factual

Under what circumstances can Dog Haus terminate the franchise agreement without allowing the franchisee an opportunity to cure the default?

Dog_Haus Franchise · 2025 FDD

Answer from 2025 FDD Document

is instituted by or against Franchisee or its Principal Owner; (vii) if a final judgment in excess of $100,000 against the Franchised Restaurant remains unsatisfied or of record for thirty (30) days or longer (unless a supersedeas bond is filed); (viii) if Franchisee or its Principal Owner admits Franchisee

or its Principal Owner is unable to generally pay Franchisee's or its Principal Owner's debts as they become due; (ix) if execution is levied against the Franchised Restaurant or property; (x) if suit to foreclose any lien or mortgage against the Franchised Restaurant, the Franchised Location or the equipment of the Franchised Restaurant is instituted against Franchisee or its Principal Owner and not dismissed within thirty (30) days; or (xi) if the Franchised Restaurant or the Franchised Location shall be sold after levy thereupon by any sheriff, marshal, or constable.

  • 16.2 Option to Terminate Without Opportunity to Cure. Franchisee shall be deemed to be in Default and Franchisor may, at its option, terminate this Agreement and all rights granted under this Agreement, without affording Franchisee any opportunity to cure the Default, effective immediately upon receipt of notice by Franchisor upon the occurrence of any of the following events:
    • 16.2.1 If Franchisee shall Abandon the Franchised Restaurant.
  • 16.2.2 If Franchisee shall purport to make any Assignment without the prior written consent of Franchisor.
  • 16.2.3 If Franchisee shall Default in any obligation as to which Franchisee has previously received three (3) or more written notices of Default from Franchisor setting forth the Default complained of within the preceding twelve (12) months.
  • 16.2.4 If Franchisee makes any material misrepresentations in connection with the execution of this Agreement or the operations of the Franchised Restaurant.
  • 16.2.5 If Franchisee fails, for a period of ten (10) days after having received notification of noncompliance from Franchisor or any Governmental Authority, to comply with any Federal, state or local law or regulation applicable to the operation of the Franchised Restaurant.
  • 16.2.6 If Franchisee's operation of the Franchised Restaurant constitutes an imminent danger to the public health.
  • 16.2.7 If an audit or investigation conducted by Franchisor discloses that Franchisee has knowingly maintained false books or records, or submitted false reports to Franchisor, or knowingly understated its Gross Sales or withheld the reporting of the same as provided in this Agreement.
  • 16.2.8 If Franchisee or any of its Owners, are convicted of or plead guilty or nolo contendere to a felony or any other crime or offense that is reasonably likely, in the sole opinion of Franchisor, to adversely affect Franchisor's reputation, the Dog Haus System, the Dog Haus Marks or the goodwill associated with the same; however, if the crime or offense is committed by an Owner other than the Principal Owner, Franchisor may only terminate this Agreement under this Section 16.2.8 if the convicted Owner fails to sell its interest in Franchisee to Franchisee's other Owners within thirty (30) days after the conviction or guilty plea.
  • 16.2.9 If Franchisee materially misuses or makes any unauthorized use of the Dog Haus Marks or otherwise materially impairs the goodwill associated therewith or Franchisor's rights therein, or takes any action which reflects materially and unfavorably upon the operation and reputation of the Franchised Restaurant or the Dog Haus chain generally.

  • 16.2.10 If Franchisee makes any unauthorized use, disclosure, or duplication of the Dog Haus Trade Secrets or Dog Haus Confidential Information.
  • 16.2.11 If Franchisee fails to purchase and maintain in inventory the types and quantities of Dog Haus Branded Products, Dog Haus Proprietary Products, Sub-Branded Products or Non-Proprietary Products and Services necessary to meet reasonably anticipated consumer demand.
  • 16.2.12 If Franchisee shall or purports to purchase Dog Haus Branded Products or Dog Haus Proprietary Products or Sub-Branded Products or Non-Proprietary Products and Services from other than a Dog Haus Approved Supplier and fails to cease use of the non-complying product within three (3) days after having received notification from Franchisor to do so.
  • 16.2.13 If Franchisee shall Default in any obligation under this Agreement that by its nature is not capable of being cured by Franchisee.
  • 16.2.14 If Franchisee fails to meet the site selection requirements, enter a Lease or Open the Franchised Restaurant within the applicable time periods provided for in this Agreement.
  • 16.2.15 If an approved Assignment as required by Section 14.5, is not effected within the time provided following the death or permanent incapacity (mental or physical) of Franchisee.
  • 16.2.16 If Franchisee fails to comply with the covenants in Article 15 or fails to deliver to Franchisor the executed covenants required under Section 11.5 or Section 15.8.
  • 16.2.17 If Franchisee or the Principal Owner fails to successfully complete the Initial Training Program required by Section 6.1.
    • 16.2.18 If Franchisee fails to obtain or maintain the insurance coverage required by Sections 13.1 and 13.2.
  • 16.2.19 If, within ten (10) days after receipt of written notice from Franchisor that any required payment is overdue, Franchisee fails to make the payment to Franchisor, Franchisor's Affiliates, or, to Franchisee's landlord, suppliers, creditors or employees unless, with respect to Franchisee's suppliers, creditors or employees, Franchisee notifies Franchisor of the existence of a bona fide dispute and takes immediate action to resolve it.

Source: Item 22 — CONTRACTS (FDD page 87)

What This Means (2025 FDD)

According to Dog Haus's 2025 Franchise Disclosure Document, there are several circumstances under which Dog Haus can terminate the franchise agreement immediately, without offering the franchisee an opportunity to correct the issue. These include abandoning the restaurant, making an assignment without Dog Haus's prior written consent, or defaulting on any obligation after having received three or more written notices of default within the preceding 12 months.

Additionally, Dog Haus can terminate the agreement without a chance to cure if the franchisee makes any material misrepresentations related to the execution of the agreement or the operations of the restaurant. Failure to comply with any federal, state, or local law or regulation applicable to the restaurant's operation for a period of 10 days after receiving notification of noncompliance from Dog Haus or any Governmental Authority also constitutes grounds for immediate termination.

Further reasons for immediate termination include operating the restaurant in a way that poses an imminent danger to public health, defaulting in the repayment or performance of any obligation or financing transaction with third parties where the franchise, location, or any asset of the restaurant is pledged as security, or using abusive language when communicating with Dog Haus, its staff, or customers, or denigrating the Dog Haus system on the Internet or otherwise. Other causes include failing to sell and offer for sale all and only authorized services and merchandise required by Dog Haus after receiving a Notice of Default, failing to discontinue selling any disapproved services or merchandise within ten days of written notice, failing to respond to communications with Dog Haus in a timely manner, or if funding promised to the franchisee is not made available within ten business days after signing the agreement.

Finally, Dog Haus can terminate the agreement without opportunity to cure if, in their business judgment, they believe the franchisee or any of its owners, officers, directors, or key employees has engaged or attempted to engage in any fraudulent, dishonest, unethical, immoral, or similar conduct in connection with the restaurant's operation. Also, if the franchisee or its Principal Owner becomes insolvent or make a general assignment for the benefit of creditors; if a petition in bankruptcy is filed by or against Franchisee or its Principal Owner; if Franchisee or its Principal Owner is adjudicated as bankrupt or insolvent; if a bill in equity or other proceeding for the appointment of a receiver of Franchisee or its Principal Owner or other custodian for the Franchised Restaurant is filed and consented to by Franchisee or its Principal Owner; if a receiver or other custodian (permanent or temporary) of Franchisee's assets or property, or any part thereof, is appointed by any court of competent jurisdiction; if proceedings for a composition with creditors under any Applicable Law is instituted by or against Franchisee or its Principal Owner; if a final judgment in excess of $100,000 against the Franchised Restaurant remains unsatisfied or of record for thirty (30) days or longer (unless a supersedeas bond is filed); or if Franchisee or its Principal Owner is unable to generally pay Franchisee's or its Principal Owner's debts as they become due; if execution is levied against the Franchised Restaurant or property; if suit to foreclose any lien or mortgage against the Franchised Restaurant, the Franchised Location or the equipment of the Franchised Restaurant is instituted against Franchisee or its Principal Owner and not dismissed within thirty (30) days; or if the Franchised Restaurant or the Franchised Location shall be sold after levy thereupon by any sheriff, marshal, or constable.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.