Does a Dog Haus franchisee receive notice before termination if they become insolvent?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
iolation of any of the Anti-Terrorism Laws. Any violation of the Anti-Terrorism Laws by Franchisee or Franchisee's employees or any "blocking" of Franchisee's assets under the Anti-Terrorism Laws constitute grounds for immediate termination of this Agreement and any other agreements Franchisee has entered into with Franchisor or any of its Affiliates, in accordance with the provisions of Section 16.2.
- 15.11 Survival. The provisions of this Article 15 shall survive the expiration and termination of this Agreement and shall not limit, restrain or otherwise affect any right or cause of action which may accrue to Franchisor for any infringement of, violation of, or interference with, this Agreement, or the Dog Haus Marks, the Dog Haus System, the Dog Haus Confidential Information, the Dog Haus Trade Secrets, or any other proprietary aspects of Franchisor's business.
16. DEFAULT AND TERMINATION.
16.1 Termination In the Event of Franchisee's Bankruptcy or Insolvency. Franchisee shall be deemed to be in Default under this Agreement, and all rights granted to Franchisee of this Agreement shall automatically terminate without notice to Franchisee, (i) if Franchisee or its Principal Owner becomes insolvent or make a general assignment for the benefit of creditors; (ii) if a petition in bankruptcy is filed under any foreign, state or United States Bankruptcy Act by Franchisee or its Principal Owner or if a petition is filed against and not o
Source: Item 22 — CONTRACTS (FDD page 87)
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, if a franchisee becomes insolvent, their rights under the franchise agreement will automatically terminate without any prior notice. This also applies if the franchisee makes a general assignment for the benefit of creditors, or if a bankruptcy petition is filed by or against the franchisee and not opposed, or if the franchisee is adjudicated bankrupt or insolvent.
This lack of notice in the event of insolvency is a significant point for prospective Dog Haus franchisees to consider. Typically, franchise agreements allow the franchisee an opportunity to cure a breach of contract before termination. However, in the specific case of insolvency or bankruptcy, Dog Haus reserves the right to immediate termination without notice.
This provision underscores the importance of maintaining financial stability as a Dog Haus franchisee. The franchisee bears the full risk of immediate termination of the franchise agreement upon insolvency, which could result in a complete loss of their investment without an opportunity to rectify the situation. Therefore, careful financial planning and management are crucial for anyone considering investing in a Dog Haus franchise.