Under what circumstances regarding bankruptcy or insolvency will a Dog Haus franchisee be deemed in default?
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 the 2025 Dog Haus Franchise Disclosure Document, a franchisee will be considered in default of their franchise agreement under specific bankruptcy or insolvency-related circumstances. This encompasses situations where the franchisee or their principal owner becomes insolvent or makes a general assignment for the benefit of creditors.
The default also applies if a bankruptcy petition is filed by or against the franchisee or their principal owner, unless the petition filed against them is opposed. Adjudication as bankrupt or insolvent also triggers default. Similarly, if a bill in equity or other proceeding leads to the appointment of a receiver or custodian for the franchised restaurant, and the franchisee or their principal owner consents, it constitutes a default. The appointment of a receiver or custodian for the franchisee's assets by a competent court also leads to default.
Furthermore, if proceedings for a composition with creditors are instituted by or against the franchisee or their principal owner, it results in default. Finally, a final judgment exceeding $100,000 against the franchised restaurant that remains unsatisfied for 30 days or longer, unless a supersedeas bond is filed, also constitutes a default under the Dog Haus franchise agreement. These stipulations protect Dog Haus from financial instability of its franchisees.