Under what circumstances is a Dog Haus franchisee's failure to operate not considered 'Abandon'?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
ent of termination, for any cause, of this Agreement or any other agreement between the Parties, Franchisor may, at its option, terminate any or all of the agreements.
- 16.6 Notice Required By Law. Notwithstanding anything to the contrary contained in this Article 16, if any valid Applicable Law of a competent Governmental Authority having jurisdiction over this Agreement and the Parties shall limit Franchisor's rights of termination under this Agreement or shall require longer notice periods than those set forth above, this Agreement shall be deemed amended to conform to the minimum notice periods
or restrictions upon termination required by that Applicable Law. Franchisor shall not, however, be precluded from contesting the validity, enforceability or application of Applicable Laws in any action, hearing or dispute relating to this Agreement or the termination of this Agreement.
- 16.7 Interim Management. To protect the Dog Haus System, the Dog Haus Marks, the Dog Haus Trade Secrets and the goodwill associated with the same, after Franchisor has given Franchisee written notice that Franchisee is in Default, Franchisor may (but is not obligated to) assume interim management of the Franchised Restaurant during the pendency of any cure period or in lieu of immediately terminating this Agreement. If Franchisor elects to assume interim management of the Franchised Restaurant (i) Franchisor's election will not relieve Franchisee of Franchisee's obligations under this Agreement; (ii) Franchisor will not be liable for any debts, losses, costs or expenses incurred in the operation of the Franchised Restaurant during any interim management period; (iii) Franchisor will charge the Interim Management Fee, currently $500 per day, plus the actual out of pocket costs Franchisor incurs for the management services (the "Interim Management Fee"); a
Source: Item 22 — CONTRACTS (FDD page 87)
What This Means (2025 FDD)
Based on the 2025 Dog Haus Franchise Disclosure Document, there are several specific instances where a franchisee's failure to operate the franchised restaurant will not be considered an abandonment of the franchise. These instances primarily involve situations where Dog Haus itself has taken over management or where external factors prevent operation.
One such instance is covered under Section 16.7, which discusses 'Interim Management'. According to this section, after Dog Haus provides written notice to a franchisee that they are in default, Dog Haus has the option to assume interim management of the restaurant. This can occur either during the period allowed for the franchisee to correct the default or as an alternative to immediate termination of the agreement. If Dog Haus chooses to take over interim management, this action does not relieve the franchisee of their obligations under the agreement.
Another instance is covered under Section 16.8, which discusses 'Delay by Force Majeure'. According to this section, the franchisee must provide Dog Haus with notice of the specific nature and extent of the Force Majeure and an explanation as to how the event has delayed the franchisee's performance under the agreement, within ten (10) days after the occurrence of an event that the franchisee believes is an event of Force Majeure.