What happens to the Dq Treat Participation Agreement if the franchisee's agreement with Client is terminated or expires?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
- Termination of Franchise Agreement(s).
Termination or expiration of Operated Location's, Participating Franchisee's or Sub-Franchisee's franchisee agreement(s) with Client ("Franchise Agreement") results in immediate termination of this Participation Agreement with respect to the Designated Locations covered by the terminated or expired Franchise Agreement, with no notice required.
Source: Item 17 — The following paragraph is added to the end of Item 17 of the Disclosure Document: (FDD pages 70–378)
What This Means (2025 FDD)
According to Dq Treat's 2025 Franchise Disclosure Document, if a franchisee's agreement with Client is terminated or expires, the Participation Agreement is immediately terminated without any required notice. The 'Client' in this context refers to the party with whom the Operated Location, Participating Franchisee, or Sub-Franchisee has a franchise agreement.
This means that the franchisee's participation in any programs governed by the Participation Agreement, such as gift card programs or other services provided through GIFT, will cease immediately upon the termination or expiration of their primary franchise agreement with the Client. This could impact the franchisee's ability to offer certain services or participate in specific promotions that are tied to the Participation Agreement.
For a prospective Dq Treat franchisee, this highlights the importance of maintaining a good standing with the Client under the franchise agreement. Any issues leading to termination or expiration of the franchise agreement will also immediately terminate the Participation Agreement, potentially affecting the business's operations and customer offerings. Franchisees should carefully review the terms of both their franchise agreement with the Client and the Participation Agreement to understand their respective obligations and potential consequences of termination or expiration.