Can a lender of the Dog Haus Franchisor rely on the statement provided by the Area Developer?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
In connection with any of the foregoing, at Franchisor's request, Area Developer shall deliver to Franchisor a statement in writing certifying (a) that this Agreement is unmodified and in full force and effect (or if there have been modifications that the Agreement as modified is in full force and effect and identifying the modifications); (b) that Area Developer is not in default under any provision of this Agreement, or if in default, describing the nature thereof in detail; and (c) as to such other matters as Franchisor may reasonably request; and Area Developer agrees that any such statements may be relied upon by Franchisor and any prospective purchaser, assignee or lender of Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 87–328)
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, a lender of the Franchisor can rely on written statements provided by the Area Developer under certain conditions. Specifically, Dog Haus may request that the Area Developer deliver a written statement certifying that the Area Development Agreement is in full force and effect, detailing any modifications or defaults, and addressing other matters reasonably requested by Dog Haus.
The Area Developer agrees that these statements may be relied upon by Dog Haus and any prospective purchaser, assignee, or lender of Dog Haus. This provision aims to provide assurance to potential stakeholders, such as lenders, regarding the Area Developer's compliance and the overall health of the agreement.
This clause is significant for prospective Dog Haus Area Developers as it highlights their responsibility to provide accurate and truthful information. It also protects potential lenders or purchasers of Dog Haus by allowing them to rely on the Area Developer's statements when making financial or business decisions related to Dog Haus. Area Developers should ensure they maintain accurate records and fully understand their obligations under the Area Development Agreement to avoid any misrepresentations in these statements.