Under what conditions can Dog Haus terminate a franchise agreement before its expiration?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
or other custodian (permanent or temporary) of Area Developer's 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; (xv) if, in Franchisor's Business Judgment, Franchisor has grounds to believe that Area Developer or any of its Owners, officers, directors, or key employees has engaged or attempted to engage, through one or more affirmative acts or a failure to act, in any fraudulent, dishonest, unethical, immoral, or similar conduct in connection with Area Developer's development of Dog Haus Restaurants, whether such conduct is directed at or reasonably expected to impact Area Developer's development of Dog Haus Restaurants, the System, the Franchisor or its Affiliates, suppliers, other area developers, or another third party;
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 Development Agreement under several conditions, many of which do not allow for an opportunity to cure the default. Dog Haus may terminate the agreement with immediate effect if the Area Developer or an Owner is convicted of a felony or any crime that could adversely affect the Dog Haus system. Termination can also occur without opportunity to cure if the Area Developer fails to comply with the Development Schedule or if any franchise agreements between the Area Developer and Dog Haus are terminated due to a default by the Area Developer.
Other conditions that could lead to termination without an opportunity to cure include unauthorized assignment or transfer of interests in the agreement, the Dog Haus restaurants, or the Area Developer's assets. Similarly, unauthorized transfers of equity ownership, disclosure of confidential information, failure to effect an approved assignment following the death or incapacity of an owner, or failure to comply with specific covenants can result in immediate termination. Making material misrepresentations in the application for development rights, committing the same default after curing it once, or failure to provide a guarantee or financial statements when requested are also grounds for termination.
Further, Dog Haus can terminate the agreement if funding promised to the Area Developer is not made available within ten business days after signing the agreement. The franchisor can also terminate the agreement if, in their business judgment, they believe the Area Developer or its owners have engaged in fraudulent, dishonest, unethical, or immoral conduct related to the development of Dog Haus restaurants. Similarly, engaging in lewd or immoral conduct can also lead to termination. Additionally, the agreement can be terminated if the Area Developer defaults on obligations that cannot be cured.
Dog Haus can also terminate the agreement if the Additional Development Obligation proposed by the Area Developer is unacceptable, or if the parties cannot reach an agreement on an alternative Additional Development Obligation within thirty days after the Additional Development Notice. The franchise agreement can also be terminated if the lease is terminated with the written consent of Dog Haus.