Where in the Desi District franchise agreement can I find the definition of 'cause' related to non-curable defaults?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in franchise or other agreement | Summary |
|---|---|---|
| e. Termination by | Not Applicable | |
| franchisor without cause | ||
| f. Termination by franchisor with cause | FA: § 14.2 MUDA: § 4 | We may terminate your agreement for cause, subject to any applicable notice and cure opportunity. If you sign a Multi-Unit Development Agreement, termination of your MUDA does not give us the right to terminate your franchise agreement. However, if your franchise agreement is terminated, we have the right to terminate your MUDA. |
| g. "Cause" defined curable defaults | FA: § 14.2 MUDA: none | Non-payment by you (10 days to cure); violate franchise agreement other than non-curable default (30 days to cure); operate in a manner dangerous to health or safety (48 hours to cure). |
| h. "Cause" definednon curable defaults | FA: § 14.2 MUDA: § 4 | FA: Misrepresentation when applying to be a franchisee; knowingly submitting false information; bankruptcy; lose possession of your location; violation of law; violation of confidentiality; violation of non-compete; violation of transfer restrictions; slander or libel of us; refusal to cooperate with our business inspection; cease operations for more than 5 consecutive days; three defaults in 12 months; cross-termination; charge or conviction of, or plea to a felony, or commission or accusation of an act that is reasonably likely to materially and unfavorably affect our brand; any other breach of franchise agreement which by its nature cannot be cured. MUDA: failure to meet development schedule; violation of franchise agreement or other agreement which gives us the right to terminate it. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 44–48)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, the definition of 'cause' for non-curable defaults can be found in Section 14.2 of the Franchise Agreement (FA) and Section 4 of the Multi-Unit Development Agreement (MUDA). The FDD outlines specific actions that constitute non-curable defaults.
For the Franchise Agreement, these include misrepresentation when applying to become a franchisee, knowingly submitting false information, bankruptcy, losing possession of the location, violating laws, confidentiality, or non-compete agreements, slandering or libeling Desi District, refusing to cooperate with business inspections, ceasing operations for more than five consecutive days, incurring three defaults within 12 months, cross-termination, being charged or convicted of a felony (or an act likely to negatively affect the brand), and any other incurable breach of the franchise agreement.
For the Multi-Unit Development Agreement, non-curable defaults include failure to meet the development schedule and violating the franchise agreement or any other agreement that gives Desi District the right to terminate it. These stipulations are important for prospective franchisees to understand, as these actions can lead to the termination of their agreement with Desi District without an opportunity to correct the issue.