Does stopping supplies relieve the Desi District franchisee of their obligations under the agreement?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
While Franchisee is in default or breach of this Agreement, Desi District Franchise Group may (i) require that Franchisee pay cash on delivery for products or services supplied by Desi District Franchise Group, (ii) stop selling or providing any products and services to Franchisee, and/or (iii) request any third-party vendors to not sell or provide products or services to Franchisee.
No such action by Desi District Franchise Group shall be a breach or constructive termination of this Agreement, change in competitive circumstances or similarly characterized, and Franchisee shall not be relieved of any obligations under this Agreement because of any such action.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, if a franchisee is in default or breach of the franchise agreement, Desi District has the right to take certain actions, including stopping the supply of products and services. However, this action does not relieve the franchisee of their obligations under the agreement.
Specifically, even if Desi District stops providing supplies due to a franchisee's default, the franchisee is still responsible for fulfilling all other obligations outlined in the franchise agreement. This could include financial obligations, adherence to brand standards, and any other requirements specified in the agreement.
This clause protects Desi District by ensuring that franchisees cannot use the disruption of supplies as a justification for non-compliance with the franchise agreement. It reinforces the franchisee's commitment to uphold their responsibilities, regardless of any actions taken by Desi District in response to a breach or default.