If there is more than one developer named in the Crawlspace Medic agreement, how are their obligations viewed?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
Developer hereby acknowledges and agrees that the training Developer receives pursuant to the initial Franchise Agreement executed concurrently with this Agreement is sufficient to allow Developer to construct, equip, open and operate each of Developer's Crawlspace Medic outlets in the Development Area.
5.2 Mandatory Development Schedule.On a multiple store development agreement, the second location must be open within 1 year of the opening of the first location and all additional locations must be open at a minimum of every year thereafter until the development agreement has been satisfied. Consideration will be granted if there is a natural disaster, imposed government restrictions, or other uncontrollable acts of nature which strongly inhibit the franchisee from satisfying this requirement. All time extension requests must be submitted in writing to the franchisor within 30 days prior to the year deadline for consideration. The franchisor will have 10 days to respond in writing as to whether the request for extension will be granted. Subsequent to Developer's signing of this Agreement and the initial Franchise Agreement, and provided that all conditions in Section 5.4 hereof are satisfied or waived, upon the execution of a lease for Developer's first Crawlspace Medic outlet, Developer shall execute an additional Franchise Agreement for the development of the second Crawlspace Medic outlet to be opened under the Mandatory Development Schedule. Provided that all conditions in Section 5.4 hereof are satisfied or waived, upon the execution of a lease for each subsequent Crawlspace Medic outlet to be developed by Developer, Developer shall execute an additional Franchise Agreement for the development of the next Crawlspace Medic outlet to be opened under the Mandatory Development Schedule. Notwithstanding the foregoing, Developer shall open the Crawlspace Medic outlets in accordance with the following schedule:
| Outlet for Development | Mandatory Open Date | |------------------------|-------------------------------------------| | 1 | 12 months following the Effective Date | | 2 | 24 months following the Effective Date | | 3 | 36 months following the Effective Date | | 4 (if applicable) | 48 months following the Effective Date | Developer acknowledges and agrees that the terms of the Mandatory Development Schedule are reasonable and viable based upon Developer's independent investigation and analysis. Failure by Developer to adhere to the Mandatory Development Schedule (including any extensions thereof approved by Franchisor in writing pursuant to Section 5.3 below) shall constitute a material event of default under this Agreement.
Franchisor may determine in their sole discretion that Developer does not require a physical location for each Franchise Agreement that will be part of the Development Agreement. If this applies, the Mandatory Development Schedule shall refer to the date they begin operating in the territory that applies the Outlet for Development.
5.3 Extension of Mandatory Development Schedule. If Developer is unable to meet the
Mandatory Development Schedule for any outlet, Developer may seek a reasonable extension from Franchisor. All time extension requests must be submitted in writing to the franchisor within 30 days prior to the year deadline for consideration.
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2024 FDD)
Based on the 2024 Crawlspace Medic Franchise Disclosure Document, the obligations of each developer under a multi-unit development agreement are considered independently. Each developer is required to meet the development schedule, which mandates the opening of the second location within one year of the first, and subsequent locations annually thereafter.
Each developer must sign a separate Franchise Agreement for each Crawlspace Medic outlet they plan to establish. Upon signing each additional Franchise Agreement, the developer receives a credit from the initial Development Fee, which is then applied to the Initial Franchise Fee for that specific outlet. This indicates that each location is treated as a separate franchise with its own set of obligations, even within a multi-unit agreement.
If a developer fails to meet the development schedule due to circumstances like natural disasters or government restrictions, they may request a written extension from Crawlspace Medic. The franchisor has 10 days to respond to such requests in writing. This clause suggests that while there is a mandatory schedule, Crawlspace Medic is willing to consider legitimate reasons for delays, offering some flexibility to the developers. However, the initial Development Fee is non-refundable, regardless of whether the developer fulfills all development obligations.