Under what circumstances related to bankruptcy or insolvency will the Dog Haus Area Developer Agreement automatically terminate?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
sumption, setting forth (a) the name and address of the proposed assignee, and (b) all of the terms and conditions of the proposed Assignment and assumption, shall be given to Franchisor within twenty (20) days after receipt of the proposed assignee's offer to accept Assignment of this Agreement, and, in any event, within ten (10) days prior to the date application is made to a court of competent jurisdiction for authority and approval to enter into the Assignment and assumption, and Franchisor shall thereupon have the prior right and option, to be exercised by notice given at any time prior to the effective date of the proposed Assignment and assumption, to accept an Assignment of this Agreement to Franchisor itself upon the same terms and conditions and for the same consideration, if any, as in the bona fide offer made by the proposed assignee, less any brokerage commissions which may be payable by Area Developer out of the consideration to be paid by the assignee for the Assignment of this Agreement.
11. DEFAULT AND TERMINATION
Termination On Area Developer's Bankruptcy or Insolvency. Area Developer shall be deemed to be in Default under this Agreement, and all rights granted to Area Developer of this Agreement shall automatically terminate without notice to Area Developer, (i) if Area Developer or its Principal Owner becomes insolvent or makes a general assignment for the benefit of creditors; (ii) if a petition in bankruptcy is filed under the United States Bankruptcy Act by Area Developer or its Principal Owner or such a petition is filed against and not opposed by Area Developer or its Principal Owner; (iii) if Area Developer or its Principal Owner is adjudicated as bankrupt or insolvent; (iv) if a bill in equity or other proceeding for the appointment of a receiver of Area Developer or its Principal Owner or other custodian for any Dog Haus Restaurant is filed and consented to by Area Developer or its Pri
Source: Item 23 — RECEIPTS (FDD pages 87–328)
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, the Area Developer Agreement will automatically terminate under specific bankruptcy or insolvency-related circumstances. This termination occurs without any prior notice to the Area Developer.
The agreement terminates if the Area Developer or its Principal Owner becomes insolvent or makes a general assignment for the benefit of creditors. It also terminates if a bankruptcy petition is filed by or against the Area Developer or its Principal Owner (unless the petition is opposed). Adjudication of bankruptcy or insolvency of either party also triggers automatic termination. The appointment of a receiver or custodian for any Dog Haus Restaurant, with the consent of the Area Developer or its Principal Owner, leads to the same result.
Further conditions include the institution of proceedings for composition with creditors, an unsatisfied final judgment exceeding $100,000 against any Dog Haus Restaurants for 30 days or longer (unless a supersedeas bond is filed), admission of inability to pay debts as they become due, execution levied against any Dog Haus Restaurant or property, institution of a suit to foreclose any lien or mortgage against any Dog Haus Restaurant not dismissed within 30 days, or the sale of any Dog Haus Restaurant after levy by a sheriff, marshal, or constable. These stipulations protect Dog Haus from financial instability of its Area Developers and ensure business continuity.