factual

Under what conditions can the provisions or rights of Dog Haus's Guarantee be waived?

Dog_Haus Franchise · 2025 FDD

Answer from 2025 FDD Document

assets or property, or any part thereof, is appointed by any court of competent jurisdiction; (vi) if proceedings for a composition with creditors under any Applicable Law is instituted by or against Area Developer or its Principal Owner; (vii) if a final judgment in excess of $100,000 against any Dog Haus Restaurants remains unsatisfied or of record for thirty (30) days or longer (unless a supersedeas bond is filed); (viii) if Area Developer or its Principal Owner admits Area Developer or its Principal Owner is unable to generally pay Area Developer's or its Principal Owner's debts as they become due; (ix) if execution is levied against any Dog Haus Restaurant or property; (x) if suit to foreclose any lien or mortgage against any Dog Haus Restaurant or the equipment of any Dog Haus Restaurant is instituted against Area Developer or its Principal Owner and not dismissed within thirty (30) days; or (xi) if any Dog Haus Restaurant shall be sold after levy thereupon by any sheriff, marshal, or constable.

  • 11.2 Termination With Notice and Without Opportunity to Cure. Area Developer shall be in Default under this Agreement, and Franchisor may, at its option, terminate this Agreement and all rights granted under this Agreement, without affording Area Developer any opportunity to cure the Default, effective immediately upon receipt of notice by Area Developer (i) if Area Developer or an Owner is convicted of a felony, a crime involving moral turpitude, or any other crime or offense that Franchisor believes is reasonably likely to have an adverse effect on the Dog Haus System, the Dog Haus Marks, the goodwill associated therewith, or Franchisor's interest therein; (ii) if Area Developer fails to comply with the Development Schedule; (iii) if any of the Franchise Agreements or any other agreement between Area Developer and Franchisor or its Affiliates are terminated due to a Default by Area Developer; (iv) if any purported assignment or transfer of any direct or indirect interest in this Agreement, in the Dog Haus Restaurants, or in all or substantially all of Area Developer's assets is made to any third party by Area Developer or an Owner without Franchisor's prior written consent; (v) if any transfer of the equity ownership interests of Area Developer or an Owner is made to any third party without Franchisor's prior written consent; (vi) if Area Developer or an Owner discloses or divulges the contents of Franchisor's Manuals, Dog Haus Trade Secrets or other Dog Haus Confidential Information provided to Area Developer by Franchisor; (vii) if an approved Assignment, as required by Section 9.5, is not effected within the time provided following death or incapacity of an Owner; (viii) if Area Developer or an Owner fails to comply with the covenants in Article 13 or fails to obtain execution of and deliver the covenants required under Section 13.7; (ix) if Area Developer or an Owner has made any material misrepresentations in connection with their application to Franchisor for the development rights granted by this Agreement; (x) if Area Developer or an Owner, after curing a Default pursuant to Section 11.3, commits the same, similar, or different Default, whether or not cured after notice; (xi) if any Owner fails or refuses to deliver to Franchisor, within ten (10) days after Franchisor's written request, a Guarantee in substantially the form attached to this Agreement as Exhibit C and current financial statements as may from time to time be requested by Franchisor; (xii) if Area Developer, an Owner or an Affiliate fails to comply with any or all of the terms of this Agreement, or any other agreement between Franchisor, or its Affiliates, and Area Developer or an Owner beyond the applicable cure period; (xiii) upon a Default of Area Developer's obligations under this Agreement or any other agreement between Area Developer and Franchisor, which by its nature is not capable of being cured by Area Developer; (xiv) if funding promised or otherwise represented to be made available to Area Developer or its Owners on the condition that Area Developer sign this Agreement is not made available to Area Developer or its Owners within ten (10) business days after Area Developer signs this Agreement;

Source: Item 23 — RECEIPTS (FDD pages 87–328)

What This Means (2025 FDD)

According to Dog Haus's 2025 Franchise Disclosure Document, the franchisor can terminate the Area Developer Agreement, without opportunity to cure, if any Owner fails or refuses to deliver to Dog Haus, within ten (10) days after Dog Haus's written request, a Guarantee in substantially the form attached to the Agreement as Exhibit C and current financial statements as may from time to time be requested by Dog Haus. This guarantee typically ensures that the owner will uphold the financial and operational obligations of the franchise agreement.

This provision is significant for prospective Area Developers because it highlights the importance of providing the Guarantee and financial statements promptly upon request. Failure to do so can result in immediate termination of the agreement, which means losing the rights to develop Dog Haus restaurants in the designated area. The requirement for current financial statements allows Dog Haus to assess the financial stability of the owners, which is a common practice in franchising to ensure the franchisee's ability to meet their financial obligations.

It is important to note that the Guarantee must be in a form acceptable to Dog Haus, as specified in Exhibit C of the agreement. Additionally, if the Proposed Buyer is a corporation, limited liability company or other business Entity, each person who at the time of the Assignment, or later, owns or acquires, either legally or beneficially, twenty percent (20%) or more of the equity or voting interests of the Proposed Buyer must execute a Guarantee in a form acceptable to Dog Haus. This ensures that individuals with significant ownership in the buying entity are also personally committed to the franchise's success and compliance with the franchise agreement.

Prospective franchisees should carefully review Exhibit C of the Franchise Agreement to understand the exact terms and conditions of the Guarantee. They should also be prepared to provide current financial statements when requested by Dog Haus to avoid potential termination of the agreement. Understanding these obligations is crucial for maintaining a good standing with the franchisor and ensuring the long-term success of the Dog Haus franchise.

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.