Does Chop5 Salad Kitchen's acceptance of payments after a breach waive their right to address the breach?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
- **12.3.
Waivers.** Each party may waive any obligation imposed on the other party in writing.
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 the 2024 Chop5 Salad Kitchen Franchise Disclosure Document, Chop5 Salad Kitchen's acceptance of payments from a franchisee after a breach does not automatically waive their right to address that breach. The franchise agreement specifies that Chop5 Salad Kitchen's contractual rights are not considered waived or impaired simply because they accept payments after a franchisee's breach of the agreement. This includes the right to require strict compliance with all terms of the agreement or to terminate the agreement due to the franchisee's failure to comply with such terms.
This provision protects Chop5 Salad Kitchen's ability to enforce the franchise agreement even if they continue to accept payments from a franchisee who is in violation of the agreement. It means that Chop5 Salad Kitchen can still take action to address the breach, such as demanding compliance, imposing penalties, or even terminating the franchise agreement, despite having accepted payments during the period of non-compliance. This is a fairly common clause in franchise agreements, designed to give the franchisor flexibility in dealing with franchisees who may be experiencing difficulties or are in minor violation of the agreement.
For a prospective Chop5 Salad Kitchen franchisee, this clause highlights the importance of adhering to the terms of the franchise agreement. Even if Chop5 Salad Kitchen continues to accept payments, they retain the right to enforce the agreement and address any breaches. Franchisees should not assume that continued acceptance of payments implies forgiveness or waiver of any violations. It is crucial to maintain open communication with Chop5 Salad Kitchen and address any potential issues promptly to avoid further action. This clause underscores the need for franchisees to understand their obligations and the potential consequences of non-compliance.