What is the dependency between developing Cinch I.T. Franchised Businesses and complying with the Development Schedule?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
- (a) Acknowledging that time is of the essence, You agree to exercise Your development rights according to Section 5.1 and according to the Development Schedule set forth on Addendum B, which schedule designates the number of CINCH I.T. Franchised Businesses in the Development Area to be established and in operation by You upon the expiration of each of the designated development periods ("Development Periods").
- (e) Failure by You to adhere to the Development Schedule (including any extensions approved by Franchisor) shall constitute a material event of default under this Agreement.
You shall open each CINCH I.T. Franchised Business in accordance with the Development Schedule set forth on Addendum B, unless, subject to Our approval, You obtain an extension of the Development Period from Us to commence operation of a particular CINCH I.T. Franchised Business under the procedure defined in (d)(ii) below. Each extension may be conditioned upon payment of an extension fee ("Extension Fee") of Five Thousand Dollars ($5,000.00) per extension.
We hereby grant to You the right and license to develop the number of CINCH I.T. Franchised Businesses listed in Addendum B in strict accordance with the Licensed Rights within the Development Area described in Addendum A. This Agreement is not a license or franchise agreement. It does not give You the right to operate a CINCH I.T. franchised business or use the System or the Marks, nor does it give You any right to license others to operate CINCH I.T. businesses. Each CINCH I.T. Franchised Business shall be governed by and operated according to the terms of the individual franchise agreement ("Franchise Agreement") signed by Franchisor and Multi-Unit Developer or its approved affiliate with respect thereto.
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, a multi-unit developer's ability to develop Cinch I.T. franchised businesses is directly tied to their adherence to the Development Schedule. The Development Schedule, outlined in Addendum B, specifies the number of Cinch I.T. Franchised Businesses that must be established and operational within defined Development Periods. The multi-unit developer agrees to develop their franchised businesses according to Section 5.1 and the Development Schedule.
The document states that failure to adhere to the Development Schedule constitutes a material breach of the agreement. The multi-unit developer must open each Cinch I.T. Franchised Business in accordance with the Development Schedule, unless an extension is granted by Cinch I.T.. Extensions are subject to Cinch I.T.'s approval and may require payment of an Extension Fee of $5,000 per extension. The multi-unit developer must also execute a Franchise Agreement for each Cinch I.T. Franchised Business at or prior to the applicable execution deadline set forth on Addendum B.
Notably, the agreement emphasizes that it does not grant the right to operate a Cinch I.T. franchised business until a separate Franchise Agreement is signed for each location. This agreement only grants the right to develop the number of Cinch I.T. Franchised Businesses listed in Addendum B. Therefore, while this agreement grants the right to develop, each individual Cinch I.T. Franchised Business must be established and operated pursuant to the form of Franchise Agreement then being used by Cinch I.T. for a Cinch I.T. Franchised Business.