During arbitration or litigation, are Desi District and the franchisee required to continue performing their obligations under the franchise agreement?

According to Desi District's 2024 Franchise Disclosure Document, both Desi District and the franchisee are required to continue performing their obligations under the franchise agreement during any arbitration or litigation process, unless the agreement has been terminated. This means that regardless of any ongoing dispute, the franchisee must continue to operate the business according to the standards set forth in the franchise agreement, and Desi District must continue to provide the support and services outlined in the agreement.

This requirement ensures business continuity and protects the brand's reputation during dispute resolution. For the franchisee, this means continuing to pay royalties, adhere to operational standards, and uphold brand requirements. For Desi District, it entails providing ongoing support, supplying necessary resources, and honoring the terms of the franchise agreement.

This clause is fairly standard in franchise agreements. It is designed to prevent either party from using the dispute as an excuse to suspend their obligations, which could harm the business or the brand. However, it also places a significant responsibility on both parties to maintain their commitments even when a dispute is ongoing, potentially adding financial and operational strain during an already difficult period.