What is the consequence of a Crawlspace Medic developer failing to meet the Mandatory Development Schedule?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
- 7.2 Defaults with No Opportunity to Cure. Developer shall be deemed to be in material default and Franchisor may, at its option, terminate this Agreement and all rights granted hereunder, without affording Developer any opportunity to cure the default, effective immediately upon notice to Developer, if Developer:
- 7.2.1 has misrepresented or omitted material facts in applying for the development rights granted hereunder;
- 7.2.2 falsifies any report required to be furnished Franchisor hereunder;
- 7.2.3 fails to comply with any federal, state or local law, rule or regulation, applicable to the development and operations of Developer's Crawlspace Medic outlets, including, but not limited to, the failure to pay taxes;
- 7.2.4 fails to develop the Crawlspace Medic outlets in accordance with the Mandatory Development Schedule.
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2024 FDD)
According to Crawlspace Medic's 2024 Franchise Disclosure Document, a developer's failure to adhere to the Mandatory Development Schedule constitutes a material default. This gives Crawlspace Medic the option to terminate the Multi-Unit Development Agreement and all rights granted to the developer under it. This termination can occur immediately upon notice, without affording the developer any opportunity to rectify the failure.
This provision underscores the importance of meeting the development deadlines outlined in the agreement. The Mandatory Development Schedule requires the second location to open within one year of the first, with subsequent locations opening at least every year thereafter. Crawlspace Medic may grant consideration for delays caused by natural disasters, government restrictions, or other uncontrollable acts of nature, provided the developer submits a written request for an extension at least 30 days before the deadline.
For a prospective Crawlspace Medic multi-unit developer, this means that securing financing, real estate, and necessary resources to open locations on schedule is critical. Failure to do so could result in the loss of development rights and the potential loss of the development fee, as the FDD states that the Development Fee is fully earned upon signing the Multi-Unit Development Agreement and is non-refundable under any circumstances. The developer should carefully assess their capacity to meet the schedule before entering into the agreement.