What is the consequence if a Dog Haus Area Developer commits the same Default after curing it once?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
Area Developer shall be in Default under this Agreement, and Franchisor may, at its option, terminate this Agreement and all rights granted under this Agreement, without affording Area Developer any opportunity to cure the Default, effective immediately upon receipt of notice by Area Developer (i) if Area Developer or an Owner is convicted of a felony, a crime involving moral turpitude, or any other crime or offense that Franchisor believes is reasonably likely to have an adverse effect on the Dog Haus System, the Dog Haus Marks, the goodwill associated therewith, or Franchisor's interest therein; (ii) if Area Developer fails to comply with the Development Schedule; (iii) if any of the Franchise Agreements or any other agreement between Area Developer and Franchisor or its Affiliates are terminated due to a Default by Area Developer; (iv) if any purported assignment or transfer of any direct or indirect interest in this Agreement, in the Dog Haus Restaurants, or in all or substantially all of Area Developer's assets is made to any third party by Area Developer or an Owner without Franchisor's prior written consent; (v) if any transfer of the equity ownership interests of Area Developer or an Owner is made to any third party without Franchisor's prior written consent; (vi) if Area Developer or an Owner discloses or divulges the contents of Franchisor's Manuals, Dog Haus Trade Secrets or other Dog Haus Confidential Information provided to Area Developer by Franchisor; (vii) if an approved Assignment, as required by Section 9.5, is not effected within the time provided following death or incapacity of an Owner; (viii) if Area Developer or an Owner fails to comply with the covenants in Article 13 or fails to obtain execution of and deliver the covenants required under Section 13.7; (ix) if Area Developer or an Owner has made any material misrepresentations in connection with their application to Franchisor for the development rights granted by this Agreement; (x) if Area Developer or an Owner, after curing a Default pursuant to Section 11.3, commits the same, similar, or different Default, whether or not cured after notice
Source: Item 23 — RECEIPTS (FDD pages 87–328)
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, if an Area Developer commits the same, similar, or different default after having already cured an initial default, Dog Haus can terminate the Area Development Agreement without providing any further opportunity to cure the default. This termination is effective immediately upon the Area Developer receiving notice from Dog Haus.
This provision means that as an Area Developer, even if you fix a problem that constitutes a default under the agreement, you risk immediate termination if the same or a similar issue arises again. This creates a heightened responsibility for Area Developers to ensure ongoing compliance with all terms of the agreement.
This type of 'no second chance' clause is not uncommon in franchising, as franchisors seek to protect their brand and system standards. However, it underscores the importance of understanding and adhering to the Area Development Agreement to avoid potential defaults and the severe consequence of immediate termination without a chance to rectify the situation. Prospective Area Developers should carefully review the agreement with legal counsel to fully understand their obligations and the potential ramifications of non-compliance.