What is the definition of 'Owner' in the context of actions that can lead to termination of the Desi District franchise agreement?

According to the 2024 Desi District Franchise Disclosure Document, the term 'Owner' is relevant in the context of actions that can lead to the termination of the franchise agreement. Specifically, if any Owner is charged with, pleads guilty or no-contest to, or is convicted of a felony, Desi District Franchise Group may terminate the agreement. Additionally, the agreement can be terminated if an Owner is accused by a governmental authority or third party of any act, or commits any act or series of acts, that Desi District Franchise Group believes is reasonably likely to materially and unfavorably affect the Desi District brand.

This means that the actions of anyone considered an 'Owner' can have significant repercussions for the franchise. A prospective franchisee should carefully consider who the 'Owners' are within their business structure, as their actions could lead to termination of the franchise agreement, even if the franchisee themselves are not directly involved in the problematic behavior. This extends beyond just criminal convictions to include actions that could damage the brand's reputation.

It is important for a potential Desi District franchisee to understand the full scope of who is considered an 'Owner' under the franchise agreement and to ensure that all Owners are aware of the standards of conduct expected of them. This may include conducting thorough background checks and establishing internal policies to prevent actions that could jeopardize the franchise agreement. Franchisees should seek clarification from Desi District Franchise Group regarding the specific definition of 'Owner' and what types of actions could be considered detrimental to the brand.