with all terms of this Agreement or terminate this Agreement due to the other party's failure to comply with such terms) by virtue of: (a) any custom or practice of the parties at variance with the terms of this Agreement; (b) any failure, refusal or neglect by either party to exercise any right under this Agreement or require the other party to strictly comply with its obligations under this Agreement; (c) our waiver, failure or refusal to exercise any of our rights with respect to other area developers; or (d) our acceptance of payments from you after your breach.
Source: Item 23 — RECEIPT (FDD pages 50–178)
What This Means (2024 FDD)
According to Chop5 Salad Kitchen's 2024 Franchise Disclosure Document, Chop5 Salad Kitchen's acceptance of payments from a franchisee after a breach of the franchise agreement does not constitute a waiver of their rights. This means that even if Chop5 Salad Kitchen continues to accept payments from a franchisee who has violated the terms of the agreement, Chop5 Salad Kitchen still retains the right to enforce the agreement's terms or terminate the agreement due to the franchisee's non-compliance.
This provision protects Chop5 Salad Kitchen's ability to address breaches of the franchise agreement without inadvertently relinquishing their legal rights. For a prospective franchisee, this highlights the importance of adhering to all terms of the franchise agreement. Even if Chop5 Salad Kitchen continues to accept payments, they can still take action regarding any breaches.
This type of clause is relatively common in franchise agreements. It allows the franchisor some flexibility in working with franchisees while still preserving their right to enforce the agreement. Franchisees should be aware that continued payment acceptance does not imply forgiveness of any breach.