Where in the Desi District Multi-Unit Development Agreement can I find the definition of 'cause' for termination?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
oyalty Fees | $102,704.02 | |
| 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; |
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 termination within the Multi-Unit Development Agreement (MUDA) can be found in Section 4. Specifically, this section outlines both curable and non-curable defaults that could lead to the termination of the agreement.
For curable defaults related to the MUDA, the FDD indicates 'none', meaning the MUDA itself does not define curable defaults. However, for non-curable defaults, Section 4 of the MUDA lists failure to meet the development schedule and violation of the franchise agreement or any other agreement that gives Desi District the right to terminate it.
It is important for a prospective franchisee to carefully review Section 4 of the MUDA to fully understand what actions or omissions could lead to the termination of the agreement and what, if any, opportunities exist to correct the issue. Understanding these terms is crucial before entering into a Multi-Unit Development Agreement with Desi District.