Is the right to discontinue supplies upon default by Desi District in addition to other rights?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
Such rights of Desi District Franchise Group are in addition to any other right or remedy available to Desi District Franchise Group.
- 11.5 Business Data. All customer data and other non-public data generated by the Business is Confidential Information and is exclusively owned by Desi District Franchise Group.
Desi District Franchise Group hereby licenses such data back to Franchisee without charge solely for Franchisee's use in connection with the Business for the term of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, Desi District has the right to discontinue supplies upon default, and this right is in addition to any other rights or remedies available to them. Specifically, if a franchisee is in default or breach of the Franchise Agreement, Desi District has the option to (i) require cash on delivery for products or services, (ii) stop selling or providing any products and services, and/or (iii) request third-party vendors to not sell or provide products or services to the franchisee.
This action by Desi District does not constitute a breach or constructive termination of the agreement, nor does it change the competitive circumstances. The franchisee remains obligated under the agreement despite these actions taken by Desi District.
This clause is significant for prospective franchisees as it highlights Desi District's ability to exert control and limit a franchisee's operations in the event of a default. It also emphasizes that Desi District's actions do not relieve the franchisee of their obligations under the agreement. Franchisees should be aware of the conditions that constitute a default and the potential consequences, including the disruption of their supply chain and business operations.